Is a mail-based reminder service (reminding clients of special dates or events) subject to Texas sales tax, and what about gift baskets sent to Texas recipients as part of that service?

Plain-English summary

A taxpayer wrote to the Texas Comptroller's Tax Administration Division asking about the tax treatment of sales of a "mail" reminder service — a service that sends clients reminders of special dates or events. The Comptroller's response (signed by Al Van Allen) draws a distinction based on delivery method and on what is actually being sold:

• Reminder charges sent by mail: Not taxable. The letter specifically distinguishes mailed reminders from reminders sent by telephone, implying that the mail-based delivery method is what keeps these charges outside the tax base.
• Gift baskets: Separately, the letter addresses charges made by an Arizona firm for sales of gift baskets delivered to points in Texas. Those charges are subject to Texas sales tax if the baskets contain taxable items, since a gift basket is tangible personal property being sold and delivered into Texas.

The Comptroller notes the opinion is based on the facts submitted, and that other facts, though similar, may yield different results.

What this means for you

Businesses offering reminder or occasion-tracking services

If your service consists of mailing reminders of special dates or events to clients, charges for that service are not subject to Texas sales tax, based on this letter. The ruling draws a contrast with reminders sent by telephone, so the delivery channel may matter — a service that instead calls or texts clients could be treated differently.

Businesses that pair a reminder service with sending physical gifts

If your reminder service also involves arranging for a gift basket (or similar tangible item) to be delivered to a recipient in Texas, that portion of the transaction is treated separately from the reminder service itself. Charges for the gift basket are subject to Texas sales tax if the basket contains taxable items, regardless of whether the reminder charge is nontaxable.

Accountants and tax professionals

When evaluating similar mixed-service arrangements, this letter supports separating a nontaxable mailed notification/reminder charge from a taxable sale of tangible personal property (like a gift basket) delivered into Texas. Because the letter is fact-specific and from 1995, confirm it hasn't been superseded before relying on it for a current transaction.

Common questions

Q: Is a reminder service that mails clients notices about upcoming special dates or events subject to Texas sales tax?
A: No — charges for reminder services are not taxable when the reminders are sent through the mail rather than by telephone.

Q: Would the answer be different if the reminders were sent by telephone instead of mail?
A: The letter implies so — it specifically says reminders "are not taxable when...sent through the mail rather than by telephone," suggesting a different tax treatment could apply to telephone-based reminders, though this letter does not directly rule on that scenario.

Q: Are gift baskets sent to Texas recipients as part of this service taxable?
A: Yes, if the baskets contain taxable items. Charges made by the (Arizona) firm for sales of gift baskets delivered to points in Texas are subject to sales tax in that case.

Q: Does this ruling apply to any similar fact pattern?
A: No — the Comptroller states the opinion is rendered based on the facts submitted, and other facts, though similar, may yield different results.

Citations and references

No statutes, rules, or case law are cited in 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/9507L1361B07

Original ruling text

July 24, 1995

Dear **:

Thank you for your recent letter regarding the tax treatment of sales
of a "mail" reminder service.

Charges for reminder services are not taxable when the reminders
are sent through the mail rather than by telephone. Charges made
by the Arizona firm for sales of gift baskets delivered to points in
Texas are subject to sales tax if the baskets contain taxable items.

This opinion is rendered 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. 3-4680. The
direct line is 512/463-4680. You may also write to Tax
Administration, Comptroller of Public Accounts.

Sincerely,

Al Van Allen
Tax Administration Division

NOTE: Previous Accession Number 9507391L