Ezel / Tax Rulings / TX
TX 9110L1136E05 Sales and/or Use Tax (State,Local,MTA) 1991-10-18

Was a charge for drug-screening urinalysis taxable, and what happened if the consultation also included licensed background or character investigations?

Short answer: Urinalysis by itself was not taxable. If the same consultation included background checks, character investigations, or similar work requiring a license under the Private Investigators and Private Security Agencies Act, the total charge was taxable.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 charge for drug-screening urinalysis was not taxable. The result changed if the consultation also included background checks, character investigations, or similar work that required a license under the Private Investigators and Private Security Agencies Act.

When those licensed security services were part of the consultation, the letter said the total charge was taxable under Rule 3.333(a).

What this means for you

The service mix controlled the result. A standalone lab screening received nontaxable treatment, while combining it with licensed investigative work brought the whole consultation charge into tax under this opinion.

Common questions

Was urinalysis taxable by itself? No. Were licensed background checks taxable? Yes. What if both were sold as one consultation? The total charge was taxable.

Citations and references

  • Private Investigators and Private Security Agencies Act (the licensing law identified by the letter)
  • Rule 3.333(a) (security services)

Source

Original ruling text

October 18, 1991

Dear **:

Thank you for your letter of September 17, 1991, concerning the
taxability of drug screening (urinalysis).

The charge for urinalysis is not taxable. However, if as part of
the consultation, you perform background checks, investigations
regarding character, etc., for which a license is required under
the Private Investigators and Private Security Agencies Act, the
total charge will be taxable. See section (a) of Rule 3.333
Security Services.

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

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

Get today's answer for your situation

You just read a 1991 ruling on this question. Ezel checks current Texas tax law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.