Ezel / Tax Rulings / TX
TX 9008L1037C12 Sales and/or Use Tax (State,Local,MTA) 1990-08-17

Was a coupon booklet taxable when it included maps and local descriptions but primarily transferred consumers' rights to merchant discounts?

Short answer: No. The Comptroller treated the booklet sale as a nontaxable transfer of intangible discount rights because that was its primary purpose. The producer still owed tax on all printing costs incurred to make the booklets.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 coupon booklet was not subject to sales tax. Although it included maps and descriptions of local points of interest, its primary purpose was to transfer the consumer's right to the coupons' discounts.

The company therefore sold an intangible rather than taxable printed matter. It still had to pay tax on all printing costs used to produce the booklets.

Common questions

Did maps and local descriptions make the booklet taxable? No. The discount rights were the primary purpose.

Was the consumer's booklet purchase taxable? No.

Were the producer's printing costs taxable? Yes.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

August 17, 1990

Dear *:

Thank you for your letter concerning the taxability of your
company's "**" coupon booklet.

Although the booklet contains several pages of maps and de-
scriptions of points of interest in *** and the
surrounding area, the primary purpose of the booklet is to
transfer the rights to the discounts provided by the coupons.

Sales of the booklets will be considered sales of intangibles,
and will not be subject to sales tax.

Tax should be paid on all printing costs incurred in the pro-
duction of the booklets.

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

Please write or call if you have any questions. You can call
toll-free at 800-531-5441. Our regular number is 512-463-3830
and our FAX number is 512-475-0900.

Sincerely,
Larry Koenig
Taxability Section
Legal Services Division

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