Ezel / Tax Rulings / TX
TX 8801L0865C05 Sales and/or Use Tax (State,Local,MTA) 1988-04-25

Which programming, laser printing, stationery, mail-shop, postage, and plastic-card services were taxable in Texas?

Short answer: Programming and tape-data manipulation, laser printing, stationery, and card embossing or encoding were taxable. Separately stated mail-shop work and postage bought with the client's check without markup were nontaxable.

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 an April 25, 1988 Texas Comptroller modification of a January 22 response. It says the wording for items 2 and 6 was modified but their taxability did not change, and says the opinion may change if the facts differ. The list skips item number 4 in the source. Data processing, programming, digital output, printing, mail-shop, postage, card-personalization, subcontractor, and resale 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 STAR documents may no longer represent current policy even when not marked superseded.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

The modified letter classified several services:

  • Computer programming, including extracting and manipulating data from magnetic tapes, was taxable processing under Rule 3.330.
  • Laser printing client-provided letters was taxable printing.
  • Ordering and providing printed letterhead and envelopes was taxable.
  • Separately stated mail-shop charges for bursting, trimming, folding, inserting, hand matching, applying postage, sorting for postage savings, sealing, and post-office delivery were nontaxable.
  • Buying postage with the client's check and no markup was nontaxable.
  • Charges to emboss, encode, and tip plastic cards through a subcontractor were taxable. The business could give the subcontractor a resale certificate instead of paying tax to it.

What this means for you

The historical result distinguished taxable data, printing, stationery, and card-imprinting work from separately stated fulfillment tasks and a no-markup postage pass-through.

Common questions

Was data extraction from magnetic tape taxable? Yes.

Were separately stated mail-shop tasks taxable? No.

Was postage taxable? Not when bought with the client's check without markup.

Was subcontracted card embossing and encoding taxable to the client? Yes.

Citations and references

  • 34 Tex. Admin. Code Rule 3.330 — historical data-processing-services rule.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

April 25, 1988

Dear ****:

I'm writing to modify my January 22, 1988 response to the services
provided
in 2 and 6. The taxability of the services remains unchanged.

  1. Computer programming including data extraction and manipulation from
    magnetic tapes is a taxable service under Rule 3.330 as a processing
    service.

  2. The laser printing of letters provided by your client is also taxable
    as a printing service.

  3. Ordering and providing printed letterhead and envelopes when requested
    is taxable to the client.

Mail shop work including:
a. Bursting
b. Trimming
c. Folding
d. Insertion in envelopes
e. hand matching
f. Applying postage
g. Sorting for postage savings
h. Sealing
i. Delivery to post office

These charges would not be taxable if separately stated.

  1. Purchasing postage with the client's check (no mark-up) is not a
    taxable service in your situation.

  2. Your charges to emboss, encode and tip plastic cards through a
    subcontractor are taxable to your client. Imprinting personal property
    is taxable. You can issue a resale certificate to the subcontractor in
    lieu of paying him the tax.

I am enclosing a copy of Rule 3.330 (Data Processing Services) for your
information.

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 for 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,
Eddie C. Washington
Tax Policy Division

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