We sell a color Doppler weather radar system (antenna, computer, and enhanced software) to TV stations for live severe-weather coverage -- is it exempt from Texas sales/use tax?

Subject

Doppler Weather System (Antenna, Computer And Software) — Used By Television Stations

Plain-English summary

A taxpayer explained to the Comptroller's office how its color weather radar equipment works, seeking to know whether the system is subject to Texas sales/use tax. The equipment is sold as a package: an antenna, a computer, and enhanced software, with the computer used for no other purpose.

How the system works. The antenna sends out a signal. When the signal returns, it is relayed to the computer, which overlays the returned signal data onto the appropriate area map -- that overlaid image is what the TV viewer sees on screen. This all happens in real time. By contrast, relying on the National Weather Service would introduce a three-to-four-minute delay; this equipment lets a station warn viewers about tornadoes or severe storms without that delay.

The holding. Based on those facts, the Comptroller determined the color weather radar system is used in the production of a news broadcast and therefore qualifies for exemption under Tax Code 151.318(p). The outcome is a straightforward exemption -- no tax due on the qualifying package.

What this means for you

TV stations buying weather radar systems

If your station buys a color weather radar system -- antenna, computer, and software sold together as a package, with the computer dedicated to that use -- and you use it to generate real-time weather graphics for your news broadcasts, the system fits the fact pattern the Comptroller found exempt under Tax Code 151.318(p).

Equipment vendors selling broadcast weather systems to Texas stations

You can point a TV-station customer to this ruling as support that a bundled antenna/computer/software weather radar package, dedicated solely to that function and used in producing news broadcasts, qualifies for the 151.318(p) exemption. Keep in mind this letter is based on the specific facts described (package sale, computer used for no other purpose, real-time overlay for broadcast) -- a system used for other purposes alongside broadcast, or sold as separate components, may present different facts than those addressed here.

Common questions

Q: Does a TV station's Doppler weather radar system qualify for a sales tax exemption in Texas?
A: Yes. The Comptroller ruled that a color weather radar system -- antenna, computer, and enhanced software sold as a package -- qualifies for exemption under Tax Code 151.318(p) because it is used in the production of a news broadcast.

Q: Does it matter that the computer is dedicated only to the weather radar system?
A: The ruling notes the computer is sold as part of the package and "is not used for other purpose," which was part of the facts underlying the exemption determination.

Q: Why does real-time delivery matter to the analysis?
A: The letter describes how the system processes the antenna's signal and overlays it on a map in real time, avoiding the three-to-four-minute delay of using the National Weather Service, so viewers get tornado/severe-storm warnings without delay. This real-time news-broadcast use is tied to the exemption finding under 151.318(p).

Q: What Texas statute is this exemption based on?
A: Tax Code 151.318(p).

Citations and references

Statutes and rules:

• Tax Code 151.318(p) (exemption for property used in the production of a news broadcast)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9612744L

Original ruling text

December 20, 1996

Dear ***:

I appreciate the time you and *** took to
explain how your color weather radar equipment works.

I understand that the equipment consists of an antenna,
a computer, and enhanced software. It was sold as a package,
and the computer is not used for other purpose.

The antenna sends out a signal. When the signal comes
back, it is relayed to the computer. The computer overlays
the information from the relayed signal with the appropriate
area map and that image is what the TV viewer sees.

The signal and overlay are done in real-time.
*** explained that if the station used the US
Weather Service, there would be a three to four minute delay,
and this equipment tells viewers about tornadoes or severe
storms without the delay.

Based on these facts, the color weather radar system is
used in the production of a news broadcast and qualifies for
exemption under Tax Code 151.318(p).

Please let me know if you have any questions. My number
is 1-800-531-5441, extension 3-4614.

Sincerely,

Adina Harrell
Tax Policy Division