If my litigation support business produces trial exhibits like scale models, graphs, photographs, or videotapes for an attorney, do I have to charge Texas sales tax?

Plain-English summary

A litigation support company asked the Comptroller's Tax Policy Division whether its services were taxable. The company provides consulting services to attorneys and sometimes produces physical trial exhibits — scale models, graphs, photographs, videotapes of crime scenes or property damage, maps, and charts — for use at trial. These exhibits are typically proprietary and made for a specific lawsuit, not generally reusable elsewhere.

The Comptroller drew a clear line between the two types of charges:

• Consulting services, when separately stated, are not taxable.
• Producing the exhibits (scale models, graphs, photographs, videotapes, maps, charts, etc.) is taxable, because it counts as "graphic arts" under 34 Tex. Admin. Code Rule 3.312.

Critically, the letter warns that if the company bills consulting and exhibit production as a single lump-sum charge, the entire charge becomes taxable. To keep the consulting portion tax-free, the charges must be separately stated on the invoice. The letter also notes that graphic arts are not recognized as proprietary information, so the "proprietary and not reusable outside the lawsuit" nature of the exhibits does not create any exemption from tax.

What this means for you

Litigation support companies and trial consultants

If you provide both advisory/consulting services and produce physical exhibits (models, graphics, video, photos, maps, charts) for attorneys, only the consulting portion is exempt — and only if it's billed separately from the exhibit production. Combining both into one flat fee makes the whole invoice taxable.

Attorneys and law firms purchasing litigation support

Expect to see sales tax charged on invoices for physical trial exhibits (scale models, photographs, videotapes, graphs, maps, charts), even though the underlying analysis or consulting that led to them is not itself taxed. Ask your vendor to itemize consulting time separately from exhibit production to avoid paying tax on the full bill.

Accountants and tax professionals

This ruling classifies exhibit production as "graphic arts" under Rule 3.312, not as a nontaxable professional/consulting service, and it rejects any argument that the proprietary or case-specific nature of an exhibit exempts it from tax. When billing mixed consulting/production engagements, confirm invoices separately state the two categories of charges.

Common questions

Q: Is legal consulting from a litigation support firm taxable in Texas?
A: No — separately stated consulting services are not taxable under this ruling.

Q: Is making a scale model, chart, or photograph for use as a trial exhibit taxable?
A: Yes. The Comptroller classified these exhibit-production services as "graphic arts" under Rule 3.312, which is taxable.

Q: What happens if consulting and exhibit-production charges are billed together as one price?
A: The entire lump-sum charge becomes taxable, including the portion that would otherwise be exempt consulting. Charges should be separately stated to avoid this.

Q: Does it matter that the exhibits are proprietary and only useful for one specific lawsuit?
A: No. The letter states that graphic arts are not recognized as proprietary information, so that fact does not exempt the exhibit-production charges from tax.

Q: Can another business rely on this letter?
A: No. This is a redacted STAR letter ruling; it can be used as a detrimental reliance defense only by the taxpayer it was issued to, and it's based on the specific facts that taxpayer presented.

Citations and references

Statutes and rules:

• 34 Tex. Admin. Code Rule 3.312 (Graphic Arts or Related Occupations)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9512775L

Original ruling text

December 12, 1995

Dear ***:

In your letter of December 8, 1995, you asked about the taxability of
litigation support services.

Your client provides consulting services and sometimes produces exhibits for an
attorney to use in the trial. The exhibits would be proprietary and generally
not suited for any use outside of a specific law suit.

The client's separately stated consulting services are not taxable. Your
client's services for producing exhibits [scale models, graphs, photographs,
video tapes of crime scenes or property damage, maps, charts, etc.] are taxable
as graphic arts [Rule 3.312]. A lump-sum charge for consulting and exhibits
would made the entire charge taxable, so to avoid potential problems charges
for consulting and exhibits should be separately stated. Graphic arts are not
recognized as proprietary information.

This opinion is based upon 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 extension 50892. The direct line is
512/475-0892. You may also write to Tax Policy Division, Comptroller of Public
Accounts.

Sincerely,

John J. Fitzgibbons, CPA
Tax Policy