Did an insurance marketer need a Texas sales-tax permit merely to use computers to obtain prospective-customer leads?

Plain-English summary

The requester planned to use telemarketing computers to obtain leads for prospective insurance customers, not to sell taxable items.

Insurance coverage was not subject to sales tax. Using computers for that lead-generation activity was not taxable and did not require a Texas sales-tax permit.

The business still had to pay sales tax when purchasing, leasing, or renting the computers. It also owed tax on taxable telecommunications, data-processing, information, and other services or items bought for its own use.

Common questions

Did computer-assisted insurance lead generation require a permit? No.

Was the computer itself tax-free? No.

Could purchased telecommunications or data-processing service be taxable? Yes.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8909L0959G10

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN 78774

September 22, 1989

Dear **:

Thank you for your recent letter concerning your need for a Texas
sales tax permit in order to use telemarketing computers.

You state that you will be using the computer(s) to procure leads
for prospective insurance customers, not to sell taxable items.
The sale of insurance coverage is not subject to sales tax. The
use of computers in this matter is not taxable and you would not
be required to have a sales tax permit.

You are required to pay sales tax on the purchase, lease, or rental
of the computer and on any taxable services (telecommunications,
data processing services, information services, etc.), and taxable
items that you purchase for use.

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, you may call
toll-free 1-800-252-5555, ext. 3-4683. The regular number is 512/
463-4600. You may write me at Tax Correspondence, Comptroller of
Public Accounts.

Sincerely,
Eddie C. Washington
Tax Correspondence