Ezel / Tax Rulings / TX
TX 8802L0868A05 Sales and/or Use Tax (State,Local,MTA) 1988-01-22

Did an out-of-state credit-reporting vendor have to collect Texas tax on reports mailed into Texas?

Short answer: Not if the vendor was not doing business in Texas. The Texas purchaser was responsible for any use tax due. The report was taxable when both the credit applicant and the requesting person's Texas connections met the letter's two stated tests.

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. It says the opinion may change if the facts differ and cites no statute or rule. Nexus, credit-reporting, use-tax, and sourcing rules may have changed materially; verify current law before applying its historical result. STAR documents may no longer represent current policy even when not marked superseded.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

An out-of-state credit-reporting vendor that was not doing business in Texas did not have to collect Texas tax on credit reports mailed into the state. The Texas purchaser was responsible for any use tax due.

The letter also gave a two-part test for whether the service was taxable: the credit applicant's address at the time of the request had to be in Texas, and the person requesting the report had to be located in Texas or doing business in Texas.

What this means for you

The historical letter separated the taxability of the report from the seller's duty to collect. Even when the service was taxable under the stated sourcing test, an out-of-state vendor not doing business in Texas did not collect; the purchaser handled any use tax.

Common questions

Did mailing a report into Texas automatically require the vendor to collect tax? No, not when the vendor was not doing business in Texas.

Who owed any tax in that situation? The purchaser was responsible for any use tax due.

When did the letter treat the credit report as taxable? When the applicant had a Texas address at the time of the request and the requester was located in or doing business in Texas.

Citations and references

The letter cites no numbered statute or rule.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
COMPTROLLER January 22, 1988

Dear ***:

Thank you for your letter concerning the responsibility of sales tax
collection by out-of-state credit reporting vendors. You asked this
question on behalf of CORP X.

An out-of-state credit reporting vendor that is not doing business in
Texas is not required to collect the Texas tax on credit reports mailed
into Texas. The purchaser would be responsible for any use tax due.

The service would be taxable if (1) the address of the credit applicant
at the time of the request for a report is in Texas; and (2) the person
who requested the credit report is located in Texas or is doing business
in Texas.

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 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,
(Mrs.) Jo Ann Dieck
Tax Policy Division

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