Ezel / Tax Rulings / TX
TX 9204L1165F01 Sales and/or Use Tax (State,Local,MTA) 1992-04-14

Was a third party's electronic transmission of audio or audiovisual commercials to broadcasting stations subject to Texas sales tax?

Short answer: It depended on where the transmission originated. The Comptroller classified the transmission as a telecommunications service: a Texas-origin transmission was taxable, while one originating outside Texas was not subject to Texas sales or use tax.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

Electronic transmission of an audio or audiovisual commercial was a telecommunications service.

The advertising agency produced a commercial and sent the master to a third party, which transmitted it to broadcasting stations. The stations could record the commercial on disc or tape. If the transmission originated in Texas, the transmission charge was taxable. If it originated outside Texas, the service was not subject to Texas sales or use tax.

What this means for you

The letter's sourcing rule turned on the transmission's origin, not on whether a station recorded the delivered commercial or on the commercial's audio versus audiovisual format.

Common questions

What service did the third party provide? Electronic transmission of the commercial to broadcasting stations.

How did the Comptroller classify that service? As telecommunications.

Was a Texas-origin transmission taxable? Yes.

Was an out-of-state-origin transmission taxable in Texas? No, according to the letter.

Citations and references

The letter cited no specific statute or administrative rule.

Source

Original ruling text

April 14, 1992

Dear **:

You asked about the taxability of the electronic transmission of
audio or audio/visual commercials.

I understand the agency produces a commercial. The master is
then sent to a third party who transmits the commercial to various
broadcasting stations. The stations may record the commercial on
a disc or on tape.

The transmission of the commercial is a telecommunication service.
If the transmission originates in Texas, the charge is taxable. If
the transmission originates out of state, the service is not subject
to Texas sales or use tax.

My number is 512/463-4614, if you have any more questions. Or you
may write to the Tax Administration Division.

Sincerely,

Adina Whittemore
Tax Administration

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