Ezel / Tax Rulings / TX
TX 9104L1098D04 Sales and/or Use Tax (State,Local,MTA) 1991-04-08

Were a corporation's lease payments taxable when it leased parking lots to provide free parking for employees or customers?

Short answer: Yes. Texas said lease payments for parking lots used to provide free employee or customer parking were taxable under Rule 3.315 on motor-vehicle parking and storage.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 corporation leased parking lots and used them to provide free parking for employees or customers. The Comptroller said the corporation's lease payments were subject to sales tax under Rule 3.315, Motor Vehicle Parking and Storage.

What this means for you

Providing the parking free to employees or customers did not make the corporation's own parking-lot lease payments tax-free under the facts in this letter.

Common questions

Were the parking-lot lease payments taxable? Yes.

Did free parking change the answer? No.

What rule did the letter apply? Rule 3.315 on motor-vehicle parking and storage.

Citations and references

  • 34 Tex. Admin. Code Rule 3.315 — motor-vehicle parking and storage

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

JOHN SHARP
Comptroller April 8, 1991

Dear ** :

This is in response to your recent letter regarding the taxability
of a leased parking lot.

Lease payments for parking lots which are leased by CORP A and
used to provide free parking for employees and/or customers are
subject to sales tax according to the provisions of Rule 3.315,
Motor Vehicle Parking and Storage.

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

If you have any questions or need additional information, you may
call me toll free at 1-800-531-5441, extension 5-0330. The
regular number is 512/463-4600, or write me at Tax Administration
Division.

Sincerely,
Bettie U. Peterson
Tax Administration Division

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