Ezel / Tax Rulings / TX
TX 9009L1042F11 Sales and/or Use Tax (State,Local,MTA) 1990-09-06

Did a school vending-machine contract signed before July 1, 1990 protect student purchases from the increased Texas sales-tax rate?

Short answer: No. The vending operator sold to the students, not the school, so their purchases bore the increased rate and the operator collected it from them.

Apply this to your situation

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

A vending operator had a school contract in effect before July 1, 1990. The Comptroller nevertheless applied the increased state sales-tax rate to items students bought from the machines.

The operator was selling to individual machine users, not to the school. The letter described sales tax as paid by the consumer or customer and collected by the seller, so the rate increase did not penalize the operator.

What this means for you

The earlier institution-level contract did not fix the tax rate for later retail sales to individual consumers.

Common questions

Did the pre-July 1 contract preserve the old rate? No.

Who was the seller's customer? Each student using the vending machine.

Who bore the increased tax? The consumer, with the operator collecting it.

Citations and references

  • No numbered statute or rule was cited in the letter.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

BOB BULLOCK
Comptroller

September 6, 1990

Dear ** :

Thank you for your recent letter concerning your client's contract
with SCHOOL A to supply vending machines used by the students.

Although your client's contract with SCHOOL B was in effect prior
to July 1, 1990, items vended through the machines to students are
subject to the increased state sales tax rate. Your client is not
selling to SCHOOL A. He is selling to the individuals who use his
machines.

The sales tax is a tax that the consumer or customer pays, not the
seller. Your client will not be penalized as a result of the tax
rate increase because the tax is collected from the customer.

This opinion is based upon the facts you presented. If there are
additional 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

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