Ezel / Tax Rulings / TX
TX 9105L1109D13 Sales and/or Use Tax (State,Local,MTA) 1991-05-23

Were trolley fares subject to Texas sales tax when the trolley provided public transportation or an amusement ride?

Short answer: Public-street transportation fares were not taxable, but operating on private property as an amusement ride or providing tour guides was a taxable amusement service.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

A trolley company asked whether its passenger charges were subject to Texas sales tax.

The Comptroller said a trolley operating only as public transportation on public streets did not have to charge sales tax to its passengers.

The result changed when the trolley operated on private property as an amusement ride or provided tour guides. Those activities were taxable amusement services under Rule 3.298.

What this means for you

The trolley's function and operating setting controlled. Ordinary public-street transportation was nontaxable, while an amusement ride or guided tour was taxable.

Common questions

Were ordinary public transportation fares taxable? No.

What if the trolley operated on private property as a ride? That was a taxable amusement service.

What if the trolley provided tour guides? That was also taxable.

Did the letter set a test for mixed operations? No. It addressed the stated public-transportation and amusement examples.

Citations and references

  • 34 Tex. Admin. Code Rule 3.298 — amusement services

Source

Original ruling text

May 23, 1991

Dear **:

Thank you for your recent letter concerning your trolley company.

A trolley company that operates only to provide public
transportation on the public streets is not required to charge
sales tax to the individuals being transported.

A trolley company is providing a taxable amusement service, if it
operates the trolleys on private property as an amusement ride or
it provides tour guides. Rule 3.298 on Amusement Services defines
taxable amusement services. I have enclosed that rule for your
information.

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

You may call me toll free at 1-800-252-5555, ext. 33690. The
regular number is 512/463-3690. You may also write to Tax
Administration at the above address.

Sincerely,

David Somerville
Tax Administration Division

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