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 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 …
When did Texas require tax collection on a financing lease, and what collection right did the lessor have against the lessee?
Tax had to be collected when the lessee took possession or when the first payment became due, whichever came first. The cited law required adding tax to the selling price and provided a remedy to coll…
How did Texas distinguish a permanent real-property improvement from a sale and installation for floating boat docks and marinas?
Classification depended on permanent intent and whether removal would substantially damage the realty or improvement. The letter explained the tax rules for each category but did not expressly decide …
How did Texas tax a city's golf green fees, sales of food or other tangible property, and parking-meter fees in 1984?
The city did not collect tax on green fees at its golf course. It had to collect the stated 5 1/8% historical rate on sales of tangible property, including food, and on all parking-meter fees.
Which automobile, component, and accessory repairs did Texas treat as taxable under the 1984 repair law?
Repair of a motor vehicle, an operational component, or a component accessory was not taxable. Repair of an accessory was taxable; the letter listed a car radio as a nontaxable component-accessory exa…
Were Texas manicure, waxing, and sculptured-nail services taxable, and who paid tax on the supplies used?
The services were not taxable. The provider had to pay tax when purchasing all tangible items used to perform the manicures, waxing, and sculptured-nail services.
How did Texas tax TV pickup and delivery, warranty repair parts, and flat-rate manufacturer warranty charges?
TV pickup and delivery charges were taxable. Manufacturer-warranty repair parts created no tax liability if properly recorded and bought with an exemption certificate, and a flat-rate charge to the ma…
Were tool regrinding and sharpening taxable in Texas after October 2, 1984, and where was tax due?
Yes. The Comptroller classified regrinding and sharpening tools as repair work that became taxable on October 2, 1984, and said tax was due where the customer was located.
Did Texas's October 2, 1984 tax on repair and maintenance labor apply to piano tuning and repair?
Yes. The Comptroller said new legislation made repair and maintenance labor taxable effective October 2, 1984, so piano tuning and repair were taxable.
Was a dealer's $150-per-month employee use of inventory cars with dealer plates a taxable motor vehicle rental?
No. Internal Comptroller guidance concluded the arrangement was not a rental because employees did not receive exclusive use: the dealer could recall each car for demonstration or sale at any time. Th…
Was a Texas charge for videotaping monitored television news reports taxable when either the provider or customer supplied the tape?
Yes. The Comptroller treated the videotaping charge as taxable processing whether the provider or customer supplied the tape. The letter also allowed credit for tax paid when purchasing blank tape.
How did Texas tax truck fabrication, equipment installation, wreck repair, replacement, and body-conversion work?
The treatment depended on the job. Motor-vehicle repair labor was not taxable, but remodeling was. Fabrication and equipment sales were taxable, separately stated installation could be excluded, and d…
Was the Personal Independent Transport Accessory exempt from Texas sales tax as a wheelchair lift?
Yes. The Comptroller said the Personal Independent Transport Accessory was exempt from sales tax as a wheelchair lift.
What did this Texas letter say about the prior-contract exemption for a fixed-term parking contract?
The letter says a fixed-term parking contract entered before October 2, 1843 qualified for the prior-contract exemption through September 30, 1987. Because the printed threshold is 1843, the source do…
How did Texas's October 2, 1984 tax change affect ongoing boat repairs, boat-lifting charges, and slip rentals?
Documented repairs begun before October 2, 1984 could finish under the old statute and rate. A separately stated boat-lifting charge became taxable on that date, while boat slip rentals were not taxab…
Which all-breed dog-show admissions, entry fees, printed programs, and catalog advertising were taxable in Texas?
Spectator admission charges and sales of printed programs were taxable. Fees paid to enter a dog in the show and sales of advertising in the catalog were not taxable.
Was providing and maintaining power generators at customer locations for a flat daily charge a taxable Texas rental?
Yes. The Comptroller treated the arrangement as a taxable generator rental even though the provider maintained the units. Tax applied to the daily or standby rate, and engine oil and filters could be …
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