Which Texas hydrographic, vessel-positioning, marine-staking, and subseabed surveying services were taxable?

Plain-English summary

The Comptroller gave different answers for five marine-surveying services. Underwater topographic surveys were not taxable. Vessel positioning was a nontaxable information service because the information came from direct scientific observation of physical phenomena.

For marine construction, determining exterior boundaries of a right-of-way or block of water was taxable, but staking a centerline, construction staking, or marking where a structure should be placed was not. As-built subseabed surveys and surveys confirming boundaries in relation to existing structures were taxable. Post-construction surveys locating the position or burial depth of pipelines, cables, or other objects were also taxable.

Services performed outside Texas were not subject to Texas tax. The letter placed Texas's marine boundary at three marine leagues: nine nautical miles or 10.357 land miles from the coast.

Common questions

Were hydrographic surveys taxable? No.

Was construction staking taxable? No, but determining exterior boundaries was taxable.

Were as-built and post-construction location surveys 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/9004L0996E11

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

April 5, 1990

Dear *:

Thank you for the additional information that you sent March 7
concerning the surveying services that you provide for your
customers. Please accept my apology for the delay in responding
to your letter.

Based on the descriptions that you gave, the taxability of each
service is as follows:

1. Hydrographic survey - Underwater topographic surveying is not
   taxable.

2. Vessel Positioning - This qualifies as a nontaxable informa-
   tion service under section (d) (2) of Rule 3.342. Information
   that is derived from direct scientific observation of physical
   phenomena is not taxable.

3. Staking locations for proposed underwater pipelines, pilings,
   or other marine construction - Determining the exterior bounda-
   ries of a pipeline right-of-way, a block of water, etc. is tax-
   able. Staking the centerline, construction staking, or indicating
   where a structure should be built or placed is not taxable.

4. Geophysical (remote sensing) surveys of the sub-seabed to
   detect and map existing pipelines, wellheads, etc. or to determine
   the route for construction of marine structures - As-built surveys
   are taxable. Surveys to determine or confirm the boundaries of a
   block of water, pipeline right-of-way, etc. and surveys to deter-
   mine or confirm boundaries in relation to existing structures are
   taxable, as well.

5. Surveys to locate the position and/or depth of burial of physical
   objects such as pipelines, cables, etc. after they have been con-
   structed - Taxable, see explanation #4.

Surveying services performed outside Texas are not subject to
Texas tax. The territorial limits of Texas extend three marine
leagues (nine nautical miles or 10.357 land miles) from the coast.

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

Please feel free to contact me if you have any additional
questions. You may write me, call toll free 1-800-252-5555 (ext.
3-4685) from anywhere in the United States or phone 512/463-4685.

Sincerely,
Julie Pesl
Tax Correspondence