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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Were charges to haul fresh water to frac tanks at a customer's well location taxable?
No under the stated facts. Section 151.315 exempted the sale of water, and the letter said charges to transport nontaxable items were not taxable.
Is the lease of a relocatable modular office building subject to sales tax, even though it is classified as real property for real-property-tax purposes?
The lease is taxable as a rental of tangible personal property; the modular building is not a capital improvement even though it is taxed as real property for real-property-tax purposes. Hudson River …
Can a charter fishing boat operator buy its boats, fuel, and supplies exempt as commercial fishing, and are its charter fees taxable admissions?
The operator's boats, fuel, and supplies are taxable because charter sport fishing does not qualify for any commercial-fishing exemption; but the charter fees it charges customers are exempt as partic…
When were vehicle and equipment leases to federal banks or other governmental organizations exempt from Texas tax?
For motor vehicles, the historical exemption required title in the lessor's name, a lease to a qualifying public agency, and exempt license plates; standard plates made the vehicle taxable, and tax on…
Could a foreign buyer obtain a Texas sales-tax refund by proving promptly that purchased goods cleared U.S. Customs?
Possibly, at each retailer's option. Tax was due when taxable goods were transferred in Texas, but a retailer could refund it and seek reimbursement if the buyer proved the same goods cleared U.S. Cus…
Could an oil-and-gas operator use its own direct-payment permit for purchases made for subsidiary-owned leases?
Only in the stated general-partner arrangement. Otherwise, each qualifying subsidiary needed its own permit; the operator could buy under a subsidiary's permit only when a legal purchasing-agency agre…
When a petroleum business passes its Article 13-A gross receipts tax through to customers in the price they charge, does that passed-through tax amount itself get folded back into the company's own taxable gross receipts, creating an additional tax liability?
Yes -- passing the tax through creates additional tax liability. The Article 13-A gross receipts tax applies to ALL receipts from petroleum sales without any deduction for cost or expense, and is trea…
When was condominium electricity exempt residential use versus taxable commercial use?
Owner use and tenant stays of 30 days or more were exempt residential use; stays under 30 days were taxable commercial use. The association could claim exemption if it substantiated over 50% qualifyin…
Was the total charge taxable for converting a motor vehicle to LG fuel or dual gasoline/LG fuel?
Yes. The Comptroller classified each described bolt-on conversion as remodeling because it changed the vehicle's form, shape, or style without changing its identity or nature. Both parts and installat…
How did Texas treat lump-sum golf tours, included Texas amusement tickets, and separately stated tickets?
The tour operator did not collect tax on a lump-sum tour. For a Texas amusement ticket included in the package, tax was paid to the supplier; if separately stated, the operator could buy it for resale…
What sales-tax treatment applied when drilling tools, their lease, and lessor rights moved through a trust before customer rentals?
The Comptroller treated execution of the lease, the combined lease assignment and equipment transfer, and the trust-to-operator lease as nontaxable resale steps. The operating lessee collected tax on …
Were customer charges for provider-controlled water-conditioning systems taxable equipment rentals or nontaxable services?
They were nontaxable services under the stated arrangements because the provider retained ownership and operating control and performed all maintenance. Billing equipment and service separately did no…
Could seasonal cotton gins claim an electricity exemption on off-season bills that spread processing-period charges across the year?
Yes after reconsideration, if the predominant charge on the off-season bill was attributable to seasonal processing use. The March 14 letter reversed the attached February 22 answer, which had denied …
Could an amusement park collect and remit tax at its own jurisdiction's rate on tickets consigned for same-price resale?
Yes in both confirmed scenarios. The park could collect and remit tax at its own local and state rate when a consignee resold tickets at cost, including when the consignee sold statewide and received …
When were golf or tennis tournament entry fees not taxable under the corrected 1985 answer?
Only when both conditions were met: the entry fee exceeded the usual green or court fee for the same period, and part of the fee funded tournament awards. The letter called this a clerical correction,…
Was dog grooming taxable when performed for cosmetic reasons versus as a necessary part of medical treatment?
Cosmetic dog grooming was taxable regardless of who performed it. Shearing or clipping that was necessary to an actual medical treatment was not taxable.
Which listed truck and equipment repair-labor charges were taxable after the October 2, 1984 change?
Repair labor remained exempt for the listed motor vehicles—garbage, dump, flatbed dump, wrecker-lift, and car-hauler trucks, plus dump trailers—but was taxable for dozers, loaders, backhoe/loader trac…
When could condensate used as well-treating fluid be sold tax free, and when was tax due?
Condensate was generally taxable. A well operator could give an exemption certificate when treating its own well and the condensate remained in and was sold with the crude; a reseller could give a res…
Was a bulk sale of coupons taxable when customers later exchanged them at the box office for amusement tickets?
No at the coupon-sale stage because the coupons were not themselves amusement admissions. Sales tax was collected from the customer when the coupon was exchanged at the box office for an admission tic…
Who collected and reported tax when amusement parks placed tickets with at-cost distributors versus markup resellers?
For non-ticket sellers distributing tickets at cost or free, the parks could assume collection and liability, and the distributors needed no permits or reports. Markup resellers were admission sellers…
When did a farm or ranch computer qualify for the agricultural sales-tax exemption?
Only when used exclusively to produce, process, pack, or market agricultural products. Dairy, crop, feeding, and breeding records qualified; household expenses, payroll, and tax reporting did not. STA…
What rate applied to leases signed before October 2, 1984, and how were renewals treated?
The historical prior-contract rule preserved the rate in effect when a pre-October 2 lease was signed, including open-ended contracts, through September 30, 1987. Renewals and renegotiations were new …
Were data-processing leases and sales to the U.S. Government taxable, and did an out-of-state seller need a Texas permit?
The federal government could rent, lease, or buy tangible property for its own use without tax. The Virginia seller needed no Texas permit or collection duty on isolated direct-shipped sales because i…
When could nonprofit volunteer groups sell food and drinks tax free at an annual fundraiser, and were festival T-shirts taxable?
The $6 T-shirts were taxable. Food and drink could qualify only at a no-longer-than-one-week annual fundraiser run exclusively by nonprofit volunteers, with no catering, paid preparation or service, c…
Did a pre-October 2, 1984 software lease qualify for prior-contract relief, and was there an occasional-lease exemption afterward?
The existing software lease remained untaxed until modification, extension, or September 30, 1987, whichever came first. Effective October 2, 1984, no occasional lease or rental provision remained, so…
Were nightclub and bar admission charges taxable when the venue had a dance floor but no live entertainment?
Yes. The February 22 letter corrected the attached January 30 answer and said admission charges to nightclubs and bars with dance floors were taxable even without live entertainment.
Which oilfield heating, cleaning, water, brine, KCL, hauling, testing, and well-killing charges were taxable?
The 16-part answer was operation-specific: testing tubing leaks, produced-water hauling, fresh water, and certain oil-cleaning steps were not taxable; steam cleaning, paraffin removal, sand cleanout, …
Were canoe excursions taxable under Texas's newly enacted tax on amusement services?
Yes. The 1985 letter classified canoe excursions as amusement services and said they were subject to sales tax effective October 2, 1984.
Could a lender recover Texas motor vehicle tax it financed when the borrower defaulted and lost the truck tractor?
No. The Comptroller said tax was legally imposed on the motor vehicle sale and remained due even after the borrower defaulted and lost the truck tractor. Texas law provided no refund to a lienholder m…
When was tax due on financing and operating leases, and could an equipment-acceptance certificate establish possession?
For financing leases, tax arose at possession or the first payment due, whichever came first; a later balloon payment already included in the base was not taxed again. An acceptance certificate could …
What state, city, and MTA sales taxes applied to tickets for traveling carnival rides?
All ride tickets sold and redeemed were subject to state tax and applicable local tax. City tax followed the ride's operating location, MTA tax applied within the proper authority, and rides in a non-…
Which pulling-unit, pressure-testing, hot-oil, and equipment-cleaning services were taxable?
Pulling-unit work to remove or install pumps, rods, or tubing was taxable with mileage and per diem. Ordinary pressure testing and heating crude to remove sale-blocking impurities were not taxable; ho…
Was Gulf Salt Dome Ceiling Fluid exempt from sales and use tax when it met the Tax Code definition of diesel fuel?
Yes, if the product qualified as diesel under Tax Code Section 153.001(4). It still had to be accounted for on the distributor's monthly diesel-fuel tax report.
How were hydrostatic testing, repair, fabrication, leasing, and delivery of compressed-gas semi-trailers taxed?
The described testing and non-remodeling work were not taxable because the trailers were motor vehicles. Fabrication components could be bought for resale; motor-vehicle tax arose at registration for …
Was a customer charge for use of a skin-tanning booth taxable?
No under the facts presented. The 1985 letter stated simply that the charge for a tanning booth was not taxable.
Was $1 paid for a token redeemable for food or drink taxable as an amusement admission, and when was food tax collected?
The $1 token charge was not an admission because the token functioned like a gift certificate. Sales tax was collected when the token was redeemed for food or drink.
Were rental charges for safe-deposit boxes affixed to building walls or floors taxable?
No under the stated facts. The Comptroller said the box-rental charges were not taxable and suggested refunding tax previously collected from customers and applying for a refund. The response did not …
When were scuba excursions, crewed boat charters, and lump-sum diving travel packages taxable?
A standalone scuba excursion was a taxable amusement, while a crewed boat charter used only for transportation was not taxable. A lump-sum travel package dominated by nontaxable travel services was no…
How did Texas tax hole-digging equipment mounted on a conventional truck versus a specialized half-cab chassis?
Design controlled. A conventional truck with an attached hole digger was taxed as a motor vehicle, while a half-cab specialized unit was taxable equipment. Repair tax treatment also differed.
When did a physician-prescribed Texas health-club membership qualify for a sales-tax exemption?
Health-club fees were exempt when supported by a licensed practitioner's written prescription to treat a specific malady. Each membership renewal needed a new or extended prescription to remain exempt…
Were grease-trap services, standalone consultations, and silver reclamation from printer waste taxable?
Grease-trap pumping, modifications, and installation were not taxable when the concrete traps were permanently embedded in the earth. A separately stated consultation without a tangible-property sale …
Did equipment added to a pre-October 2, 1984 Texas master lease preserve the occasional-sale exemption?
Yes, if Texas tax had been paid on the equipment. The old master lease remained one exempt transaction, but post-October 2, 1984 additions were taxable to the extent they increased the lease price.
Can a restaurant avoid Texas sales tax by labeling a required meal price as a charitable contribution?
No. A required set payment for a taxable item is a sale, not a charitable contribution. Restaurant meals sold for stated amounts were taxable even though menus and checks labeled the prices as contrib…
Was pumping hot oil down a Texas well bore to remove paraffin or another obstruction taxable?
Yes. Pumping hot oil down a well bore to dissolve paraffin or remove another obstruction was taxable maintenance because the tubing was tangible personal property.
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…
How these rulings are useful
- See how the rule applies: A letter ruling shows how a state revenue department actually applied the tax law to a specific business and set of facts.
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