Was weather information sold by computer link or in hard copy taxable as a Texas information service?

Plain-English summary

The provider bought some weather information from another source, developed some through its own personnel and expertise, combined the material, and sold it mainly to private pilots and offshore platforms by direct computer link or in hard copy.

The Comptroller classified the offering as an information service under Rule 3.342. But the data was derived through direct scientific observation of physical phenomena, placing it within the rule's nontaxable-information provision. The sales were therefore not taxable on the facts presented.

Common questions

Was this an information service? Yes.

Why was it not taxable? The information resulted from direct scientific observation of physical phenomena.

Did the delivery method change the result? No. The letter covered both direct computer links and hard-copy delivery.

Who primarily bought the information? Private pilots and offshore platforms.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8908L0951D11

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

August 22, 1989

Dear ****:

Thank you for your recent letter concerning the taxability of weather
information.

The service that your client is providing is clearly an information
service as defined by Rule 3.342. The question is whether this service is
nontaxable information per section (d)(2) of the rule.

Any sale of information primarily derived from laboratory, medical, or
exploratory testing or experimentation or any similar method of direct
scientific observation of physical phenomena is not subject to tax.

In your conversation with * on August 21, you explained that
your client obtains the weather information from various sources. The client
purchases some of the information from the **** and also formulates some of
the information utilizing its own personnel and expertise. This information is
then assimilated and sold, either by direct computer link or in hard copy form
primarily to private pilots and offshore platforms.

The weather information is derived via direct scientific observation of
physical phenomena. The sale of the information would therefore be nontaxable.

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

If you have any questions or need more information, please call our
toll-free
1-800-525-5555. The regular number is 512/463-4600. You may write me at
Tax Correspondence, Comptroller of Public Accounts.

Sincerely,
Julie Pesl
Tax Correspondence