Was a title-search report based on courthouse records taxable, and could separately stated government copy charges be excluded?

Plain-English summary

The provider searched courthouse records for deeds, liens, and other property information and delivered a Title Search Report for a flat or hourly fee.

The December 31, 1987 letter expressly superseded an October 20 letter that had said no tax was due. The controlling answer classified the report as a taxable information service.

Government-agency copy charges could be excluded from the tax base when separately stated to the client. The provider was responsible under the corrected position only from receipt of the superseding letter, subject to possible administrative timing arrangements.

What this means for you

The historical record shows an explicit agency reversal. The operative result comes from the later letter, not the earlier favorable response.

Common questions

Was the Title Search Report taxable? Yes.

Were separately stated government copy charges taxable? No.

Did the earlier nontaxable letter remain controlling? No; it was superseded.

Citations and references

The letters cite no numbered statute or rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8712L0854C08

Original ruling text

December 31, 1987

Dear Mr. **:

This letter is meant to supersede the letter written to you by Mr. Bob Bain of
our office dated October 20, 1987.

The charge for the "Title Search Report" is taxable as an information service.
If you separately state any charges, by governmental agencies for copies of
information you obtain from them, to your clients you may exclude that charge
from the tax base.

I apologize for any inconvenience this may cause you and your customers, but
assure you that you will only be held responsible effective the date you
receive this letter. If additional time is needed due to administrative
problems please contact me so that we may set an agreeable time.

If you have any questions or need more information, please call our toll-free
number 1-800-531-5441. The regular number is 512/463-4600. You may write me at
the Tax Policy Division.

Sincerely,

F. Wayne McDonald
Tax Policy Division

October 20, 1987

Dear Mr. **:

Your request for information about the taxability of a "title search" reached
my desk today.

Wayne McDonald of our Tax Policy Section tells me sales tax is not due on the
service your firm provides.

Let us know any time we can be of service to you.

Sincerely,

Bob Bain
Special Assistant

cc: Wayne McDonald, Tax Policy
Ray Gutierrez, Manager, ** Field Office
Ralph Krueger, Manager, ** Field Office

October 17, 1987

Bob Bullock
Comptroller of Public Accounts
Austin, Texas 78774-0100

Re: State Sales Tax; Information Services

Dear Sir,

On Tuesday, October 13, I was informed by your local office here in
** that we must now charge State Sales Tax for the service our
company provides. In the mail yesterday morning we received notice from the
Texas Land Title Association that you had reversed your decision, that we
should not charge State Sales Tax. I called the local office again yesterday
afternoon and they told me they have received no new information from
**, that as far as they were concerned, we must charge the tax. We
want a ruling from your office so that we can get this straightened out once
and for all.

The following is a brief outline of the services we provide. We physically
search public records in courthouses to obtain information on property; last
deed information, liens and etc., and put that information in the form of a
report and send it to our client. We call that a title Search Report. We charge
a flat rate per title search that we perform. On the more difficult searches,
we revert to an hourly rate and charge a flat rate per hour. On occasion we
attach one copy of a certain instrument to the finished report and pass the
charge for making the copy on to our client. That, in a nutshell, is our
business.

My question is, do we charge State Sales Tax? Due to the fact that some of our
clients are getting irritated because we can't give them an answer, it is very
important to us and the future of our business that we have a ruling from you
as soon as possible.

Your prompt attention to this matter will be greatly appreciated.

Sincerely,