Were translation services taxable, and did the tax treatment of a hired typist depend on whether the typist used a word processor or a typewriter?

Plain-English summary

A private translator described oral court and deposition work, hand-printed translations, proofreading, and jobs in which the translator hired a typist and separately stated the typist's charge.

The Comptroller said all five described translation situations were not taxable. The translator could nevertheless owe tax on a subcontracted typist's service: using a word processor to produce the copy was taxable data processing, while using a typewriter was nontaxable typing.

What this means for you

The letter separated the translator's service from the production method used by a hired typist. The same finished text could produce different tax treatment for the typing charge depending on whether it was created by word processor or typewriter.

Common questions

Were the translator's five described services taxable? No.

Was word-processor typing taxable? Yes, as data processing.

Was typewriter typing taxable? No.

Citations and references

• 34 Tex. Admin. Code Rule 3.330 — data-processing services

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9109L1130G04

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

JOHN SHARP
Comptroller August 7, 1991

Dear ***:

Thank you for your letter regarding your private translation business
and the taxability of certain activities.

The translation services you describe in situations 1 through 4 are
not taxable. The translation service in situation 5 is also not taxa-
ble. However, when you hire the typist you may owe tax on the typist's
services. If the typist uses a word processor to make copy, then this
is considered data processing services and the charge for the typist's
services are taxable. If the typist uses a typewriter, the charge for
this typing service is not taxable.

Enclosed is a copy of Rule 3.330: Data Processing Services, for your
review.

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

If you have any questions, please don't hesitate to call toll free at
1-800-252-5555.

Sincerely,
Joan Hale
Tax Administration Division

The Honorable John Sharp
State Comptroller
Capitol Station
Austin, Texas 78774-0100

Attention: Tax Policy

Dear Sir:

In May of 1989, I established my private translation business and
registered with the County Clerk's office in Victoria County.

The translations I have done involve the following situations.

l. Oral court translations

2. Oral depositions at attorney's office

3. Written translations in which I provide the client with a legible hand
   printed translation, I get paid for my services and they either type it
   on their own or take it to the secretarial service of their own to have
   it typed.

4. Hand printed translations that I provide on yellow, legal pad paper to
   the client that they type, or that their typist types; I then proof it
   and correct it, they re-type or take to their typist for re-typing
   until the document is as "perfect" as possible.

5. Hand printed translations that I take to the typist, that I proof,
   correct and/or otherwise edit until the document is finished. Both the
   typist's and my services are billed on the same invoice (but as
   separate line items); I am paid for the whole service and, in turn, I
   pay the typist.

I do not type, neither do I use a word processor. Today, July 23, 1991, I
contacted your Victoria office and they told me the last ruling that
occurred in 1989 would not require that I collect a sales tax, but they
were unaware of a subsequent ruling. My opinion is that situations 1 and
2
do not involve a sales tax for my services, but situations 3, 4 and 5
might.

Would you render a judgement on each of these specific situations in
order
that I can continue to practice my services with propriety?

Thank you!