Ezel / Tax Rulings / TX
TX 8712L0847E05 Sales and/or Use Tax (State,Local,MTA) 1987-12-02

Were cemetery foundation fees taxable when a tombstone seller merely collected and passed them through without preparing the ground?

Short answer: No, if separately stated in the contract or customer bill. The seller collected the cemeteries' fees as a customer service and remitted them to the cemetery, while separately collecting tax on the tombstone's selling price.

Apply this to your situation

This page answers the general question as of 1987. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1987
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is a taxpayer-specific December 1987 Texas Comptroller letter based on a tombstone seller that did not prepare the cemetery ground, merely collected the cemetery's foundation fee from the customer, remitted it to the cemetery, and separately stated it. It says the opinion may change if the facts differ. Pass-through-charge, cemetery-service, invoice, and tombstone-sale rules may have changed substantially; verify current law and the actual contract flow. STAR documents may no longer represent current policy even when not marked superseded. Identities are redacted. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The seller sold tombstones and collected sales tax on the stone's selling price. It did not prepare the ground for installation. Instead, it collected the foundation fees charged by cemeteries from its customers as a convenience and turned the money over to the cemetery.

Based on those facts, the Comptroller said the foundation fees were nontaxable if separately stated in the customer contract or bill.

What this means for you

The historical result depended on the seller acting only as a pass-through for the cemetery's fee and separately stating the charge. It does not decide a fee retained by the seller or ground preparation performed by the seller.

Common questions

Was the tombstone itself taxable? The requester said it collected sales tax on the stone's selling price; the Comptroller's holding addressed the separate foundation fee.

Did the seller install the foundation? No. It did not prepare the ground.

When was the cemetery fee nontaxable? When the seller merely collected and remitted it and separately stated it in the contract or billing.

Citations and references

  • No statute or administrative rule is cited in the letter text.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

December 2, 1987

Dear ***:

Thank you for your letter concerning foundation fees charged by
cemeteries
for placement of tombstones.

According to information supplied in your letter and our telephone
conversation on December 1, 1987, "a foundation is the preparation of the
ground for the Installation of a stone on the property." You stated that
your company sells stones and collects sales tax on the selling price of
the
stone. *** does not actually prepare the ground for
installation
of the stone. You simply collect the foundation fees charged by various
cemeteries from your customers as a service to your customer and turn the
fees over to the cemetery.

Based on the information you provided, foundation fees are not taxable,
if
separately stated in the contract or billing to the customer.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Policy Division.

Sincerely,
Julie Pesl
Tax Policy Division

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