Ezel / Tax Rulings / TX
TX 8906L0944E12 Sales and/or Use Tax (State,Local,MTA) 1989-06-20

Were engineering studies of motor-vehicle accidents taxable when they generally became attorneys' work product?

Short answer: Yes. Based on the facts provided, Texas treated the engineering studies as taxable insurance services under Rule 3.355(a)(5).

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This page answers the general question as of 1989. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1989
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

An engineering firm performed studies of motor-vehicle accidents that, for the most part, became attorneys' work product. Based on the information supplied, the Comptroller concluded that the firm appeared to provide taxable insurance services under Rule 3.355(a)(5).

The letter said the Comptroller had reached the same tax result for another engineering firm and for a toxicologist consulting for an attorney in litigation covered by an insurance policy. Those enclosed letters are not included in the STAR text preserved here.

Common questions

Did treatment as attorneys' work product make the engineering studies nontaxable? No.

How did Texas classify the service? As a taxable insurance service on the stated facts.

Did the ruling cover every forensic-engineering engagement? No. The opinion said additional or different facts could change the result.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

June 20, 1989

Dear *:

Thank you for your letter dated June 15, 1989 concerning the
taxability of the "engineering type studies on motor vehicle
accidents, which for the most part become attorneys' work
products".

Based on the information provided in your letter, it appears that
you are providing taxable insurance services. Please refer to
section (a)(5) of Rule 3.355 enclosed. I have also enclosed copies
of letters sent to another engineering firm and a toxicologist act-
ing as a consultant for an attorney in litigation covered by an in-
surance policy. These services were also ruled taxable as insurance
services.

Although I'm not sure what facts were presented by the gentleman
and his CPA that you referred to in your letter or what documents
*** reviewed, all of my research indicates that your
services are taxable.

This opinion is based on the facts presented. If there are addi-
tional or different facts, the opinion my change.

Please feel free to contact me if you have any additional questions.
You may write me, call toll-free 1-80-531-5441 from anywhere in the
United States or phone 512/463-4685

Sincerely,
Julie Pesl
Tax Correspondence

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