Ezel / Tax Rulings / TX
TX 8803L0889A01 Sales and/or Use Tax (State,Local,MTA) 1988-05-23

Did Texas sales tax apply to insurance services performed under stop-loss coverage for self-insured plans?

Short answer: No. The Tax Policy Committee decided not to apply sales tax to those services, made the policy retroactive to October 1, 1987, and said the rule would be amended.

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 official May 23, 1988 Texas Comptroller of Public Accounts policy letter published on STAR, despite its March-series accession number. Its retroactive October 1, 1987 effective date and promised rule amendment are historical; verify the adopted and current insurance-service rule before applying the conclusion today. The letter lacks modern PLR or GIL reliance language, and another taxpayer should not treat it as binding. Taxpayer-identifying details are redacted. STAR documents may no longer represent current policy. 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 Texas Tax Policy Committee decided not to apply sales tax to insurance services performed under stop-loss insurance coverage for self-insured plans.

The Committee made that decision retroactive to October 1, 1987 and said the rule would be amended as soon as feasible to reflect the policy.

What this means for you

This was a historical policy announcement rather than a detailed taxpayer-fact analysis. It addressed services tied to stop-loss coverage for self-insured plans and did not describe other combinations of self-insurance and carrier coverage.

Common questions

Were the stop-loss-related insurance services taxable? No.

When did the policy take effect? Retroactively to October 1, 1987.

Was the rule already amended in the letter? No. The letter said an amendment would follow.

Citations and references

The letter did not identify the rule by number.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

May 23, 1988

Dear *****:

The Tax Policy Committee has reached a decision on your question of
insurance
services as they relate to stop loss insurance and self-insured plans.

The Committee has determined that we will not apply sales tax to
insurance
services performed pursuant to stop loss insurance coverage provided for
self-insured plans. This decision will be retroactive to October 1,
1987.
The rule will be amended as soon as feasible to reflect this policy.

Please feel free to contact me if you have additional questions. You may
write me, call toll free 1-800-252-5555 from anywhere in Texas or phone
512/463-4633.

Sincerely,
(Mrs.) Wanda Hutcheson
Tax Policy Division

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