Ezel / Tax Rulings / TX
TX 9104L1105A13 Sales and/or Use Tax (State,Local,MTA) 1991-04-17

Were automated employee-anniversary tracking and computer-generated award-recipient letters subject to Texas sales tax?

Short answer: Yes. The tracking was taxable data processing, and sales tax applied to the total charge for producing the computer-generated letters.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 provider's automated award program tracked employee anniversaries and mailed solicitations to award recipients.

The Comptroller said both services were taxable. Computerized storage or manipulation of data and information was taxable under Rule 3.330(a), and Rule 3.312(b) imposed tax on the total charge for producing computer-generated letters.

What this means for you

The program combined two separately taxable elements: data processing and production of computer-generated correspondence.

Common questions

Was automated anniversary tracking taxable? Yes, as data processing.

Were the computer-generated letters taxable? Yes, on the total production charge.

Citations and references

  • 34 Tex. Admin. Code Rule 3.330(a) — data-processing services
  • 34 Tex. Admin. Code Rule 3.312(b) — computer-generated letters

Source

Original ruling text

April 17, 1991

Dear **:

Thank you for your letter concerning the services provided to your
customers as part of your "A.S.A.P. Program (Automated System
Award Program)."

You stated that these services include a fully automated tracking system
of employee anniversaries and mail solicitations to recipients of awards.

Both services are taxable. Computerized data and information
storage or manipulation is taxable per section (a) of the enclosed
Rule 3.330-Data Processing Services. According to section (b) of
Rule 3.312 on graphic arts sales tax is due on the total charge
for producing computer-generated letters.

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 Administrative Division

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