Ezel / Tax Rulings / TX
TX 9010L1053F10 Sales and/or Use Tax (State,Local,MTA) 1990-10-26

Were parts and labor used to repair leased marine cargo containers in Texas subject to sales tax?

Short answer: No. Parts and labor were exempt because the containers were components of qualifying commercial vessels and were used exclusively in interstate and international commerce.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 lessor's marine cargo containers were used exclusively in interstate and international commerce, although repair work was sometimes performed at a Texas depot.

The Comptroller concluded that both the repair parts and labor were exempt. The containers qualified as component parts of vessels exceeding eight tons displacement and used exclusively in a commercial enterprise. The lessor should give the repairer an exemption certificate.

What this means for you

The Texas location of the repair did not make this taxpayer's parts and labor taxable because the containers met the ruling's vessel-component and exclusive commercial-use facts.

Common questions

Were the repair parts taxable? No.

Was the repair labor taxable? No.

What documentation did the lessor need to provide? An exemption certificate to the repairer.

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 October 26, 1990

Dear *:

Your letter to Tom Soto concerning repairs to marine cargo
containers has been transferred to me.

You stated that your client is the lessor of these containers
that are used exclusively in interstate and international com-
merce. At times, repair work is performed at a depot in Texas.

The repair parts and labor are exempt. The containers qualify
as component parts of a vessel in excess of eight tons dis-
placement used exclusively in a commercial enterprise. Your
client should issue an exemption certificate to the repairman.

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

Please write or call if you have any questions. You can call
toll-free at 1-800/531-5441. Our regular number is 512-463-3830
and our FAX number is 512-475-0900.

Sincerely,
Larry Koenig
Taxability Section
Legal Services Division

Get today's answer for your situation

You just read a 1990 ruling on this question. Ezel checks current Texas tax law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.