Ezel / Tax Rulings / TX
TX 9111L1146B04 Sales and/or Use Tax (State,Local,MTA) 1991-11-18

Was revenue from renting space on installed utility poles subject to Texas sales tax as tangible-personal-property rental?

Short answer: No. Utility poles installed as part of a utility line were improvements to real property, so renting space on them was not a rental of tangible personal property and the rental revenue was not 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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 requester earned revenue by renting space on utility poles. The Comptroller said poles installed as part of a utility line were improvements to real property.

The space rental therefore was not a rental of tangible personal property, and its revenue was not subject to sales tax.

What this means for you

The answer depended on the poles being installed as part of the utility line. The letter did not address a sale or rental of unattached poles.

Common questions

Were installed poles tangible personal property for this rental? No. Was the space-rental revenue taxable? No. Did the letter cover unattached poles? No.

Citations and references

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

Source

Original ruling text

November 18, 1991

Dear *****:

Thank you for your recent letter asking about the taxability of
revenue received form rental of space on your utility poles.

Utility poles, when in place as part of a utility line, are
considered to be improvements to realty. The rental of space on
the poles is therefore not a rental of tangible personal property.
The revenue received from the rentals is not subject to sales tax.

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. You may also write Tax Administration Division.

Sincerely,

Wanda Hutcheson
Tax Administration Division

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