Ezel / Tax Rulings / TX
TX 9104L1099B12 Sales and/or Use Tax (State,Local,MTA) 1991-04-15

Were charges for computer equipment repaired in Texas taxable when the repairer shipped the equipment back out of state?

Short answer: No when the repairer shipped the equipment out of Texas and kept records proving shipment. If it shipped to a Texas location, the total charge was taxable.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

The service company repaired computers sent by customers both inside and outside Texas.

The Comptroller said charges were not subject to Texas tax when the company repaired the equipment and shipped it out of state, provided it kept records documenting the out-of-state shipment. If the repaired equipment was shipped to a Texas point, the total charge was taxable.

What this means for you

The delivery destination and shipping records controlled the result, not merely the customer's address or where the repair work occurred.

Common questions

Was an out-of-state customer's repair automatically exempt? The letter required the repairer to ship the equipment out of state and document that shipment.

What if delivery was in Texas? The total charge was taxable.

Citations and references

The letter did not cite a specific statute or rule.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

April 15, 1991

Dear ***:

Thank you for your recent letter which is restated in part with response below.

Situation: * is a service company that repairs computers. Our customers
ship electronic parts to us from out of state. We also have customers within
the State of Texas. * repairs the equipment and ships it back to the
customer.

Question: Will you please advise whether or not ** should collect state
tax?

Response: If you repair the equipment and ship it out of state, your charges
are not subject to Texas tax. You must have records to document the
out-of-state shipment. If the equipment is shipped to a point in Texas, the
total charge is taxable.

This opinion is based on the facts you presented. Other facts, though similar,
may yield different results.

If you have questions or need more information, please call our toll-free
number
1-800-531-5441. My direct line number is 512463-4680 [FAX (512) 475-0900].
You may write to me in care of Tax Administration Division.

Sincerely,
Al Van Allen
Tax Administration Division

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