Did Comptroller's Decision No. 22,974 concern cylinder charges imposed on industrial-gas customers?

Plain-English summary

A taxpayer asked whether a CCH summary of Comptroller's Decision No. 22,974 showed a policy change affecting the East Texas Oxygen case.

The Comptroller said there had been no policy change overturning East Texas Oxygen Co. v. The State of Texas.

Decision No. 22,974 concerned returnable cylinders the taxpayer acquired as a lessee and used to supply gas to customers. The disputed payments were what the taxpayer paid for those leased cylinders. They were not charges that the taxpayer imposed on its gas customers.

The letter therefore said the CCH summary was incorrect to describe the rental charge as a customer charge. It did not state a new general rule for the taxability of every cylinder charge.

What this means for you

The letter is a narrow clarification of what the earlier decision actually addressed. It warns against treating a secondary-source summary as if it changed the underlying Texas policy or facts.

Common questions

Did the Comptroller overturn East Texas Oxygen? No.

Whose cylinder payments were at issue in Decision No. 22,974? The taxpayer's payments for cylinders it acquired by lease.

Did the decision concern cylinder charges billed to gas customers? No.

Did this letter decide the tax treatment of all customer cylinder charges? No. It corrected the description of the earlier decision rather than announcing a broader holding.

Citations and references

• Comptroller's Decision No. 22,974 (leased returnable cylinders)
• East Texas Oxygen Co. v. The State of Texas

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9012L1061G01

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

BOB BULLOCK
Comptroller December 12, 1990

Dear **:

Thank you for your letter of September 28, 1990 asking for clarifica-
tion regarding the CCH summary of a Comptroller's Decision.

There has not been a policy change overturning the East Texas Oxygen
Co. v. The State of Texas case. Comptroller's Decision Number 22,974
concerned returnable containers acquired by the taxpayer as lessee.
The taxpayer was not paying tax on the cylinders which were being
filled and provided to the taxpayer's customers with gas. The taxpay-
er argued that the amounts he was paying for the cylinders was a de-
murrage charge and not consideration for a rental. The reference to
rental payments in Decision Number 22,974 is to the payments on those
cylinders acquired by lease and not to the charge imposed by the tax-
payer on his gas customers. The CCH summary is incorrect in stating
that the rental charge in question was imposed on the taxpayer's cus-
tomers.

If you have other questions or need more information please call or
write. The toll-free number is 1- 800 -531-5441; my extension is
3-4675. The regular number is (512)463-4675.

Sincerely,
Tom Soto
Taxability,
Legal Services Division