Does a Texas city owe sales tax on chairs, tents, and other equipment it provides for cemetery funeral services or convention center room rentals?

Plain-English summary

A Texas city asked the Comptroller's office about sales tax on equipment it rents out in two situations: (1) chairs, tents, and artificial grass it provides at graveside funeral services in a city cemetery, and (2) equipment it provides to people renting rooms or space at the city's convention center.

The Comptroller's answer was no tax due in either case, but for two different reasons:

• Cemetery/funeral equipment: providing the chairs, tents, and artificial grass at a graveside service is treated as part of the nontaxable funeral service itself, not as a standalone taxable rental of tangible personal property.
• Convention center equipment: the equipment the city provides to a room or space renter is treated as incidental to that person's rental of real property (the room or space), and rental of real property is not taxable — so the equipment that comes along with it isn't taxed separately either.

The letter closes with the standard caveat that the opinion is based on the facts presented, and could change if the facts are different.

What this means for you

Cities and municipal cemetery/convention operations

If your city (or a similar public entity) provides setup equipment like chairs and tents as part of running a graveside funeral service, you're not required to collect sales tax on that equipment separately — it rides along with the nontaxable funeral service. The same logic applies to equipment bundled into a room or space rental at a city-run convention center: because the underlying rental of the real property isn't taxable, equipment provided as part of that rental isn't taxed either.

Funeral homes, cemeteries, and event venues generally

This letter is about a city's own equipment, but the reasoning it uses — that equipment provided as an incidental part of a nontaxable service or a real property rental doesn't become a separately taxable rental — is the kind of analysis worth discussing with a tax professional if you provide similar equipment alongside funeral services or facility rentals.

Accountants and tax professionals

Note the letter draws a distinction between two different legal bases for the same "no tax" outcome: the funeral equipment is nontaxable because it's part of a nontaxable service, while the convention center equipment is nontaxable because it's incidental to a nontaxable real property rental. No statute or rule is cited in the letter itself, so this reasoning should be verified against current Comptroller guidance before being relied on for a similar fact pattern.

Common questions

Q: Does a city owe sales tax on chairs and tents it sets up for a graveside funeral service?
A: No. The Comptroller treated this as part of the nontaxable funeral service, not a taxable rental of tangible personal property.

Q: What about equipment provided to someone renting a room or space at a city convention center?
A: Also not taxable. The equipment's use is incidental to the rental of the real property (the room or space), and real property rental is not taxable.

Q: Does this ruling cite any specific statute?
A: No. The letter as published does not cite any Tax Code section or Comptroller rule — it states the conclusion based on the facts presented.

Q: Can another taxpayer rely on this exact letter?
A: No. Per STAR's standard policy, a letter can only be the basis of a detrimental-reliance claim for the taxpayer it was issued to, and the letter itself says the opinion could change on different facts.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9304L1235G08

Original ruling text

April 26, 1993

Dear ***:

Thank you for your letter concerning the equipment rentals at city
cemeteries and city convention centers.

Providing equipment for funeral services at a city cemetery is
considered to be part of a nontaxable funeral service rather
than the actual rental of tangible personal property. The City
of ** should not collect sales tax on the usechairs,
tents, and artificial grass at the funeral service.

The City of ** should not collect sales tax on the use of
equipment provided to persons renting rooms or space at the City's
Convention Center. The use of the equipment by the person renting the
room or space is incidental to the rental of the real property which is
not taxable.

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

You may call me toll free at 1-800-531-5441, ext. 5-0030. The direct
line is 512/475-0030. You may also write to Tax Administration,
Comptroller of Public Accounts.

Sincerely,

David Somerville
Tax Administration Division

NOTE: Previous Accession Number 93050117.L02