Ezel / Tax Rulings / TX
TX 8801L0853A14 Sales and/or Use Tax (State,Local,MTA) 1988-01-07

Was a service that converted insurance applications into computer printouts of rates and premiums taxable in Texas?

Short answer: Yes. Texas treated the described rating service as a taxable insurance service and required the provider to obtain a Texas sales-tax permit.

Apply this to your situation

This page answers the general question as of 1988. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1988
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 January 1988 Texas Comptroller letter applying Rule 3.355. It says the opinion may change if the facts differ. The holding covers a service receiving completed rating applications from insurance agencies or companies and returning computer printouts of rates and premiums. Insurance-rating, premium-calculation, data-processing, permit, and insurance-service rules may have changed; verify current law. STAR documents may no longer represent current policy even when not marked superseded. Taxpayer-identifying details 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

Insurance agencies and companies submitted completed rating applications, and the provider returned computer printouts showing rates and premiums.

The Comptroller classified that work as a taxable insurance service under Rule 3.355 and said the provider had to obtain a Texas sales-tax permit.

What this means for you

The historical result followed the insurance-rating function, not merely the use of a computer to produce the output.

Common questions

Was the rating service taxable? Yes.

Did the provider need a sales-tax permit? Yes.

Citations and references

  • 34 Tex. Admin. Code Rule 3.355 — historical insurance-services rule.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller January 7, 1988

Dear ***:

Thank you for your letter concerning the taxability of the rating service
you are planning to provide.

In your letter, you stated that insurance companies will submit to you a
completed application for rating, and you will furnish to them a computer
printout of rates and premiums for the information provided on the
application. You will be in contact only with the agencies and
companies.

This is a taxable insurance service, and you must obtain a Texas sales
tax
permit. I am enclosing a copy of Rule 3.355.

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

Please feel free to contact me if you have additional questions. You may
write me, call toll free 1-800-531-5441 or phone 512/463-4600.

Sincerely,
Eddie Washington
Tax Policy Division

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