Ezel / Tax Rulings / TX
TX 8806L0918D01 Sales and/or Use Tax (State,Local,MTA) 1988-06-01

Is a service that obtains Texas driving records for insurers taxable, and may the DPS record fee be excluded?

Short answer: Yes. Texas treated the service of obtaining Department of Public Safety driving records for insurance companies and prospective customers as taxable, including electronic delivery. The DPS charge itself was not taxable if separately stated. If the provider failed to collect tax, the customer had to accrue it.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 company obtained confidential driving records from the Texas Department of Public Safety for insurance companies and their prospective customers, sometimes by electronic transfer. Texas said the company's service was taxable.

The amount DPS charged for the records was not taxable if the provider separately stated it to the customer. Texas also said responsibility rested with both sides: the provider should collect the tax, and the customer should accrue it if the provider did not.

What this means for you

Driving-record and motor-vehicle-report providers

Under this letter, retrieving and supplying the records was taxable even when delivered electronically. Separately state the government agency's underlying record charge to preserve the exclusion described in the letter.

Insurers and other customers

Do not assume the transaction is tax-free because the source record comes from a state agency. If the service provider does not collect the tax, the letter says the customer should accrue it.

Common questions

Q: Is the driving-record service taxable?
A: Yes.

Q: Does electronic transfer make it nontaxable?
A: No. Electronic delivery was part of the described service.

Q: Is the DPS fee taxable?
A: No, if the provider separately states that amount to the customer.

Q: Who is responsible if tax is not collected?
A: The letter says both provider and customer are responsible; the customer should accrue tax if the provider does not collect it.

Citations and references

  • Tax Code, Chapter 151, identified in the trailing note as effective October 1, 1987

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

June 1, 1988

Gentlemen:

I understand you obtain driving records from the Department of Public
Safety (DPS) on behalf of insurance companies and their potential custo-
mers. DPS requires you and the insurance companies keep these records
strictly confidential. This service may be provided via electronic
transfer.

Your service is taxable. Tax is not due on the amount charged by the DPS
for the records, if this amount is separately stated to your customer.

Texas tax is the responsibility of the service provider and the customer.
If the service provider does not collect tax, the customer should accrue
the tax.

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

Question as to sales tax being charged by this company in compliance with
the Tax Code, Chapter 151, that was effective October 1, 1987.

Get today's answer for your situation

You just read a 1988 ruling on this question. Ezel checks current Texas tax law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.