Texas State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Texas, with full citations and the original source on every page.
No Texas rulings match these filters
Try a different search term or clear the filters.
Could a registered engineer's signature and seal replace the purchaser's signature on a predominant-use utility exemption certificate?
No. The engineer certified the study, but the purchaser still had to sign. An agent could sign with specific power of attorney, subject to the utility's acceptance.
When could restaurants sell meals tax-free to government employees or religious, charitable, and educational organizations?
Only when the exempt entity or its authorized agent made and directly paid for a qualifying purchase with valid documentation. Official travel alone did not exempt an employee's meal.
What documentation did a natural-gas seller need for predominant-use exemptions or gas delivered through a Texas pipeline interconnect for out-of-state use?
The seller needed valid exemption documents or collected tax. For out-of-state transport, pipeline contracts or invoices naming the foreign delivery point could prove export.
Could an exempt university buy telephone lines for fire-safety hookups in university-owned fraternity houses without paying sales tax?
Yes. Texas said the exempt university could give the telephone company an exemption certificate instead of paying tax on the fire-safety telephone lines.
Was physician-prescribed or physician-dispensed methadone exempt, and how were dispensing bottles and prior tax payments treated?
Methadone was exempt when prescribed or dispensed by a physician. Prescription containers sold with it were exempt, while bottles used for drugs not sold were taxable.
Were charges for guided tours of a choose-and-cut Christmas tree farm subject to Texas sales tax?
Yes. The Comptroller treated the guided tours as taxable because they were not primarily educational, although an exempt organization could buy admission for its members with an exemption certificate.
How did Texas local sales taxes apply to residential and commercial natural-gas and electricity use, and to exemption certificates?
Commercial utility use was taxable and residential use was generally exempt for special-purpose districts, but a city could tax residential use if it retained or reimposed that tax.
When were printed inserts for Texas newspapers or magazines exempt from sales tax?
Newspaper inserts were exempt when delivered by the printer to the newspaper distributor with supporting documentation; magazine inserts were generally taxable.
Could a debt collector accept a Texas sales-tax exemption certificate from a bank holding notes formerly connected to the FDIC or FSLIC?
No. The bank, not the FDIC, was the debt-collection client, and the letter found the bank was not a tax-exempt governmental entity.
Which purchases could a property manager make tax-free in Fannie Mae's name under the reviewed Texas management contract?
Items bought in Fannie Mae's name and incorporated into or used on the managed property could qualify; the manager's own phone, office supplies, and equipment did not.
Did Texas utilities need exemption certificates for electricity accounts coded as agricultural irrigation?
Yes. Power used to irrigate farm or ranch products for sale was exempt, but the utility still needed a certificate showing exclusive or predominant qualifying use.
Could a private lessor buy materials and services tax-free for GSA-required improvements to its leased building?
Yes, by exemption certificate for items incorporated for GSA's primary use and benefit; a resale certificate applied only to goods or services separately resold to GSA.
What Texas tax exemptions applied to the Boy Scouts National Council and individual branches or troops?
The National Council had a 501(c)(3) sales-tax exemption, while all branches and troops had educational-organization exemptions covering sales, hotel, and motor-vehicle taxes.
Which animal feed, medicines, and supplements were exempt from Texas sales tax?
Feed normally consumed by farm or ranch animals, animals held for sale, and wildlife was exempt; pet feed was generally taxable unless a documented special use qualified.
Were sales of pecan trees taxable in Texas?
Generally yes, but a buyer in the business of raising and regularly selling pecans could buy the trees exempt by giving the seller an exemption certificate.
Was labor for a scheduled recurring turnaround on functioning real property at a chemical plant taxable?
No. The Tax Policy Committee treated periodic recurring turnaround work on functioning real-property improvements as nontaxable maintenance labor.
Which dog food, medicines, equipment, and supplies could a Texas kennel buy tax-free?
Food for breeding dogs whose offspring were held for sale, and for those offspring, was exempt; food for racing or boarded dogs and the listed kennel equipment was taxable.
Could a natural-gas marketer making only exempt sales issue a resale certificate without holding a Texas sales-tax permit number?
Yes. A supplier could accept the no-number certificate if the buyer claimed all sales were for resale or exempt customers and the supplier lacked contrary knowledge.
Could contractors building the federal Homeport naval facility in Corpus Christi rent equipment and obtain supplies tax-free?
Yes. Although federal-contract equipment rentals were generally taxable, Homeport contractors could give suppliers exemption certificates for qualifying contract inputs.
Did a predominant-use utility study completed before August 3, 1987 need later engineer certification or a replacement study?
No. Pre-August 3, 1987 studies needed neither engineer certification nor replacement, though changed utility uses required an update.
Was a fee for picking up cardboard for baling and resale taxable, and how was the later cardboard sale documented?
The pickup fee was taxable garbage collection. On sale to a shingle manufacturer, the recycler had to collect tax or accept a valid exemption certificate.
Could a Texas tax-exempt organization buy health-club memberships without sales tax for children in its program?
Yes, if the organization itself paid for the memberships, they related to its exempt purpose, and it gave the seller a properly completed exemption certificate.
Was a bunker receipt enough to document Texas's sales-tax exemption for fuel consumed by a vessel operating exclusively in foreign or interstate commerce?
No. The fuel could qualify when consumed in a vessel operating exclusively in foreign or interstate commerce, but the purchaser had to give the supplier a valid, complete exemption certificate. The ce…
Could a company use its multistate sales-tax exemption certificate in Texas, and when would it need a Texas sales-tax permit?
The enclosed multistate certificate was not acceptable as either a Texas resale or exemption certificate. The Comptroller could not decide the permit question without more facts, but said a company pe…
When could a lump-sum vessel repairer buy repair materials tax-free in Texas?
For a vessel of at least eight tons used exclusively and directly in a commercial enterprise, qualifying repair materials were exempt, but tools and equipment were not.
Were pressure washers used to clean farm and ranch equipment exempt from Texas sales tax?
Yes, if used exclusively to maintain equipment used exclusively to produce agricultural products for sale; a later registration rule also applies.
Did heating thickened black liquor solely so it could be vacuumed from outdoor storage and moved indoors count as processing in Texas?
No. The Comptroller treated the activity as transportation rather than processing and allowed an exemption certificate stating that purpose.
Were computer-based payroll services taxable when they included printing checks, filing payroll reports, withholding taxes, and paying payroll taxes?
Yes. The Comptroller treated computer-performed payroll work as taxable data processing, including checks, reports, withholding, and tax payments. A customer with Texas exempt-organization status coul…
Were Alcoholics Anonymous writings and pamphlets sold by an Intergroup subject to Texas sales tax?
Its own qualifying publications were exempt, but public sales of other publications were taxable unless a separate exemption applied.
Were salt, sodium bisulfate, and ice used by commercial fishing boats exempt from Texas sales tax?
Common table salt and qualifying ice were exempt; sodium bisulfate was taxable, and other salts required a separate exemption basis.
Could a Texas farm operator buy fertilizer for Bermuda grass in a livestock area and feed for pond fish without sales tax?
Yes. Fertilizer used on Bermuda grass in the livestock area qualified for the agricultural exemption, with an exemption certificate. Feed for catfish, bass, and bream used to control pond insects and …
Was applying a protective sealcoat to deteriorating asphalt taxable restoration or nontaxable scheduled maintenance, and could a signed exemption certificate protect the contractor?
The Comptroller classified the sealcoating as taxable restoration because the product materials described stages of asphalt deterioration and steps to restore it. Calling the proposal “parking lot mai…
Could an out-of-state printer accept an exemption certificate for direct mail sent into Texas for a customer with no Texas presence, and what if the customer was in Texas?
Yes for the no-presence customer if the certificate stated that fact and that the materials entered interstate commerce through U.S. mail in Mississippi. For a Texas customer, the printer had to colle…
Could a Texas repair or remodeling contractor accept a direct-payment certificate, buy transferred materials for resale, or use the certificate on lump-sum new construction?
A contractor could accept a direct-payment exemption certificate for taxable repairs and remodeling performed for a permit holder and buy materials transferred to the customer for resale. The contract…
Could a Texas dairy farmer buy paper towels tax-free under the agricultural exemption?
Only when the towels were used directly to produce milk for sale, such as cleansing udders. Towels used for the farmer's hands or general washing or drying of a cow were taxable. STAR warns that a 201…
Were foam chemicals and foam-dispensing equipment exempt when customers used them to protect taxable products during shipment?
The foam chemicals could qualify as exempt wrapping or packaging supplies when used to further the sale of taxable items, but the dispensing equipment and foam-in-place system were taxable. A qualifyi…
Were dental prosthetic appliances and dentist-dispensed or prescribed medicines exempt from Texas sales and use tax?
Yes. Dental devices that remained in a patient's mouth to replace a missing or deficient part were exempt prosthetic appliances, and drugs or medicines dispensed by a dentist or on a dentist's oral or…
Could a seller accept a client's direct-payment certificate when taxable items were billed to the client's advertising agency?
No. The advertising agency had to pay tax on taxable items billed to it, even when acting for a direct-pay client. The seller could accept the client's certificate only if it billed the client directl…
Could an exempt organization buy an athletic-club membership tax-free for its members?
Yes, but only if the exempt organization paid the entire initiation fee and monthly dues and gave the club an exemption certificate. If the individual member paid, the membership remained taxable even…
Would the proposed standardized certificate qualify as a Texas resale certificate, an exemption certificate, or both?
It qualified as a resale certificate, but not as an exemption certificate because it lacked a space for the exemption reason. Adding a certificate-type checkbox and an exemption-reason field would mak…
Could a contractor buy natural gas tax-free while using it to test and balance HVAC units and keep pipes from freezing during construction of a public high school?
Yes. The gas was used in performing the construction contract, so the contractor could claim exemption if the high school was public. The utility exemption certificate had to identify the exempt schoo…
Could a nonprofit fundraising raffle buy a boat and trailer tax-free for use as prizes?
No. Sales tax was due when the boat was purchased, and motor-vehicle tax was due to the county on the trailer. The nonprofit could not use a resale certificate because it was raffling rather than rese…
Could a commercial nursery buy boards and nails tax-free to build plant tables needed for air circulation and disease prevention?
Yes under the 1990 ruling. The tables were equipment used exclusively to produce plants for sale, so their boards and nails could be bought with an exemption certificate. STAR warns that a 2011 law la…
Could a nursing-home lessee claim the residential-utility exemption and a refund when the utility account still named a former owner?
Not without establishing that it was the purchaser and operator. The utility could accept a future certificate after written confirmation, and earlier refunds required proof that the lessee operated t…
Could a nursing home claim the residential-use exemption and refunds for natural gas and electricity, and did city tax still apply?
Yes for qualifying billing periods beginning on or after January 1, 1988, if the facility clearly stated the exemption basis. State, county, and transit taxes were exempt, but this city's tax remained…
Could four nursing homes obtain sales-tax refunds on now-inactive natural gas and electricity accounts?
Yes for qualifying billing periods beginning on or after January 1, 1988, if they gave the utilities properly completed exemption certificates and written refund requests. State, county, and transit t…
Could farmers and ranchers buy parts and repairs tax-free for farm machinery, including highway-licensed vehicles or farm-tagged pickups?
Parts and repairs for machinery used exclusively in producing agricultural products for sale could be exempt. The exemption did not cover highway-licensed motor vehicles, including farm-tagged pickups…
Were nursing-home natural gas and electricity exempt, and could utilities accept certificates and refund tax for prior qualifying periods?
Yes for billing periods beginning on or after January 1, 1988. Nursing-home utilities were exempt from state, county, and transit taxes, while city tax could remain; utilities could accept completed c…
Could a direct-payment permit holder obtain a later refund if it did not give the supplier a direct-payment exemption certificate when buying taxable items?
No. The permit holder could choose to pay tax at purchase, but if it did not issue the certificate then, it could not later claim a refund of tax that was properly due and paid. The later certificate …
Could a seller exempt Fastrack sold as feed for farm and ranch animals when the product also had nonexempt uses?
Yes, with a purchaser exemption certificate stating the product was bought for farm or ranch animal feed. One blanket certificate per customer covered later qualifying purchases. STAR flags a registra…
When were wigs, toupees, hair pieces, replacement parts, and repair or maintenance services exempt from Texas sales tax as prosthetic devices?
They could be exempt when bought to replace hair missing from the body. Specifically designed replacement parts and repair or maintenance of a qualifying prosthetic hair piece were also exempt. Cleane…
Could preprinted farm-use language on a sales invoice replace a Texas exemption certificate, and what information did an invoice-based certificate need?
No. The proposed preprinted statement was insufficient. An invoice could serve as the certificate only if it contained the purchaser and seller names and addresses, item description, a purchaser-compl…
Could a purchaser use MTC Exhibit 1100-D in Texas for resale and manufacturing purchases, or did it need a Texas exemption certificate?
Texas accepted Exhibit 1100-D as a resale certificate for items bought for resale, lease, or rental, including manufacturing inputs that became component parts. It could not cover exemption-only purch…
Was the Xerox/Kruzweil Personal Reader exempt when sold, leased, or rented for use by legally blind or dyslexic individuals?
Yes. For a legally blind user, the text-to-speech reader qualified under Rule 3.284(c)(5) with an exemption certificate. For a person with dyslexia, it qualified as a therapeutic appliance when suppli…
Was the Xerox/Kurzweil text-to-speech Personal Reader exempt for a legally blind user, and could previously paid sales tax be refunded?
Yes. The portable optical scanner qualified under Rule 3.284(c)(5) when sold, leased, or rented for use by the legally blind. A properly completed exemption certificate was required, and presenting it…
Did a seller making only exempt natural-gas sales need a Texas sales-tax permit, and what certificate proof could suppliers require?
No permit was required solely to report exempt natural-gas sales, but the seller had to give a resale certificate when a supplier requested one. A certificate without a permit number could be accepted…
Could multiple gas suppliers rely on copies of one engineer-sealed predominant-use utility study, or did each exemption certificate need an original seal?
Copies were acceptable only when attached to a new original exemption certificate for the proper supplier and covering the same location and meter as the original study. A different meter needed its o…
Could a manufacturer obtain a sales-tax refund on an inactive electricity account after changing utility suppliers?
Yes, if the electricity qualified for exemption and the manufacturing operations had not changed. The manufacturer had to give the previous utility supplier properly completed exemption certificates a…
Were machinery disassembly, moving, reassembly, loading, unloading, in-plant moves, and export packing taxable?
Moving-related disassembly and reassembly were nontaxable when done only to relocate equipment and not to repair or reconfigure it. Loading, unloading, and in-facility moves were also nontaxable absen…
Could a customer's letter substitute for a properly completed Texas direct-payment exemption certificate?
No. The letter was unacceptable. The seller had to charge the customer tax on taxable items unless the customer issued a properly completed direct-payment exemption certificate in the form accepted un…
Browse Texas rulings by topic
These are official tax letter rulings and advisory opinions issued by Texas's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.