Ezel / Tax Rulings / TX
TX 9201L1155C08 Sales and/or Use Tax (State,Local,MTA) 1992-01-30

Did a funeral-service provider owe Texas sales tax on separately stated burial-container installation and service fees?

Short answer: No. Separately stated installation and other service charges from a burial-container supplier were not taxable, while the separately stated container price was taxable. If a service company billed one lump-sum price for the container and funeral services, it paid tax on the container and collected no tax on the lump sum.

Apply this to your situation

This page answers the general question as of 1992. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1992
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 said a funeral-service provider did not owe sales tax on a burial-container supplier's separately stated installation and other service charges.

The separately stated price of the burial container itself was taxable. If a service company instead billed one lump-sum amount for the container and funeral services, the service company paid tax on the container and did not collect tax from the funeral provider on the lump-sum charge.

What this means for you

Funeral homes

Invoice structure controlled the result described in the letter. A supplier could separately state the taxable container and nontaxable service charges, while a service company's combined funeral-service price followed the lump-sum treatment.

Burial-container suppliers

The letter distinguished the sale of the container from installation and other services. Maintain clear invoice lines if applying that distinction.

Common questions

Was a separately stated installation fee taxable? No.

Was the burial container taxable? Yes, when separately stated.

What happened under one lump-sum charge for the container and funeral services? The service company paid tax on the container and collected no tax on the lump-sum charge.

Citations and references

  • 34 Tex. Admin. Code Rule 3.304

Source

Original ruling text

January 30, 1992

Dear *****:

I apologize for the delay in responding to your letter. As I
understand it, your company provides funeral services. You
purchase outside burial containers from various suppliers. The
suppliers may charge a service or "installation" fee in addition
to the cost of the container itself.

Question: Do we owe tax to a supplier on a service or installation
fee?

Answer: No tax is due on a burial container supplier's separately
stated charge for installation and other services. A separately
stated charge to your company for the container itself is taxable.

If a service company bills your company one lump-sum charge for the
container and funeral services, then the service company must pay
tax on the container and should collect no tax on the lump-sum charge.

For your information, I have enclosed Rule 3.304. This opinion is
based on the facts that you presented. Different facts, though
similar, might lead to different answers. If you have further
questions, feel free to write or call me at 1-800-252-5555,
ext. 3-3889.

Sincerely,

John Christian, Attorney
Tax Administration Division

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