Ezel / Tax Rulings / TX
TX 9104L1114A09 Sales and/or Use Tax (State,Local,MTA) 1991-04-19

Did random or pre-employment drug testing require a private-investigator license, and how did STAR classify the tax result?

Short answer: The memo says drug testing alone required no license, while an investigation did. STAR's official subject classifies testing alone as nontaxable and testing combined with licensed services as 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 internal Texas Comptroller memorandum published in STAR's Letters collection, not a letter addressed to a taxpayer. No taxpayer received it directly, so it cannot support a detrimental reliance claim under 34 Tex. Admin. Code Rules 3.1 and 3.10. The body records a licensing inquiry; the tax conclusion appears in STAR's official subject metadata. STAR documents may no longer represent current policy even when not marked superseded. Redactions are preserved. 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

This short internal Comptroller memo records a call with an investigator at the Board of Private Investigators and Private Security Agencies. The investigator said a company did not need a license merely to perform drug testing, including random or pre-employment testing, but did need a license to conduct an investigation, which could include drug testing.

The memo body does not state a tax conclusion. STAR's official subject metadata classifies drug testing by itself as nontaxable and testing performed with services required to be licensed as taxable.

What this means for you

This document is useful as historical agency staff guidance, not as taxpayer-specific reliance protection. It also illustrates that licensing status drove STAR's tax classification.

Common questions

Did random or pre-employment drug testing require an investigator license? The memo says no.

What activity did require a license? Conducting an investigation, of which drug testing could be one part.

Where does the tax conclusion appear? In STAR's official subject metadata, not in the memo body.

Can a taxpayer rely on this as its own letter ruling? No. It was an internal memorandum, not a response issued to a taxpayer.

Citations and references

The memo did not cite a specific statute or rule.

Source

Original ruling text

April 19, 1991

I called **, an investigator with the Board of
Private Investigators & Private Security Agencies, and asked
about drug testing. ** said a company does not need
a license to do just drug testing. They do need a license
to do an investigation and drug testing may be a part of an
investigation. I asked if they needed a license to do
random drug testing or pre-employment drug testing and she
said no.

Adina Whittemore

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