Ezel / Tax Rulings / TX
TX 9001L0972G11 Sales and/or Use Tax (State,Local,MTA) 1990-01-11

Were services coordinating medical care and rehabilitation for injured workers subject to Texas sales tax?

Short answer: Generally no for physical therapy, occupational therapy, health care, and medical rehabilitation. Coordination became taxable only if it met the definition of taxable insurance service or data processing.

Apply this to your situation

This page answers the general question as of 1990. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1990
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

Physical therapy, occupational therapy, health care, medical services, and rehabilitation provided to injured workers were not taxable under the sales-tax law.

The coordination service could become taxable if its actual work met Rule 3.355(a)'s definition of insurance service or Rule 3.330(a)'s definition of data processing. The ruling did not provide enough detail to say that every coordination arrangement fell into either category.

Common questions

Were physical and occupational therapy taxable? No.

Could coordination services be taxable? Yes, if they qualified as insurance service or data processing.

Did the letter classify all rehabilitation coordination as taxable? No.

Citations and references

  • 34 Tex. Admin. Code Rule 3.355(a)
  • 34 Tex. Admin. Code Rule 3.330(a)

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

January 11, 1990

Dear ****:

Thank you for your letter of January 2, 1990, concerning the tax-
ability of services provided by rehabilitation specialists to
coordinate medical care and medical rehabilitation services to in-
jured workers.

Rehabilitation services, such as physical therapy and occupational
therapy, health care, and medical services provided to injured
workers, are not taxable under the sales tax law unless the coor-
dination services meet the definition of an insurance service as
defined under section (a) of Rule 3.355 or a data processing
service as defined under section (a) of Rule 3.330.

This opinion is based on the facts presented. If there are addi-
tional 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

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