Which pipeline surveying, drafting, staking, permit, easement, and right-of-way charges were taxable when separately stated?

Plain-English summary

In-state drafting tied to survey work on out-of-state property was not taxable. Alignment sheets and piping drawings used to build the pipeline were also nontaxable, whether based on the provider's survey notes or another company's survey.

As-built surveys were taxable because they located an existing pipeline relative to an existing right-of-way. Boundary surveys and surveys locating structures relative to boundaries were taxable regardless of how often the property had been surveyed. Separately stated centerline staking or restaking was not taxable.

Permit drawings showing the installation method and fees for negotiating permission or acquiring a right-of-way could be unrelated nontaxable services if separately stated. Courthouse work used to establish boundaries and obtaining permission merely to conduct the survey remained related to the taxable survey.

Common questions

Were as-built surveys taxable? Yes.

Was separately stated centerline staking taxable? No.

Why did separate statement matter? Unseparated taxable and nontaxable charges made the total charge taxable.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8811L0912G11

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller November 9, 1988

Dear *:

Thank you for the additional information that you provided
concerning the charges related to pipeline surveying.

Drafting work done in-state that is related to survey work done on
property located out-of-state is not taxable.

Alignment sheets and piping drawings that are used by the
contractor in building the pipeline are not taxable whether done
from your own survey notes or a survey done by another company.
The charges for nontaxable services must be separately stated from
taxable charges to the customer or the total charge will be
taxed.

If, as you stated, the permit drawings are done to show the method
of installation, then the permit drawings could be considered
unrelated to the actual survey work. The charges for the permit
drawings must be separately stated to the customer. Please refer
to section (i) in Rule 3.356 for additional information about
unrelated services.

As I stated in my October 11, 1988 letter, as built surveys are
taxable. If you separately state the charge to stake or restake
the centerline, then this charge will not be taxable. As built
surveys are taxable because at this point you are determining the
location of an existing pipeline in relation to the existing
right-of-way. Any survey done to confirm the boundaries of real
property or to confirm the location of structures in relation to
the boundaries is taxable, regardless of the number of times the
property has been surveyed.

Of the three charges you listed on page 2 of your letter, only the
fee for negotiating with the land owner or agency for permission
to cross a highway, etc. or purchase the right-of-way appears
unrelated to the actual survey. In some cases, courthouse records
are used to help determine property boundaries. The "office work"
is as necessary to the survey as the "field work". Obtaining
permission from the land owner to survey is related to the
surveying service.

This opinion is based upon the facts you presented. If there are
additional or different facts, this opinion may change.

Please feel free to contact me if you have any additional
questions. You may write me, call toll-free 1-800-531-5441 from
anywhere in the United States or phone 512/463-4685.

Sincerely,
Julie Pesl
Tax Correspondence