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.
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Did a snack seller using unattended honor boxes have to hold a permit and collect Texas sales tax?
Yes. The seller was a vendor, and honor-box sales were treated like vending-machine sales: the full price was taxable and had to include the tax.
When could a new-construction contractor buy final cleanup or other services for resale?
A separated contractor could resell final cleanup, landscaping, and surveying, but not security, telecommunications, or daily cleanup. Lump-sum contractors could not use resale certificates.
Were membership dues, seminar fees, and publications taxable for a Texas membership organization?
Membership and seminar fees were not taxable, but the organization owed tax on free member publications and had to collect tax on copies sold to nonmembers.
How could State Fair concessionaires document tax-free purchases for resale when the fair collected their sales tax?
The fair could issue resale certificates on behalf of booth operators for whom it collected and remitted tax, identifying those operators to suppliers.
How did Texas tax telecommunications, local-network access, answering services, and free telephone directories?
Texas taxed qualifying in-state telecommunications and final-consumer access charges, while directory and answering-service treatment depended on the facts.
Could Texas sellers accept resale and exemption certificates sent by fax?
Yes. The internal memo said faxed certificates were acceptable if they were currently dated, valid, and properly completed.
Could a television repair business buy cable service tax-free for resale when it used the service during repairs?
No. Cable service was consumed by the repairer, while parts incorporated into customers' televisions or VCRs could be bought for resale.
How did Texas apply sales tax to paging service, long-distance inputs, switching equipment, and related charges?
Paging service was taxable, and integral long-distance calls could be bought for resale. Tax on messages and equipment depended on origin, destination, and installation facts.
Were stand-alone inspection and X-ray services on casing or drill pipe taxable, and what changed when they accompanied a repair?
Stand-alone inspection and X-ray charges were not taxable. With a repair they were taxable unless separately stated, and resale treatment was available before the pipe's resale.
Which tools and supplies could a surveyor buy for resale, and which were taxable to the surveyor?
Surveying equipment and consumed supplies were taxable to the surveyor. Markers transferred in a taxable survey could be bought for resale, with limited treatment for substitute markers.
When were fishing tools treated as taxable rentals rather than taxable well services, and could the tools be bought for resale?
Tools supplied alone or with a supervisor were rentals eligible for resale purchase; the supervisor charge joined the rental tax base. Tools supplied with an operator were taxable well services.
Did exchanging promotional 'West Texas Bucks' for auction items create taxable sales, and who owed tax on donated merchandise?
The exchange was not a sale because the promotional currency had no monetary value. Donating retailers owed tax on resale-certificate merchandise used in the promotion.
Could a private purchasing agent for NASA buy items tax-free, and what happened when the agent used the items itself?
Items transferred by title and possession to the federal government could be bought for resale. Items used by the private agent were taxable, because the agent was not exempt.
When could a seller accept resale certificates from janitorial suppliers or carpet cleaners, and which cleaning products qualified?
Resale treatment covered products transferred to customers, not consumed supplies. The seller needed good-faith acceptance without actual knowledge that the sale was not for resale.
When did a parent's equipment transfer to its wholly owned subsidiary become a taxable sale rather than a nontaxable capital contribution?
No tax applied without consideration, including added stock while ownership stayed at 100%. Assumed debt was consideration and made the transfer a taxable sale unless exempt.
What did good-faith acceptance of resale or exemption certificates require from a Texas retailer?
A properly completed certificate protected a seller without requiring an investigation, unless the seller actually knew the claim was invalid or the item could not be resold.
How did Texas tax advertising on free driving-guide maps, gift certificates accepted for ads, and later sales of the maps?
Advertising charges were not taxable, but the publisher paid tax on production. Gift certificates were taxed when redeemed for taxable items, and map sales were taxable.
How did Texas tax an advertising agency's outsourced audio masters, tape copies, shipping, print production, commissions, and agent purchases?
Client-specific master creation was not taxable, but tape copies and related Texas delivery were taxable. Agent status determined whether the agency paid suppliers or bought for resale.
How did Texas tax a provider's hotel calling-card service, purchased transmission time, customer billing, and installed equipment?
The provider could buy transmission for resale, while billing phone companies remitted customer tax. Provider-owned hotel equipment and other Texas property were taxable to the provider.
For a car wash, fuel, and quick-oil-change business in Texas, which charges are taxable and which are not?
For a combined car wash, fuel, and quick-oil-change business, the Comptroller said not to collect sales tax on car wash receipts, gasoline sales, or lump-sum quick-oil-change and wiper/belt/hose-repla…
Which tree-service, land-clearing, stump-grinding, demolition, and debris-hauling charges did Texas treat as taxable?
Texas treated most tree cutting, trimming, stump grinding, and stand-alone debris hauling as taxable, while land clearing for construction-site preparation, complete demolition-and-removal jobs, pastu…
Could a taxable landscaping provider buy the city's later removal of collected grass, trees, and organic debris tax-free for resale?
Yes. Because waste removal was included in the landscaper's taxable customer charge, the landscaper could give the city a resale certificate for the city's further debris removal.
Were charges for installing, assembling, repairing, refinishing, or moving a customer's tangible personal property taxable in Texas?
Standalone installation and moving without reassembly were not taxable, but assembly or erection and repair or refinishing were taxable. Related services became taxable when performed with the taxable…
Could a Texas taxable-service provider buy maintenance agreements, transferred items, natural gas, or electricity tax-free for resale?
Transferred goods and an integral taxable service could be bought for resale, but the provider's maintenance agreements, natural gas, and electricity were not exempt for use in providing taxable servi…
Which supplies could a Texas word-processing business buy tax-free for resale, and which items were taxable business-use purchases?
Paper, mailing labels, and report covers transferred to clients could be bought for resale. Printer ribbons, computer hardware, and software used by the business were taxable when purchased.
When were sales, installation, and repair of blinds, drapes, or shades taxable under Texas's 1988 rules?
Selling and installing them was taxable on residential or commercial property, as were sales alone and repairs. Installation was not taxable when the installer did not sell the items.
Did a law firm's separately stated reimbursement of taxable electronic legal-research costs create another taxable information-service sale to its client?
No. The database charge was the law firm's taxable expense. It could seek an equal, separately stated client reimbursement without additional tax and label the tax portion 'Sales Tax Reimbursement.'
When could sellers accept resale or agricultural-exemption certificates for horseshoeing supplies, horseshoes, halters, and bridles?
Resale stores could give resale certificates. Horseshoers generally paid tax on supplies used in lump-sum jobs, but could buy separately resold items for resale. Horseshoes, halters, and bridles quali…
Who collected and remitted Texas sales tax when a city bought commercial trash collection and billed its own customers?
The city did. After receiving additional contract facts, Texas treated the city as purchasing trash collection for resale. The city gave the contractor a resale certificate and was responsible for col…
Who collected Texas sales tax when a scholarship-matching business hired an out-of-state company to send matched information directly to students?
The scholarship-matching business collected tax from students because it made the sale. The out-of-state supplier merely drop-shipped the matched information on the seller's behalf and could accept a …
Were lump-sum balloon decorating, materials, labor, and delivered balloon arrangements taxable, and how did resale or prior tax payment work?
Yes. Total decorating and balloon-arrangement charges were taxable whether materials and labor were separated or not. Materials transferred to customers could be bought for resale; if tax was paid at …
Were full-coverage roof warranties taxable for nonresidential and residential property, and was repair work taxed during the warranty?
A warranty on a nonresidential roof was taxable, with no further tax on covered repair labor or materials when the warranty paid the total nonprorated repair cost. A residential roof warranty was nont…
How did Texas tax plant leasing and maintenance, proprietary consulting for television commercials, and wardrobe clothing rentals?
Plant rental and maintenance were taxable, while client-specific proprietary consulting was nontaxable. Wardrobe clothing leases were taxable; items known to be exclusively for lease could be bought f…
Did a newcomer welcome service collect Texas sales tax from sponsors for coupon distribution, gifts, and monthly reports?
Yes. The service collected tax from sponsors. A church or newspaper could give a reason-specific exemption certificate, the service could buy printing and gifts for resale, and separately billed coupo…
How did Texas distinguish taxable software sales and modifications from nontaxable programming, training, and computer consulting?
The letter taxed completed-program sales and seller-performed modifications, installation, and maintenance, while separately stated training and consultation were generally nontaxable. Modifying softw…
When were freight-collect charges taxable, and what historical state and local taxes did the Texas retailer have to collect?
Freight collect was nontaxable unless the retailer accounted for the transportation charge. The retailer otherwise had to collect applicable state and local taxes unless the customer supplied a resale…
Which manual and computer-based tax, payroll, accounting, reporting, and consulting services did Texas treat as taxable?
Manual tax returns, financial reports, manual consulting, and manual miscellaneous reports were nontaxable. Computer payroll became taxable January 1, 1988, and computer-prepared accounting records we…
Were commercial tree relocation, transplanting, post-transplant maintenance, and arboricultural consulting services taxable in Texas?
Yes. The letter treated all four described categories as taxable and made the total service charge subject to tax. It allowed specified materials transferred or incorporated into the work product to b…
Were termite-protection plans, prepaid pest-control services, and included structural repairs taxable in Texas?
Pest-control services became taxable October 1, 1987. Certain written contracts entered before July 21, 1987 could remain exempt for their remaining term, but renewals, modifications, and new contract…
How did Texas tax a private investigator's security-related work, mixed charges, photographs, expenses, and employee compensation?
Security-connected work and a single charge combining taxable and nontaxable services were fully taxable. Film, processing, fees, and client charges were taxable, with resale treatment if photos and n…
When did a Texas private investigative firm have to tax work performed inside or outside Texas, subcontracted services, expenses, and exempt-customer jobs?
Texas tax applied when investigations were conducted in Texas or for a Texas client, including wholly out-of-state work benefiting a Texas client. Work conducted outside Texas for an out-of-state clie…
How did Texas distinguish residential carpet installation, nonresidential carpet replacement, and carpet installed in new construction after January 1, 1988?
Residential installations and new construction remained under contractor Rule 3.291. Nonresidential carpet replacement became taxable remodeling on the total charge. A mixed remodeling/new-constructio…
Was an engineering scale model taxable when built from client specifications, and did the result change when the provider created the design after consultation?
Yes, a model made from client specifications was taxable on labor and materials. When the provider created the design after consultation, the client charge was a nontaxable professional service; the p…
How could a landscaper recover tax paid on inventory later transferred to customers, and could equipment used to provide landscaping services be bought for resale?
Tax paid on resale inventory could be refunded by the supplier after a resale certificate or credited on the sales-tax return for materials transferred to customers. Equipment used to perform services…
Did federal tax-exempt status make a homeowners association exempt from Texas sales tax, and how were landscaping charges treated when billed to members?
No. A homeowners association generally was not sales-tax exempt unless the Texas Comptroller granted that status. Separately billed landscaping required a permit, resale certificate, and tax collectio…
Could a Texas hospital-waste disposal service lease its incinerator tax-free for resale, and was its collection and disposal charge taxable?
No. The service provider used the incinerator and could not give its New Jersey lessor a resale certificate; it paid tax on leased equipment and supplies. Hospital waste collection and disposal was ta…
How did Texas sales tax apply to snapshots supplied while performing services for insurance companies, including the film and developing charges?
The provider's total charge to the insurance-company client for snapshots and services was taxable. The provider paid tax when buying film but could issue a resale certificate instead of paying tax on…
Was a flat monthly charge for testing residential pool water, adding chemicals, and cleaning taxable, and how were chemicals and service equipment purchased?
Yes. The entire charge for materials, labor, transportation, and incidentals was taxable whether lump-sum or separated. Chemicals transferred to customers could be bought for resale, while cylinders, …
Did a city have to collect Texas sales tax on garbage collection and a separate alley-maintenance fee when it contracted with a private collector?
Yes. The city had to tax garbage services beginning October 1, 1987 and also tax the alley-maintenance fee; it could give the collector a resale certificate.
Could a seller accept a hotel's resale certificate for linens when the permit number was invalid and hotels ordinarily used rather than re-rented linens?
No. The certificate lacked a valid Texas permit number, and the seller had to consider whether the hotel's ordinary business supported a good-faith claim that the linens were for resale.
Which janitorial supplies could be bought tax-free, and could a janitorial company issue resale certificates to taxable-service subcontractors?
Transferred supplies such as trash containers and floor wax could be bought tax-free; consumed cleaners could not. Taxable subcontracted services could be bought for resale.
Was the total charge for installing leased electrical capacitors on existing commercial systems subject to Texas sales tax?
Yes. The capacitors remained tangible personal property under the lease, so their sale and installation were taxable; the financing lease was treated as a sale with tax due at the time of sale.
Could a buyer's self-assessment letter or combined purchase-order certificate protect a supplier that did not collect Texas sales tax?
No. Without a properly completed resale or exemption certificate, the supplier remained exposed to tax, penalty, and interest; the buyer needed a direct payment permit to self-accrue tax.
Could a retailer treat an installed home satellite system as a lump-sum improvement to realty and avoid collecting Texas sales tax from the consumer?
No. Texas treated the satellite system as tangible personal property, so the retailer had to collect tax on the equipment and, after October 1, 1987, the installation charge.
How did Texas tax licensed security services and items used or transferred in providing them, and what later-law alert applies?
The 1987 letter taxed total security-service charges and distinguished consumed from transferred items; a 2019 alert removes consultants and guard-dog companies.
When could buyers of trash containers or compactors give a resale or exemption certificate instead of paying Texas sales tax?
A resale certificate applied when equipment was transferred in a taxable service or bought for resale, lease, or rental; municipal own-use purchases could be exempt.
How did Texas tax a lawn-care provider's total customer charge and its purchases of chemicals, fertilizer, plants, supplies, and equipment?
The total service charge was taxable. Chemicals, fertilizer, and plants transferred to customers could be bought for resale, while provider-purchased supplies and equipment were taxable.
Which City of Waco landfill, roll-off-container, and disposal-coupon charges were taxable under Texas's 1987 garbage-service rules?
Landfill admission was nontaxable, but roll-off collection and public-site disposal coupons were taxable; convenience stores could buy coupons for resale and then report tax on retail sales.
How did Texas tax landscaping and lawn-care charges and the fertilizer, chemicals, plants, supplies, and equipment used in the service?
Tax applied to the total service charge. Providers could buy chemicals, fertilizer, and plants for resale when transferred to customers, but owed tax on supplies and equipment not transferred.
How did Texas tax a portrait seller's purchase and resale of slides, photographic enlargements, and a painting?
The seller's pre-sale use of slides made film and processing taxable to her, while unused enlargements could be bought for resale; she collected tax on the full customer package price.
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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.