Ezel / Tax Rulings / TX
TX 9110L1137D08 Sales and/or Use Tax (State,Local,MTA) 1991-10-01

Could a Texas business imprinting blank caps, shirts, pens, or calendars for sale buy the packaging for those finished goods tax free?

Short answer: Yes. Texas treated buying blank merchandise and imprinting it for sale as manufacturing or processing, so packaging for the imprinted goods could be bought with 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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 Comptroller treated the purchase of blank merchandise and its imprinting for sale to another person as manufacturing or processing. As a result, the imprinter could buy wrapping and packaging materials for the finished imprinted merchandise tax free.

The business claimed the exemption by issuing exemption certificates to its suppliers instead of paying tax on those packaging purchases.

What this means for you

For the activity described, adding an imprint to blank merchandise for resale was enough to qualify the operator as a manufacturer or processor for the packaging exemption. The exemption covered materials used to wrap or package the imprinted products being sold.

Common questions

Did imprinting blank merchandise count as manufacturing or processing? Yes, under the Comptroller's interpretation in this letter.

What packaging qualified? Materials used to wrap or package the imprinted merchandise for sale.

How was the exemption documented? By issuing exemption certificates to suppliers.

Citations and references

  • The letter does not identify a numbered statute or administrative rule.

Source

Original ruling text

October 1, 1991

Dear *****:

Thank you for your recent letter regarding the Tax Code changes on
wrapping and packaging materials.

Under the Comptroller's interpretation of the changes to the Tax
Code, manufacturers and processors are allowed to retain their
exemption for wrapping and packaging materials used to wrap or
package the product being manufactured or processed. Purchasing blank
merchandise and imprinting the blank merchandise for sale to another
meets this criteria.

Any wrapping and packaging materials used to wrap or package this
imprinted merchandise for sale may be purchased tax free by the
person doing the imprinting by issuing exemption certificates to
suppliers in lieu of tax.

This opinion is based on the facts presented. I f 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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