Ezel / Tax Rulings / TX
TX 9004L0997G11 Sales and/or Use Tax (State,Local,MTA) 1990-04-02

Were consultations and property-loss bids taxable when a Texas business helped homeowners settle insurance claims, even though it lacked an insurance license?

Short answer: Yes. Consultations were taxable insurance loss-prevention services, and bids were taxable insurance loss or damage appraisals. The business's lack of a State Board of Insurance license did not change the tax result.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 business provided homeowners with consultations and bids concerning property losses, which the homeowners could use when settling claims with their insurance companies.

The Comptroller treated the consultations as taxable insurance loss-prevention services and the bids as taxable insurance loss or damage appraisals under Rule 3.355. The provider's lack of a State Board of Insurance license did not prevent the charges from being taxable.

Common questions

Were the consultation charges taxable? Yes.

Were the damage bids taxable? Yes, as insurance loss or damage appraisals.

Did an insurance license determine taxability? No.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

April 2, 1990

Dear *:

We received your letter questioning the taxability of services
provided by your business. According to your letter, your
business provides services to homeowners such as consultations and
bids on property losses. The homeowner may use the bid as a guide
to settle their claim with the insurance company.

Your charges for consultations and bids are taxable as insurance
services. The consultation services are taxable as insurance loss
prevention services. See section (a)(6) of the enclosed Rule
3.355 relating to insurance services. The charge for bids is
taxable under Rule 3.355 section (a)(1) concerning insurance loss
or damage appraisals. Not having a license from the State Board
of Insurance does not prohibit your charges from being 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
Correspondence. 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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