Were oil-and-gas publications forecasting market trends taxable information services when sold to multiple subscribers?

Plain-English summary

The Comptroller concluded that the client's market-forecast publications were taxable information services.

Forecasting market trends rather than merely compiling current data did not take the publications outside “news” or “information.” The publication also appeared to fit Rule 3.342(b)(2)'s example of a survey used in oil, gas, and related industries.

The exemption for information sold to one particular client did not apply because every publication was sold to more than one subscriber.

What this means for you

Calling a product a forecast or analysis did not make it nontaxable under the historical rule. Selling the same information to multiple subscribers also defeated the particular-client exception.

Common questions

Were market forecasts considered information? Yes.

Did the oil-and-gas survey example apply? The Comptroller said the publication appeared to come directly within it.

Why did the particular-client exemption fail? Each publication was sold to more than one subscriber.

Citations and references

• 34 Tex. Admin. Code Rule 3.342(b)(2) — example of a taxable survey used in oil, gas, and related industries.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8802L0892B01

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
Austin, Texas 78774

February 5, 1988

Dear **:

Thank you for your recent letter concerning the taxability of your
client's publications. As you requested, the edition of the "**"
which you furnished with your letter is being returned with this
response.

Based on our review of the materials you furnished, we have concluded
that
the sale of your client's publications is taxable. The fact that the
primary focus of your client's publication is not the compilation of
current data, but the forecasting of market trends, does not render its
contents to be something other than "news" or "information." Moreover.
the
publication would appear to come directly within the example of a taxable
information service contained in Rule 3.342 (b) (2) as a survey used in
the
oil and gas and related industries. The only exception to the sale of
information services which could be
applicable to your client's publications is the exemption for the sale of
information to a particular client. Since all of your client's publications are
sold to more than one subscriber, that exemption is not applicable in
this case.

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 from anywhere in U.S., or phone
(512)463-4600.

Sincerely,
Wayne McDonald
Tax Policy Division