Ezel / Tax Rulings / TX
TX 9008L1037G11 Sales and/or Use Tax (State,Local,MTA) 1990-08-16

Was the full $275 flat fee taxable when a business bundled a nontaxable three-hour limousine service with a taxable dinner for two?

Short answer: Yes. Limousine service alone was nontaxable at the time and the dinner was taxable. Because the seller charged one all-inclusive price without separately stating the taxable and nontaxable components, the entire $275 package charge was taxable.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 entire $275 package was taxable. The seller combined three hours of limousine service with dinner for two and charged a single all-inclusive amount.

The letter treated limousine service alone as nontaxable at that time and the dinner as taxable. Because the seller did not separately state those components, the taxable dinner caused the full flat charge to be taxed.

Common questions

Was limousine service alone taxable under the letter? No.

Was the dinner taxable? Yes.

Why was the whole package taxed? The seller charged one flat amount without separately stating taxable and nontaxable charges.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

August 16, 1990

Dear ** :

Thank you for your recent letter requesting an opinion on the
taxability of a new business venture you recently began.

You stated that an all inclusive fee is charged to the custo-
mer for three (3) hour limousine service and dinner for two
(2) at a local restaurant. You pay a flat rate of $120 to the
limousine service for the three hours. You charge your custo-
mer a flat fee of $275; this includes the dinner package and
limousine service.

Limousine service alone is not a taxable service at this time.
The dinner package is taxable. Because you charge a flat rate
for the entire package (taxable/non-taxable charges are not
separately stated), the total charge is taxable.

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

If you have any questions or need additional information, you
may call me toll free at 1-800-252-5555, extension 5-0330. The
regular number is 512/463-4600, or write me at Tax Correspondence.

Sincerely,
Bettie U. Peterson
Tax Correspondence Division

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