Did a high-volume diskette duplicating machine used to copy computer programs qualify for Texas's 1991 manufacturing-equipment refund?

Plain-English summary

A business used a high-volume diskette duplicating machine and module to make copies of computer programs that it designed and sold. The Comptroller treated the computer programs as tangible personal property and said the machine was used to manufacture that property.

Because the business had bought the machine and paid tax on it in 1990, the letter said it qualified for the 25% manufacturing machinery and equipment tax refund available that year. The claim had to be postmarked or hand-delivered by December 31, 1991. The agency sent the taxpayer the refund form, supplement, instructions, and guidelines separately.

What this means for you

This historical letter recognized physical copies of computer programs as manufactured tangible personal property and treated the duplicating equipment accordingly. Its 25% refund and December 31, 1991 deadline were specific to the period addressed and should not be read as a statement of current refund law.

Common questions

Did the duplicating machine qualify for the refund? Yes.

Why? It was used to manufacture copies of computer programs that the business sold as tangible personal property.

How large was the refund described in the letter? Twenty-five percent of the manufacturing machinery and equipment tax.

What purchase did the letter address? A machine purchased with tax paid in 1990.

What was the filing deadline stated in the letter? December 31, 1991.

Citations and references

No statute or administrative rule was cited in the ruling text.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9102L1079E01

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

JOHN SHARP
Comptroller February 27, 1991

Dear *:

Thank you for your recent letter. As I understand it, you have
purchased a high volume diskette duplicating machine and module.
You use this machine to make duplicate copies of computer pro-
grams that you design and sell. Thank you especially for attach-
ing the flier to your letter; it was very helpful in describing
the machine's function.

Because you are using this machine to manufacture tangible per-
sonal property (computer programs) that you sell, and you pur-
chased and paid tax on the machine in 1990, it qualifies for the
25% manufacturing machinery and equipment tax refund this year.
Under separate cover I am transmitting blank copies of the appro-
priate refund claim form and supplement, with instructions and
guidelines. Your claim must be postmarked or hand-delivered on
or before December 31, 1991 to be accepted. You may wish to in-
clude a copy of this opinion with your claim form, to help speed
processing.

This opinion is based on the facts presented. Different facts,
though similar, might lead to different answers. If you have fur-
ther questions, feel free to write or call me at 1-800-531-5441,
ext. 3-3889.

Sincerely,
John Christian
Tax Administration