Was a scientific golf-swing measurement service taxable, and how were optional slow-motion videotapes treated?

Plain-English summary

The provider used a laser distance meter to average how far a golfer hit different clubs, recorded swing, stance, and accuracy information on a worksheet, and made a slow-motion video available for purchase.

The measurement service was nontaxable. The provider owed tax on taxable items used in the service, including videotapes. When a golfer bought a tape, the provider collected tax on its sales price and could claim credit under Rule 3.338 for tax paid to the supplier.

What this means for you

The analytical service and optional tangible product received separate treatment. Selling the tape created a taxable retail sale even though the underlying service was not taxable.

Common questions

Was the golf analysis taxable? No.

Was the optional videotape taxable? Yes.

Could supplier tax on a sold tape be credited? Yes, under Rule 3.338.

Citations and references

• 34 Tex. Admin. Code Rule 3.338 — credit for sales tax paid to suppliers

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9104L1097F09

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

JOHN SHARP
Comptroller April 4, 1991

Dear ** :

Thank you for your letter of March 29, 1991, concerning your Texas
sales and use tax responsibilities as a provider of a service to
golfers.

The service involves the use of a laser distance meter to scienti-
fically measure the exact distance a golfer hits with various
clubs. The golfer is allowed several swings to get an accurate
average. All distances and other pertinent information related to
the golfer's swing, stance, accuracy, etc., is recorded on a
worksheet. A video camera tapes the golfer in slow motion and the
golfer may purchase the videotape.

The service provided is not a taxable service. Sales tax must be
paid on all taxable items used in providing the service, including
videotapes. If a golfer purchases a videotape, the company must
collect sales tax on the sales price of the videotape; however,
the company may take credit for the sales tax paid on the video-
tape to the supplier. See Rule 3.338 - Credit for Sales Tax Paid
to Suppliers.

I am sending you a sales tax application packet under separate
cover.

This opinion is based on the facts presented. If there are addi-
tional or different facts, the opinion may change.

You may call toll free 1-800-252-5555 if you have any questions or
need more information. You may write to Tax Administration Divi-
sion, Comptroller of Public Accounts.

Sincerely,
Eddie C. Washington
Tax Administration Division