Ezel / Tax Rulings / TX
TX 9106L1113G01 Sales and/or Use Tax (State,Local,MTA) 1991-06-05

Were pill boxes used for free medicine samples and slides used in laboratory analysis exempt from Texas sales tax?

Short answer: No. Both were taxable when purchased: the container exemption required the contained product to be sold, and laboratory supplies were not within the health-care exemption.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

A business bought pill boxes to hold free medicine samples and slides for laboratory analysis. The Comptroller said both items were taxable at purchase.

Texas Tax Code § 151.322 exempted certain containers only when the product inside was sold. Because the medicine samples were given away, that container condition was not met.

The health-care exemption was in Tax Code § 151.313, but the letter said laboratory supplies were not included. The analysis slides therefore did not qualify.

What this means for you

Free distribution mattered for the pill boxes: the stated container exemption depended on a sale of the contents. Laboratory use by itself also did not place the slides within the health-care exemption described in the letter.

Common questions

Were pill boxes for free samples exempt containers? No.

Why not? The contained medicine was not sold.

Were laboratory slides exempt health-care supplies? No.

Citations and references

  • Texas Tax Code § 151.322 — exemption for certain containers
  • Texas Tax Code § 151.313 — health-care supplies exemption
  • 34 Tex. Admin. Code Rules 3.284 and 3.314 — enclosed by the Comptroller for the discussed issues

Source

Original ruling text

June 5, 1991

Dear **:

I have been asked to write to you regarding the taxability of pill boxes
purchased to hold give away samples of medicines and slides for use in
laboratory analysis. As we discussed, both of these items are taxable at the
time of purchase.

Tax Code Section 151.322 provides an exemption for certain containers. However,
in each case the exemption is conditioned on the product contained being sold.
The exemption for health care supplies is found in Tax Code Section 151.313.
Laboratory supplies are not included in the exemption. I am enclosing a copy of
the statute along with copies of rules 3.284 and 3.314 for your reference.

This opinion is based on the facts you presented. Other facts, though similar,
may yield different results.

If you have questions or need more information, please call or write. You may
reach by calling toll free, (800) 531-5441. My direct line number is
512-463-4680 [FAX (512) 475-0900]. You may write to me in care of Tax
Administration Division.

Sincerely,

Al Van Allen
Tax Administration Division

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