Ezel / Tax Rulings / TX
TX 9109L1129F11 Sales and/or Use Tax (State,Local,MTA) 1991-09-12

Was a student scholarship-matching service taxable, and when could its printed personal reports be bought for resale?

Short answer: The matching service was taxable information service. Personal reports sent to students could be printed for resale, but reports sent to third parties and other business materials remained taxable to the company.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 Comptroller classified scholarship matching for students as a taxable information service. The company had to pay tax on materials, supplies, equipment, and ordinary printing used to provide it.

The company could issue a resale certificate for printing a student's personal scholarship report when that report was sent to the student. If sent to a third party, the printing cost was taxable. Printing mailers, cards, brochures, and questionnaires was also taxable.

What this means for you

The destination and role of the printed item mattered: a report transferred to the student could be acquired for resale, while business and third-party materials were consumed by the provider.

Common questions

Was scholarship matching taxable? Yes, as an information service.

Could personal reports be printed tax-free for resale? Yes, when sent to the student.

Were promotional and intake materials taxable? Yes.

Citations and references

  • 34 Tex. Admin. Code Rule 3.342 — information services

Source

Original ruling text

September 12, 1991

Dear *****:

This is in response to your recent letter regarding the taxability
of printed materials in your business of providing scholarship
matching services to students.

Providing a scholarship matching service to students is taxable as
an information service. You are required to pay tax on all materials,
supplies and equipment used to provide the service. Printing
costs of materials used in your business are taxable at the time
of purchase. See Rule 3.342, Information Services.

If the student's personal scholarship reports are sent to the
students, your company may issue a resale certificate for the printing
of the reports. If they are sent to third parties, tax must be paid
on the printing costs. Tax is due on the printing costs of the mailers,
cards, brochures and questionnaires.

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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