When were a service provider's consultation fees taxable, and was its sale of postage stamps taxable?

Plain-English summary

The Comptroller distinguished two consultation fees. A charge for discussing a customer's ongoing business needs and deciding where and how often the provider's services would be needed was not connected to a specific data-processing job and was not taxable.

A consultation to determine the exact content of a particular word-processing assignment—such as the information or statements to include in a résumé or report—was taxable.

The provider's sale of postage stamps to customers was not taxable, even though the provider generally bought stamps for its own use and did not add a profit to the customer sales.

What this means for you

Under this 1988 letter, the connection to a specific taxable job mattered. General planning advice was treated differently from consultation that defined the content of a particular word-processing assignment.

Common questions

Was general consultation about ongoing business needs taxable? No.

Was consultation defining a specific word-processing assignment taxable? Yes.

Were postage stamps sold to customers taxable? No.

Citations and references

The letter did not cite a rule or statute by number.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8805L0879C10

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller May 4, 1988

Dear **:

Thank you for your recent letter which is restated in part with response
below.

FACTS:

1. Consultation Fees: To what extent am I required to collect sales tax?

A. On most occasions at consultation fee is charged when a customer
schedules an appointment to discuss his/her ongoing needs for business
and to determine where, and how often my services will be required in
the conduct of their business.

Response: The charge is not connected to any specific data processing
job and is not taxable.

B. On some occasions a consultation fee is charged to determine the
exact content of assignments left for word processing, i.e. such as
required information/statements made in resumes, reports, etc.

Response: This consultation fee is taxable.

FACTS:

2. Stamps/Postage: Are postage stamps, sold to my customers as part of
   my available services, taxable?

A. I purchase postage stamps, primarily, for my own use. I do, however,
offer postage stamps for sale to my customers, as a part of my available
services. I do not charge extra for stamps to make a profit.

Response: The sale of postage stamps is not taxable.

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,
Al Van Allen
Tax Policy Division