Ezel / Tax Rulings / TX
TX 9110L1135G11 Sales and/or Use Tax (State,Local,MTA) 1991-10-15

Were fees for storing fire- and water-damaged property and the premium for bailee's insurance subject to Texas sales tax?

Short answer: No. The Comptroller said both the storage fees for fire- and water-damaged items and the bailee's-insurance premium were nontaxable, and allowed continued reliance on the June 1989 Sales Tax Review.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 taxpayer asked about charges for storing items damaged by fire or water and about the associated bailee's-insurance premium. The Comptroller said neither charge was taxable.

The letter also said the taxpayer could continue relying on the information in the June 1989 Sales Tax Review.

What this means for you

For the exact casualty-storage arrangement described, Texas treated both the storage service and the insurance premium as nontaxable. The short letter did not address ordinary storage of undamaged property or other casualty-related services.

Common questions

Were the storage fees taxable? No. Was the bailee's-insurance premium taxable? No. Did the letter cover every type of storage? No; it addressed fire- and water-damaged items.

Citations and references

  • June 1989 Sales Tax Review (the prior guidance the letter allowed the taxpayer to continue using)

Source

Original ruling text

October 15, 1991

Dear **:

Thank you for your letter of September 10, 1991, concerning the
taxability of fees to store fire and water damaged items and
bailee's insurance.

Fees charged for storing fire and water damaged items and the
premium for bailee's insurance are not taxable. You may continue
to rely on the information contained in the June 1989 Sales
Tax Review.

You may call toll free 1-800-252-5555 if you have any questions
or need more information. You may write to Tax Administration
Division, Comptroller of Public Accounts.

Sincerely,

Eddie C. Washington
Tax Administration Division

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