Was a separately stated charge for placing a flood-plain designation on a taxable survey itself taxable?

Plain-English summary

The surveyor completed a land survey, checked a Federal Insurance Management Agency map to determine whether the property was in a flood plain, and stamped the survey with that determination. Mortgage and title companies would not accept the survey without the stamp.

The Comptroller said the flood-stamp charge was taxable when performed in connection with a survey taxable under Rule 3.356. It remained taxable when separately stated because the designation was a service connected with taxable surveying. An internal review note clarified that the stamp was treated as surveying, not insurance, because a certified surveyor's expertise was used to place it.

Common questions

Did separate billing make the flood-stamp charge nontaxable? No.

Why was the charge treated as taxable? It was part of the taxable surveying service and required the surveyor's expertise.

Was the stamp treated as an insurance service? No. The internal review directed that the response characterize it as surveying rather than insurance.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8901L0932F09

Original ruling text

January 31, 1989

Dear ***:

Thank you for your inquiry regarding the taxability of a "flood stamp" that you
place on your surveys.

You indicate that the mortgage and title company will not accept your survey
without a "flood stamp". Specifically, after your survey is completed, you
consult a Federal Insurance Management Agency Map in your office to determine
if the land is in a flood plain and stamp the survey accordingly.

Your charge for the stamp is taxable if it is performed in connection with a
survey that is taxable under the enclosed Comptroller's Rule 3.356 (Real
Property Services). Under these circumstances, your charge is taxable even if
it is separately stated because this is a service in connection with a taxable
real property service (i.e. surveying).

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

If you have any questions, please contact Tax Correspondence. You may call
toll free 1-800-252-5555, or our regular number is 512/463-4600. My extension
is 3-4662.

Sincerely,

Bob Jeffcoat
Tax Correspondence

DATE: January 31, 1989

TO: Bob Jeffcoat

FROM: Gilbert Zamora

SUBJECT: Surveyors

We have reviewed your response to CORP ABC, and recommend that the wording be
changed to reflect that the placing of the "flood stamp" designation is taxable
as a surveying service rather than as an insurance service. While the stamp is
necessary before insurance (or a mortgage) will be issued, apparently only a
certified surveyor can legally place that stamp on the survey and prior to
placing that designation a surveyor's expertise is required to determine
whether the property being insured is within a flood plain.