How did Texas tax trade-show booths and supplies, floor-space rental, electrician work, and repairs or parts for aircraft delivered outside Texas or owned by other states?

Plain-English summary

The business owed sales or use tax on tangible items bought or rented for use at shows and exhibits, including booths, photographs, display cases, audiovisual equipment, flowers, brochures, carpet, phones, decorations, and promotional giveaways. Only items bought strictly for sale, lease, or rental to others could be purchased for resale.

Renting real-property floor space was nontaxable. An electrician's charge depended on the work performed: labor on personal property and repair, remodeling, or restoration of nonresidential real property was taxable under the letter.

Items shipped by the seller to a location outside Texas were not subject to Texas sales tax. Separately stated aircraft repair parts and other sold-and-installed items could be exempt when the aircraft was delivered outside Texas, but parts used in a lump-sum repair were not exempt.

The fact that an aircraft belonged to another state government did not itself create an exemption; other states were not exempt from Texas sales and use tax.

Common questions

Was trade-show floor-space rent taxable? No.

Were the booth and display items taxable to the user? Yes.

Were lump-sum aircraft-repair parts exempt for out-of-state delivery? No.

Was another state government automatically exempt? No.

Citations and references

• Comptroller Rule 3.297(c)(6).
• Comptroller Rule 3.322.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9008L1041G11

Original ruling text

COMPTROLLER OF
PUBLIC ACCOUNTS
STATE
OF TEXAS
BOB BULLOCK AUSTIN, 78774
Comptroller August 10,
1990

Dear *****:

Thank you for your letter dated July 30, 1990, concerning items
that
you purchase for use at shows and exhibits and maintenance of
air-
craft belonging to other state governments.

** owes sales or use tax on tangible personal property
pur-
chased or rented for use at trade shows or exhibits. This
includes
booths, photographs, display cases, audiovisual equipment,
flowers,
brochures, carpet, phones, decorations, and give- away
promotional
items. Only those items that * buys strictly for sale,
lease
or rental to others may be purchased tax free for resale.

Rental of real property (floor space) is not subject to sales
tax.
An electrician's fee is taxable or not taxable depending on what
the electrician does. The labor to repair, remodel, restore, or maintain
personal property and the labor to repair, remodel, or restore
non-
residential real property is taxable. If you need a more specific
an-
swer, you will have to state exactly what the electrician was
hired
to do.

Items shipped by the seller to a location outside the state are
not
subject to Texas sales tax. There is an exemption from Texas
sales
tax on separately stated repair parts and the sale and
installation
of other items in aircraft if ** delivers the aircraft to
a
location outside Texas. There is no exemption from Texas tax on
parts
used to complete a lump-sum repair. Please refer to section (c)(6)
of
the enclosed Rule 3.297 on carriers.

Other states are not exempt from paying Texas sales and use taxes.
I
have enclosed Rule 3.322 on exempt organizations and other rules
for
your reference.

This opinion is based upon the facts you presented. If there are
ad-
ditional 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