State Tax Rulings
Free state tax letter rulings and advisory opinions with plain-English summaries, full citations, and the original source on every page.
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Which purchases by a Texas electric cooperative qualified for its sales-tax exemption?
The cooperative's meter-shop towel laundry service was exempt because it related to the cooperative's purpose. Kitchen towel laundry and cable service were not exempt on the facts given.
How did Texas tax a lump-sum office coffee service and the supplies used to provide it?
The lump-sum charge to the customer was not taxable. The provider had to pay its supplier tax on the machine, cups, napkins, filters, and stir sticks; coffee, cream, and sugar were exempt.
Did Texas classify parking gates, ticket dispensers, and card readers fixed to cement islands as real-property improvements?
Yes. Parking gates, ticket dispensers, and parking-card readers affixed to cement islands qualified as improvements to real property on the facts presented.
Which aircraft sales, rentals, repairs, charters, instruction, and support services were taxable in Texas?
Aircraft sales to individuals, rentals, parts, and supplies were taxable. Repairs, charters, pilot services, flight instruction, hangaring, preheating, and washing were not taxable.
Were the advertised services of a Texas skin-care clinic taxable, or was the clinic treated as a massage parlor?
No. None of the clinic's advertised services were taxable under state sales tax, and the business was not primarily engaged in massage, so massage-parlor law did not apply.
Could a Texas subsidiary use its parent corporation's direct-payment permit for its own purchases?
No. Each subsidiary that wanted to buy without paying tax to the seller and then accrue and remit the tax itself had to obtain its own direct-payment permit.
Were lump-sum convention tour packages taxable in Texas, and what if amusement tickets dominated the charge?
A lump-sum entertainment and tour package was not taxable. But if the customer charge mainly consisted of amusement-ticket costs, the full amount was taxable as an amusement admission.
Did direct Medicare or Medicaid reimbursement make a medical-equipment sale or rental a tax-exempt federal sale?
No. The transaction was a sale or rental to the patient, not the federal government, regardless of billing or reimbursement. It was taxable unless the equipment qualified for a medical exemption.
Were customer charges for using passive exercise equipment at a Texas salon taxable?
Yes. A salon charging customers to use passive exercise equipment was providing a taxable service. From October 2, 1984, charges were subject to 4.125% state tax plus applicable location tax.
Was cleaning the inside of a Texas well bore with hot oil taxable, and did the letter decide franchise-tax filing?
The hot-oil well-bore cleaning service was taxable. The letter did not decide whether the New Mexico corporation owed a Texas franchise-tax report; that answer was deferred to separate correspondence.
Were tanning-salon booth fees taxable under Texas's October 2, 1984 sales-tax changes?
No. The Comptroller said tanning-salon fees were not taxable under the sales-tax changes effective October 2, 1984.
Was electricity used to operate pipeline telemetering devices exempt from Texas sales tax?
No. The electricity was taxable because the telemetering devices transmitted pipeline data but did not actually transport gas through the pipelines.
How did Texas tax steam cleaning, repairs, and air-filter cleaning for motor vehicles versus off-highway equipment?
Cleaning and repairing off-highway equipment was taxable, while the same services on motor vehicles were not. Parts, soap, billing method, and mixed-use air filters had separate tax treatment.
Which gun-club membership fees, contest entry fees, reloading supplies, and club supplies were taxable in Texas?
Annual membership fees were taxable. Qualifying contest entry fees were not taxable as amusements; reloading supplies bought for resale could use a resale certificate, while club-use targets and suppl…
Was labor to cut a customer's glass or replace glass in a frame taxable in Texas after October 2, 1984?
Yes. Cutting customer-owned glass to shorten it or make shelves was taxable remodeling, and replacing glass in a frame was a taxable repair with the total charge subject to tax.
Were repairs to built-in heating, cooling, and plumbing equipment taxable in Texas after October 2, 1984?
Generally no for equipment wired or plumbed into the realty, such as central heating and air-conditioning units. Repairs to plug-in property, such as a window unit, and associated trip or mileage fees…
Which pre-October 2, 1984 Texas parking contracts qualified for the prior-contract sales-tax exemption?
A definite parking contract executed by October 1, 1984 could qualify without advance notice, but only for its fixed term and never beyond September 30, 1987. Later options and renegotiations could be…
Could a federal credit union claim Texas sales-tax exemption on parking, storage, repairs, and construction projects?
Yes. The federal credit union could issue exemption certificates for its own qualifying purchases, including parking when users were not charged, storage, repairs, and construction work.
Could each division of a Texas corporation file its own sales and use tax return?
No. All of the seller's permits used the same taxpayer number with different outlet numbers, so one consolidated return showing each outlet's data was required every reporting period.
When did Texas treat drapery installation as an improvement to realty, and which related labor charges were taxable?
Draperies usually remained tangible personal property, but became realty improvements when permanently integrated or installed by a contractor in a construction project. Reworking drapes and blinds wa…
Was a charge to cut lumber for a customer taxable in Texas after October 2, 1984?
Yes. The Comptroller said a charge to cut lumber or other tangible personal property was taxable, whether the customer brought it in or it was cut before the sale.
Could a contractor buy a trailer tax-free because it would use the trailer on a job for a tax-exempt customer?
No. Texas treated the trailer as a motor vehicle under Chapter 152, which imposed tax on each retail sale and contained no pass-through exemption for a vehicle a contractor used on a job for an exempt…
Was a Texas resident serving outside the state exempt from Texas motor vehicle tax on an out-of-state motor-home purchase?
No. The Comptroller said Texas provided no motor vehicle sales-and-use-tax exemption merely for military personnel. The Texas resident owed historical use tax when titling and registering the mini-mot…
Did a Texas hotel have to collect sales tax on laundry and dry-cleaning services sold to guests?
Yes. The hotel had to collect tax from guests for laundry and dry-cleaning services, but it could give an outside vendor a resale certificate instead of paying tax to that vendor.
Were color and wardrobe consultations, seminars, and shopping services taxable in Texas?
No. Consultation, seminar, and shopping services were nontaxable, but the service provider had to pay tax to suppliers on scarves, makeup, and other tangible items used to provide them.
Which Texas waterbed moving, assembly, repair, service-call, and delivery charges were taxable?
Water-mattress repairs were taxable. Moving systems, assembly or disassembly without a bed sale, ordinary service calls without taxable labor, and contract deliveries were not taxable.
Did inheriting a Texas business create successor liability for the deceased owner's state sales tax?
Not under the stated conditions. The heir avoided successor liability if no purchase price was paid to the estate and the heir did not assume estate debts or liabilities as a condition of inheritance.
How did Texas tax monument builders that installed headstones or vaults compared with sellers that provided no installation?
An installer was a contractor that paid tax on incorporated items and did not charge tax to the customer as tax. A monument seller providing no installation had to tax the full charge and hold a sales…
Which oilfield roustabout labor charges did Texas classify as taxable or nontaxable in 1984?
The result depended on the work. Installation and several cleanup tasks were nontaxable, tank-battery painting and injection-line repair were taxable, and materials used on nontaxable labor remained t…
Did a secured lender owe Texas sales or use tax after repossessing equipment and buying it back at an unsuccessful auction?
No. Sales tax did not apply when the property owner bought back its own equipment at auction, and no use tax was due on later business use if the original purchaser had paid the tax.
When were Texas tournament entry fees nontaxable, and were spectator admissions taxable?
Participant fees were nontaxable when they met the letter's contest-cost or contest-only facility tests. Spectator admissions were taxable, and integral items for taxable tournaments could be bought f…
Did clothing-alteration services become taxable in Texas on October 2, 1984?
Yes. The Comptroller classified clothing alterations with laundry, cleaning, and garment services in industry Group 721 and said they became taxable October 2, 1984.
Were home-computer game cartridges, custom software, and significantly modified canned software taxable in Texas?
Canned software, including computer-game cartridges, was taxable. Custom software and canned software that was significantly modified were not taxable.
Could a Texas restaurant buy charcoal used in food preparation without paying sales tax?
Yes. Charcoal consumed in preparing food for sale was an exempt necessary and essential processing material, and a qualifying restaurant could give the seller an exemption certificate.
When was electricity used to customize vehicles exempt as manufacturing electricity in Texas?
Electricity used to customize vehicles for the manufacturer qualified as direct manufacturing use, but each meter needed more than 50% qualifying use supported by a study. Electricity for remodeling, …
Did a Texas county have to collect tax on golf-course green fees and golf-cart sales or rentals?
The county did not collect tax on green fees because county-provided amusements were specifically exempt from amusement tax. Its sales or rentals of taxable items such as golf carts were taxable.
Did Texas sales-tax law changes make horse-boarding and stable services taxable?
No. The Comptroller said the sales-tax changes did not impose tax on boarding stables and that boarding a horse remained a nontaxable service.
Which purchases could federal realty-improvement contractors make tax-free in Texas after October 2, 1984?
Contractors owed tax on machinery, equipment, and consumable supplies used on the federal project, but could buy property tax-free when it would become part of federal realty after incorporation.
Were charges for trucking uranium ore taxable when the carrier did not sell the uranium?
No. Transportation charges for moving uranium were nontaxable when the company provided trucking only; the letter said the result changed if the company also sold the uranium.
Which advertising, admission, program, and novelty-item sales by the requesting organization were taxable in Texas?
Advertising space in newsletters, programs, and other publications was nontaxable, as were circus and shrine-dance admissions. Sales of programs and novelty items were taxable; bingo revenue was left …
Could a Texas school buy award jackets tax-free either to present to students or to resell to them?
Yes. A school could use an exemption certificate for jackets presented to students. For jackets sold to students, it used a resale certificate and had to collect and remit tax on the student sales.
Could a Texas school district buy athletic jackets tax-free either as student awards or for resale to students?
Yes. Award jackets could be bought with an exemption certificate. Jackets bought for sale to students required a resale certificate, followed by collection and remittance of tax on the student sale.
How did Texas apply an October 2, 1984 tax-rate increase to change orders and undelivered work under older contracts?
Owner-requested upgrades or specification changes made the entire change order subject to the added 1/8% tax. Supplier price increases or availability substitutions did not, and original undelivered w…
Was an equipment lease between related Texas corporations taxable when no cash changed hands?
The lease was taxable to the extent lease payments or receipts were recorded in the corporations' books. If no cash or book transfer existed, there was no consideration and no sales tax was due becaus…
Which residential appliance repair services did Texas classify as taxable or nontaxable?
Repairs to central air, built-in dishwashers, disposals, built-in ranges and microwaves, ceiling and attic fans, and built-in compactors were nontaxable. Repairs to portable or freestanding appliances…
Were membership dues for a home-service equipment library taxable in Texas?
No. The club's membership dues and described equipment-checkout arrangement were nontaxable, but the club had to pay sales tax when purchasing every item used in the business.
How did Texas's Comptroller distinguish taxable contractor purchases from tax-free materials on federal contracts?
Contractors had to pay tax on machinery, equipment, and supplies used to perform federal contracts. Materials and supplies that became part of the federal project could be purchased tax-free, under th…
Do materials that become part of a Texas newspaper lose their sales-tax exemption when the newspaper is distributed free?
No. The letter said giving newspapers away did not void the exemption for tangible personal property that becomes an ingredient or component part of a newspaper.
Did retailers selling tangible personal property on a Texas military base have to collect state, city, and MTA sales tax?
Yes, on the facts presented. Based on the city's statement that the base was within its limits, the Comptroller said retailers on the base should collect state, city, and MTA tax.
Were Texas city-pound, wrecker-service, and body-shop charges for storing impounded vehicles taxable?
Yes. The Comptroller treated the motor-vehicle storage fees as taxable, required the company to pay the tax, and said it could not give the storage providers a resale certificate.
Was a Texas steel seller's labor for flame cutting, sawing, and shearing its steel taxable?
Yes. The Comptroller treated flame cutting, sawing, and shearing the seller's steel as taxable remodeling, even when the work changed only the item's size and not its function.
Could electronic well-logging equipment qualify for a Texas exemption if immediately removed from the state, and was Texas repair labor taxable?
The equipment qualified for exemption under the cited Section 151.324 provisions if the purchaser immediately removed it from Texas. Repairing it in Texas did not void that exemption, but the repair l…
Was the membership card sold by the taxpayer's client subject to Texas sales tax?
No. The Comptroller said the membership card was not subject to tax, without describing the card's benefits or explaining the legal basis for the result.
Was a manufacturing-facility transfer into a newly formed 86/14 partnership taxable in Texas?
No. The Comptroller treated the described sale of a 14% interest and the partners' immediate contribution of their 86% and 14% interests as a nontaxable joint-ownership transfer under Section 151.306.
When was Texas sales tax due on a financing lease, and when could separately stated interest be excluded?
A financing lease was treated as a sale. Tax was due at possession or when the first payment became due, whichever came first, and applied to the full lease amount unless the interest rate or actual i…
Which Texas repair, handling, travel-time, and mileage charges were taxable when work was or was not covered by a manufacturer's warranty?
Manufacturer-warranty labor and the described handling charge for warranty parts were not taxable. Labor, travel time, and mileage for other service work were taxable unless performed under a manufact…
Did Texas's October 2, 1984 sales-tax changes make limousine service taxable?
No. The Comptroller said limousine service was not taxable under the October 2, 1984 changes to the Texas sales-tax law.
Was an aircraft-engine maintenance agreement subject to Texas sales tax?
No. The Comptroller said a maintenance agreement for repair of an aircraft was not taxable, whether the agreement covered the entire aircraft or only its engine.
When a corporation sells the stock of its foreign subsidiaries to a sibling company (an affiliate under common ownership, but not a direct parent-subsidiary relationship) as part of an internal reorganization, is the amount received includible in its New York entire net income?
No, the amount is excluded from New York entire net income. Petitioner planned to sell the stock of its U.K. subsidiaries to CIF, a sibling corporation under the same ultimate parent, as the first ste…
Was a standalone Texas courier service that delivered documents and small packages for others taxable?
No. A business that sold no products and merely delivered documents and small packages provided a nontaxable service. A retailer using that service might still have to tax delivery as part of its own …
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