Ezel / Tax Rulings / TX
TX 9101L1066E13 Sales and/or Use Tax (State,Local,MTA) 1991-01-04

Were separately stated insurance charges for goods shipped to customers taxable in Texas?

Short answer: Yes. Insurance charges on shipped goods were taxable even when separately stated because the Comptroller treated them as part of the sales price.

Apply this to your situation

This page answers the general question as of 1991. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1991
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 company separately stated transportation charges and insurance charges when billing customers for shipped goods. It already understood the transportation-charge treatment and asked whether the insurance charge was taxable.

The Comptroller said the insurance charge was taxable even when separately stated because it formed part of the sales price under Texas Tax Code § 151.007.

What this means for you

Separately listing shipping insurance did not remove it from the taxable price under this 1991 ruling. The Comptroller treated the insurance amount as part of what the customer paid for the sale.

Common questions

Were the insurance charges taxable? Yes.

Did separate invoicing make them nontaxable? No.

Why were they taxable? The Comptroller treated them as part of the sales price.

What authority did the letter cite? Texas Tax Code § 151.007.

Citations and references

  • Tex. Tax Code § 151.007 (sales price)

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

JOHN SHARP
Comptroller January 4, 1991

Dear **:

I am responding to your letter of December 12, 1990, wherein you
have inquired about the taxability of insurance charges on the
transportation of goods shipped by your company. In your letter
you state that transportation charges and insurance charges billed
to your customers on the shipment of goods are both separately
stated charges. You are aware of the taxation of transportation
charges but you need to know if the insurance charges are taxable.

The insurance charges are taxable even when separately stated.
These charges are considered part of the sales price as provided
for in the enclosed copy of Sec. 151.007 of the Texas Sales, Ex-
cise, and Use Tax statute.

The above response is based on the facts presented. Additional or
different facts may cause this response to change.

If you have any further questions, please contact Tax Correspon-
dence. You may write to the above address or call toll free
1-800-252-5555.

Sincerely,
Brad Gabbart
Tax Correspondence

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