Ezel / Tax Rulings / TX
TX 9007L1030C05 Sales and/or Use Tax (State,Local,MTA) 1990-07-03

How did a city's Development Corporation tax apply to taxable items bought inside the city or bought elsewhere and then used, stored, or consumed in the city?

Short answer: A taxable item purchased in the Development Corporation city was subject to its sales tax. An item purchased from a place of business outside the taxing city but used, stored, or consumed inside it was subject to complementary use tax. Both taxes were not due on the same transaction, and the act did not create an extra excise 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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 Development Corporation Act imposed sales tax on taxable items purchased in a city that had created a Development Corporation.

It also imposed complementary use tax when a taxable item was bought from a place of business outside the taxing city and then used, stored, or otherwise consumed inside that city.

Sales and use tax were complementary, so both were not due on the same transaction. The act did not impose an additional excise tax. Natural gas and electricity followed the administration rules of the Municipal Sales and Use Tax Act.

Common questions

Purchase inside the taxing city? Development Corporation sales tax applied.

Purchase outside but use inside? Complementary use tax applied.

Were both due on one transaction? No.

Was there a separate additional excise tax? No.

Citations and references

  • Development Corporation Act of 1979, Vernon's Ann. Civ. St. art. 5190.6, § 4A.
  • Tex. Tax Code ch. 321.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

July 3, 1990

Dear ****:

Earlier today we spoke about the sales and use tax imposed by the
Development Corporation Act of 1979, (Vernon's Ann. Civ. St., art.
5190.6, Sec.4A),

It is our position that the act referenced above provides for a
tax on each sale of a taxable item purchased in a city which has
created a Development Corporation. The act also provides for a use
tax to be imposed on a taxable item which was purchased from a
place of business not in a taxing city but which is used, stored or
otherwise consumed inside a city that has the Development Corpora-
tion tax. The sales and use taxes are considered to be complemen-
tary. Both taxes are not due on the same transaction. The act does
not provide for an additional excise tax to be imposed on a pur-
chase or use.

Natural Gas and Electricity are taxed and administered in the same
manner as provided for in the Municipal Sales and Use Tax Act (Chap-
ter 321, Tax Code).

If you have any questions please contact this office.

Sincerely,
Curt Swenson
Tax Correspondence

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