Was the annual fee for the described preferred vision-care plan subject to Texas sales tax?

Plain-English summary

A direct-sales company planned to market a preferred vision-care plan through independent Texas distributors and requested a tax ruling for the plan's annual fee.

The Comptroller said the annual fee was not taxable. The preserved ruling does not describe the plan's benefits or identify a statutory exemption, so the result should not be extended beyond the submitted plan and facts.

Common questions

Was the annual plan fee taxable? No.

Did the letter explain why? No. It states the result without further analysis.

Does the answer cover every vision discount or care plan? The letter does not say; it addressed the particular plan submitted.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8811L0913B10

Original ruling text

November 10, 1988

Dear ****:

Thank you for your letter requesting a ruling on the taxability of the
following service to be sold by your distributors in Texas:

The Amway Preferred Vision Care Plan

The annual fee charged for the plan 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 1-800-252-5555. My extension is 3-4666. You may write to me at Tax
Correspondence, Comptroller of Public Accounts.

Sincerely,

Jo Ann Dieck
Tax Correspondence

November 3, 1988

Comptroller of Public Accounts
Sales Tax Division
Austin, TX 78774

RE: REQUEST FOR SALES TAX RULING

Dear Sir or Madam:

*, a * corporation, is a manufacturer of personal and
homecare products and is a marketer of services. These products and services
are sold throughout the United States to independent distributors, who both
wholesale to other **** distributors and retail to consumers.

* has an agreement with your state to act as the collection agent on
all sales of * products and services sold by distributors in your
state.

To insure compliance with your state tax laws, we request a ruling on the tax
status of the following service:

The Amway Preferred Vision Care Plan

We believe that this service is specifically exempt from sales tax in your
state. To assist you in making your determination, I have enclosed a copy of
the sales literature for this plan.

Please direct your reply to the attention of the undersigned. If you have any
further questions regarding this matter, please contact me at your convenience.

Thank you for your cooperation.

Sincerely,