Ezel / Tax Rulings / TX
TX 8806L0902E05 Sales and/or Use Tax (State,Local,MTA) 1988-06-01

Is a charge for copying data from one storage device to another taxable in Texas when the customer supplies the disks or tapes?

Short answer: Yes. Texas treated the charge for transferring data from one storage device to another as a taxable data-processing service, even though the customer supplied the disks or tapes and the provider did not process, reformat, or manipulate the media.

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 Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
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

A business charged customers to transfer data from one storage device to another. The customers could supply the disks or tapes, and the provider did not process, reformat, or manipulate the media.

Texas nevertheless classified the charge as a taxable data-processing service. Customer ownership of the physical storage device did not change the answer stated in the letter.

What this means for you

Data-conversion and media-transfer businesses

A seemingly mechanical copy from one device to another can fall within taxable data processing. The fact that you do not alter or reformat the data did not make this service nontaxable in the letter.

Customers supplying their own media

Providing your own disks or tapes did not remove the service charge from tax under these facts.

Common questions

Q: Is a simple data copy taxable if nothing is reformatted?
A: Yes. The letter calls the transfer a taxable data-processing service despite no processing, reformatting, or manipulation.

Q: Does it matter who owns the disks or tapes?
A: No. The letter expressly says the customer may provide the storage device.

Q: Does the letter cite a specific statute or rule?
A: No. It gives the classification without identifying a provision by number.

Q: Can I rely on this 1988 letter today?
A: Treat it as historical guidance. The opinion was limited to the facts presented and may not reflect current policy.

Citations and references

The letter classifies the transfer as taxable data processing but does not cite a specific Tax Code section or Comptroller rule by number.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

June 1, 1988

Dear ***:

Thank you for your letter of May 16, 1988, concerning tax on the charge
for transferring media from one storage device to another.

The customer may provide the storage device, i.e., disks or tapes. You
do not process, reformat or manipulate the media. This is a taxable data
processing service.

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,
Adina Whittemore
Tax Policy Division

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