Ezel / Tax Rulings / TX
TX 8811L0908G10 Sales and/or Use Tax (State,Local,MTA) 1988-11-16

Was teleprompting taxable as data processing or equipment rental when the provider supervised the equipment?

Short answer: No. Texas found teleprompting was not data processing, and provider-supervised equipment meant the customer received a nontaxable service rather than a rental.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

After reviewing how the service worked, the Comptroller concluded that teleprompting was not taxable data processing.

Because the teleprompting equipment remained under the provider's supervision, Texas also did not treat the transaction as an equipment rental. The customer was buying a nontaxable service.

Common questions

Was teleprompting data processing? No under the described facts.

Was the equipment rented to the customer? No, because it remained under the provider's supervision.

What was the transaction? A nontaxable service.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

November 16, 1988

Dear **:

Thank you for sending a description of what is involved in
teleprompting.

We were a little concerned that teleprompting might be considered
a data processing service. (These services became taxable January
1, 1988.) However, based on your description, teleprompting is
not data processing service. And, as Mr. Anderson stated, since
the equipment is under your supervision, you are not renting the
equipment to your customer but providing a non-taxable service.

I appreciate your assistance.

This opinion is based on the facts presented. If there are addi-
tional 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
512/463-4614. You may write me at the Taxability Section, Legal
Services Division.

Sincerely,
Adina Whittemore
Taxability Section
Legal Services Division

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