Could a seller refund tax collected on geologic studies after Texas expanded its exemption for scientifically observed geologic information?

Plain-English summary

A seller offered geologic studies. Earlier Comptroller guidance had treated pre-contracted studies as nontaxable information and completed studies sold afterward as taxable tangible publications. A 1988 letter then treated all sales as taxable information services.

The 1991 letter explained that Texas changed policy in August 1988, expanding the exemption to all geologic information derived by direct scientific observation of physical phenomena. The seller could refund tax collected on qualifying geologic information services after October 1, 1987, subject to a four-year limitations period.

The letter also distinguished publication refunds arising from Texas Monthly v. Bullock. It allowed refunds for publications taxed as tangible personal property before October 1, 1987, but not for items treated as nontaxable information services during that period.

What this means for you

The document is a historical refund letter built around several changes in classification. Eligibility depended on when the sale occurred and whether the item had been treated as a publication or an information service.

Common questions

What geologic information did the expanded exemption cover? Information derived by direct scientific observation of physical phenomena.

Could tax collected after October 1, 1987 be refunded? The letter said yes for qualifying geologic information services.

What limitations period applied? Four years.

Did every pre-October 1987 item qualify for a publication refund? No; the letter excluded items then treated as nontaxable information services.

Citations and references

• 34 Tex. Admin. Code Rule 3.325 — refunds
• 34 Tex. Admin. Code Rule 3.342 — information services
• Texas Monthly v. Bullock — publication-refund decision referenced by the letter

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9104L1099D01

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

John Sharp
Comptroller of Public Accounts April 10, 1991

Dear ****:

I am sorry for the delay in responding to your March 13, 1991, letter
concerning sales of your "***" geologic studies.

I have reviewed all of the information that you presented to Al Van Allen
and myself in February 1987 and March and April 1988. Mr. Van Allen told you in
February 1987 that sales of the geologic studies that were contracted for in
advance were not taxable. Sales of studies purchased after completion of the
study were taxable. The nontaxable studies were considered sales of
information, which was a nontaxable service prior to October 1, 1987. The
other studies were taxed as sales of tangible personal property, similar to
other books, maps, charts, etc.

My April 1988 letter taxes all of your sales as information services.
Prior to August 1988, geologic information that was sold to multiple customers
was considered taxable information. In August 1988 the exemption for geologic
information was expanded to include all geologic information that was derived
by direct scientific observation of physical phenomena. Unfortunately, my
letter to you was written before this change in policy.

I have enclosed copies of guidelines for possible refunds resulting from
the Supreme Court decision in the Texas Monthly v. Bullock case. We will allow
a refund of tax on publications that were taxed as tangible personal property
prior to October 1, 1987. We will not allow a refund on publications that were
considered nontaxable information services prior to October 1, 1987.

Also, you may refund taxes collected from customers for geologic
information services taxed after October 1, 1987. There is a four year statute
of limitations, however. Please review Rule 3.325 on refunds. Rule 3.342 on
information services is also enclosed for your review.

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

Please feel free to contact me if you have any additional questions. You
may write me, call toll free 1-800-252-5555 from anywhere in the United States
or phone 512/463-4600.

Sincerely,
Julie Pesl
Tax Administration Division