Ezel / Tax Rulings / TX
TX 9203L1161B11 Sales and/or Use Tax (State,Local,MTA) 1992-03-06

Could a Texas business buy packaging tax free for computer hardware and duplicated software disks sold to customers?

Short answer: Yes. Packaging for manufactured computer hardware sold for resale was tax free, and so was packaging for resale disks containing software whose rights the business owned.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 company manufactured computer-hardware components, wrapped and packaged them, and sold them for resale. The Comptroller said the wrapping and packaging supplies could be purchased tax free.

The company also owned rights to software, duplicated that software onto disks, and packaged the disks for resale. Packaging supplies for those disks could likewise be purchased tax free.

What this means for you

The ruling covered packaging used with products destined for resale. For the software disks, the letter specifically relied on the fact that the company owned the software being duplicated.

Common questions

Was packaging for the manufactured hardware tax free? Yes.

Was packaging for duplicated software disks tax free? Yes, where the company owned the software rights and sold the disks for resale.

Citations and references

The letter cited no specific statute or rule.

Source

Original ruling text

March 6, 1992

Dear **:

Thank you for your recent letter asking about the sales tax law as it
pertains to wrapping and packaging.

You stated: Our company manufactures computer hardware components and
then wraps and packages the product for resale.

Response: The wrapping and packaging supplies for the computer hardware
components may be purchased tax free.

You stated: Another facet of our business is to duplicate software
disks, for which we own rights to the software, and then wrap and package the
disks for resale.

Response: Since you own the software being duplicated, the wrapping and
packaging supplies may be purchased tax free

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

If you have any additional questions or need more information, you may
call me toll free at 1-800-252-555, extension 3-4633. The regular number is
512/463-4633. You may also write to the Tax Administration Division.

Sincerely,

Wanda Hutcheson
Tax Administration Division

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