Ezel / Tax Rulings / TX
TX 9110L1137C11 Sales and/or Use Tax (State,Local,MTA) 1991-10-02

Did rebuilding and sometimes enhancing used telecommunications equipment qualify the business as a remanufacturer entitled to exempt packaging supplies?

Short answer: Yes. Texas treated the business as a remanufacturer, so it could buy wrapping and packaging supplies for the rebuilt equipment tax free by giving suppliers an exemption certificate.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 business bought used telecommunications equipment, repaired and rebuilt it, and sometimes enhanced its original capabilities. Texas said those activities qualified the business as a remanufacturer for the wrapping-and-packaging exemption discussed after H.B. 11.

The business could purchase wrapping and packaging supplies for the remanufactured equipment tax free by giving its suppliers an exemption certificate.

What this means for you

The ruling treated rebuilding used equipment—and sometimes improving its capabilities—as remanufacturing rather than ordinary repair for this packaging-supply question. The exemption applied to supplies used to wrap or package that remanufactured product.

Common questions

Did the business qualify as a remanufacturer? Yes. Were packaging supplies exempt? Yes. How was exemption claimed? By issuing an exemption certificate to the supplier.

Citations and references

  • Texas H.B. 11 (the packaging-exemption change identified by the letter)

Source

Original ruling text

October 2, 1991

Dear *****:

Thank you for your recent letter regarding the changes to the sales
tax exemption for wrapping and packaging supplies caused by H.B. 11.

You stated that * purchases used telecommunications equipment.
* repairs and rebuilds the equipment, in some cases enhancing
the original capabilities.

You asked if ** would qualify as a remanufacturer and thereby
retain the manufacturer' s exemption for wrapping and packaging
supplies?

Response: Yes. ** may purchase wrapping and packaging supplies
to wrap or package the remanufactured equipment tax free by issuing
suppliers an exemption certificate in lieu of tax.

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- 252-5555, extension 3-4633. The regular number
is 512/463-4633.

Sincerely,

Wanda Hutcheson
Tax Administration Division

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