Ezel / Tax Rulings / TX
TX 8906L0944F10 Sales and/or Use Tax (State,Local,MTA) 1989-06-30

Was leasing space on a satellite transponder subject to Texas sales or use tax?

Short answer: No, under the stated facts. The letter distinguished satellite space from equipment located in Texas and did not decide separate uplink, downlink, or cable services.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

The requester described the transaction as leasing the use of a transponder on a satellite. The Comptroller said this was not a lease of equipment located in Texas and answered that the satellite-space lease was not subject to Texas sales or use tax.

The letter noted that video uplink and downlink providers may provide telecommunications services and that a company broadcasting its own programs could provide cable television service. Those possible services were expressly outside the question decided.

Common questions

Was the satellite-space lease taxable? No, under the stated facts.

Did the letter exempt every related broadcast service? No. It did not decide separate telecommunications or cable services.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

June 30, 1989

Dear *****:

Thank you for your letter of June 20, 1989 concerning the
taxability of a situation that you described as the "lease of a
transponder" by Company X.

Clearly, the lease of "the use of transponder on a satellite" is
not a lease of equipment located in Texas. However companies
that provide video uplink and downlink services are providing
telecommunications services. If Company X owns the equipment located
necessary to broadcast its own video programs to subscribers or
paying customer, it could be providing cable television
services.

You indicated in our telephone conversation that you are not
concerned with any taxable services that may be provided by
Company X or for Company X by other companies. Your question was
whether the lease of space on a satellite is subject to Texas
sales or use Tax. The answer to your question is "no".

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

Please feel free to contact me if you have and 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

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