Is Texas sales tax due on the gross receipts from coin-operated air machines (tire inflators)?

Plain-English summary

A taxpayer wrote to the Comptroller's office asking how Texas sales tax applies to the gross receipts collected from coin-operated air machines — the familiar tire-inflator machines found at gas stations and similar locations. The Comptroller's office responded simply: the gross receipts from these coin-operated air machines (tire inflators) are not subject to sales tax.

The letter is short and does not explain the reasoning behind the conclusion or cite any statute or rule. It notes, as is standard in these letters, that the opinion is based on the facts submitted and that other facts, though similar, may yield different results.

What this means for you

Business owners operating coin-operated air machines

If you own or operate coin-operated tire-inflator air machines in Texas, this letter indicates that the coin receipts from those machines are not subject to sales tax. Because the letter does not explain why, and does not cite a statute or rule, you should confirm this treatment still reflects current Comptroller policy before relying on it, especially if your situation involves additional facts (for example, machines that also dispense other services or products).

Accountants and tax professionals

This is a short-form STAR letter ruling with no statutory citation and no explanation of the underlying reasoning. It answers a narrow factual question (taxability of tire-inflator air machine receipts) and should be read as a data point on the Comptroller's historical treatment of a specific type of coin-operated vending activity rather than as a fully reasoned policy statement.

Common questions

Q: Is sales tax due on money collected from coin-operated tire inflator air machines in Texas?
A: According to this letter, no — the gross receipts from coin-operated air machines (tire inflators) are not subject to sales tax.

Q: Does this letter explain why these receipts are exempt?
A: No. The letter states the conclusion without citing a statute, rule, or explanation of the Comptroller's reasoning.

Q: Can I rely on this letter for my own coin-operated machine business?
A: The letter is based on the specific facts submitted by the taxpayer who requested it, and STAR letters can generally only be relied upon for detrimental-reliance purposes by the taxpayer to whom they were issued. Other facts, even if similar, may yield different results.

Citations and references

No specific statutes or administrative rules are cited in the text of this letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9501L1336C13

Original ruling text

January 16, 1995

Dear **:

Thank you for your letter dated January 9, 1995, regarding sales tax as it
applies to the gross receipts from coin operated air machines (tire inflator).

The gross receipts from coin operated air machines (tire inflator) are not
subject to sales tax.

This opinion is based on the facts you submitted. Other facts, though similar,
may yield different results.

You may call me toll free at 1-800-531-5441, ext. 50330. The direct line is
512/475-0330. You may also write to Tax Administration, Comptroller of Public
Accounts.

Sincerely,

Bettie Peterson
Tax Administration Division

NOTE: Previous Accession Number 9501899L