Ezel / Tax Rulings / TX
TX 9003L0995C01 Sales and/or Use Tax (State,Local,MTA) 1990-03-13

Was a membership fee taxable when it entitled cardholders to buy merchandise from participating retailers at a discount during specified periods?

Short answer: No. The Comptroller ruled that the discount-program membership fees described were not subject to sales tax.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

The seller offered memberships that let cardholders purchase merchandise at a discount during specified periods.

The Comptroller ruled that the membership fees were not taxable.

Common questions

Were the discount-program membership fees taxable? No.

What benefit did the membership provide? Access to discounted merchandise during specified time periods.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

March 13, 1990

Dear **:

We received your letter, questioning the taxability of mem-
berships that you sell which entitle members to purchase
merchandise during specific time periods at a discount. These
membership fees are not taxable.

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

If you have any questions you may call or write Tax Correspon-
dence. You may call toll free 1-800-252-5555, or our regular
number is 512/463-4600. My extension is 3-4658.

Sincerely,
Sherry Buckley
Tax Correspondence

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