Ezel / Tax Rulings / TX
TX 9105L1107G02 Sales and/or Use Tax (State,Local,MTA) 1991-05-13

Were geophysical services using seismic-data processing taxable Texas data-processing services?

Short answer: Not when professional geophysical interpretation was provided and data processing was only a tool. Pure data manipulation without analysis or professional evaluation was taxable data processing.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 Comptroller clarified an earlier letter about whether geophysical services were taxable data processing.

Geophysical services were not taxable when a professional interpreted the geophysical information and used data processing only as a tool in making that interpretation. If the provider merely processed or manipulated the data without analysis or other professional evaluation, the service was taxable data processing.

The Comptroller said this position applied retroactively to January 1, 1988.

What this means for you

The line drawn by this historical letter was the professional judgment supplied with the processed data. Data processing that supported an interpretation was treated differently from stand-alone processing with no analysis.

Common questions

Were all geophysical services nontaxable? No. The nontaxable treatment depended on geophysical interpretation or professional evaluation.

What was taxable? Data processing performed without analysis or other professional evaluation.

Did using computers make the interpretive service taxable? No. Data processing could be used as a tool in the nontaxable geophysical service.

When did the stated position take effect? Retroactively to January 1, 1988.

Citations and references

  • 34 Tex. Admin. Code Rule 3.330 — data-processing rule cited by the letter

Source

Original ruling text

May 13, 1991

Dear **:

This letter is written to provide additional information regarding
geophysical services as data processing services, with particular
reference to my letter to you dated April 26, 1991.

In my earlier letter to you, I stated that this agency has
determined that geophysical services do not fall within the
definition of data processing services as defined by Sales Tax
Rule 3.330 (34 TAC 3.330) and are, therefore, a non-taxable
service. I should have added that this determination is based on
services where geophysical interpretation is made and data
processing is used as a tool to help make the interpretation.
If only data processing is being done, with no analysis or other
professional evaluation of the data, then it would be taxable data
processing.

As I mentioned in my previous letter, this position is retroactive
to January 1, 1988.

I apologize for any inconvenience this may have caused.

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

Sincerely,

Bettie U. Peterson
Tax Administration Division

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