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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What eye-care supplies (lens cleaners, contact solutions, cases, chains/straps, spectacles) are exempt from Texas sales tax when dispensed by an optometrist or ophthalmologist?
Under Tex. Tax Code § 151.313(6), a range of corrective-lens-related supplies are exempt from Texas sales and use tax when sold or dispensed by an optometrist or ophthalmologist -- including complete …
Is a service that picks up and removes dead or dying cattle/livestock from a ranch taxable as a Texas 'waste removal service'?
No. The Comptroller ruled that a service that picks up and removes dead or dying livestock is not taxable as a waste removal service. The ruling is short and fact-specific, based only on the facts the…
When a company buys equipment under a resale certificate and leases it to a customer, is sales tax owed on the rental payments or on the outstanding balance when the equipment is returned to the vendor?
Tax is owed on the rental stream — either accrued on the rental payments or remitted as each payment is received — not on any outstanding balance owed to the vendor when the equipment is returned at l…
Can a motorcycle/ATV dealer accept a farmer's or rancher's sales-tax exemption certificate for an all-terrain vehicle without first getting Comptroller approval?
ALERT: as of 01/01/2012, H.B. 268 (82nd Legislature, 2011) requires anyone claiming this agricultural/timber sales-tax exemption to first obtain an ag/timber registration number from the Comptroller a…
Is the Kendall A-V Impulse System, a sequential compression device (SCD) that promotes blood circulation, exempt from Texas sales and use tax?
Yes. The Comptroller ruled that the Kendall A-V Impulse System, a sequential compression device that provides assisted circulation to ambulatory patients by creating pressure to force blood through th…
Can a newsletter publisher buy the envelopes it uses to mail newsletters to subscribers tax-free with a resale certificate?
No. The Comptroller ruled that mailing envelopes are taxable wrapping and packaging supplies under Tax Code Section 151.302(c), so the publisher must pay tax on them even though it can issue a resale …
Is a computer-generated wake-up call service sold to private duty nurses subject to Texas sales tax as a telecommunications service?
Yes. The Comptroller ruled that a service placing computer-generated, recorded wake-up calls to private duty nurses (who confirm receipt by pressing a key) is a taxable telecommunications service. The…
Can a cable television company claim the manufacturing exemption on the electricity it uses to produce and deliver its cable signal?
No. The Comptroller ruled that CATV providers cannot claim the Tax Code § 151.317 manufacturing exemption on electricity used to produce their signal, because cable television service is specifically …
Does a private dining and athletic club have to collect sales tax on dues and food charged to the federal or a state government?
No. The Comptroller ruled that a company providing private dining and athletic club services is not required to collect sales tax on membership dues, food, or services when a federal, federal-related,…
Does building a completely new parking lot or street, or enlarging an existing one, count as tax-favorable new construction rather than taxable repair?
It depends on what you actually do, not on the paving process used. Building a completely new street/parking lot, adding length or width to enlarge an existing one, or fully removing and replacing an …
Does selling an airplane back to the original leasing company and leasing it back under a financing lease or operating lease trigger Texas sales tax?
It depends on the type of lease and the facts. For a financing lease, if the corporation originally paid tax on the plane, the new lease is also a financing lease, and there is evidence the corporatio…
Are drafting charges from a third party taxable when building or remodeling a natural gas pipeline in Texas?
It depends on who creates the design. If a third party is simply handed schematic drawings and specifications and produces drafting work (drawings/blueprints) from them, that firm is a taxable 'drafts…
Does the manufacturing phase-in exemption cover a power shear and the mobile power unit that runs it at a metal recycling yard?
Yes, the shear itself qualifies for the manufacturing phase-in exemption, and the mobile power unit that powers it qualifies too, but only if the power unit is used predominantly to power the shear du…
How does a Texas roll-off box / solid waste collection company source local sales tax — where the box is placed, or where the office takes orders?
Local tax on a roll-off box/waste collection service is based on where the box is placed, not where the company takes the order. The Comptroller told this taxpayer to collect tax at the rate in effect…
Is on-site computer network administration (backups, file cleanup, running reports, data manipulation) taxable as a data processing service in Texas?
Partly yes. The Comptroller held that backing up files, cleaning up old files/messages, and using existing tools to produce reports or manipulate data are taxable data processing services under Tax Co…
Is the rental of a mobile office/office trailer subject to Texas sales tax, and is a separately stated property tax charge taxable?
Yes. Effective October 1, 1993, mobile offices are no longer classified as motor vehicles but as tangible personal property, so their sale, lease, or rental is subject to state and local sales/use tax…
Does a maid/housekeeping business have to collect Texas sales tax on residential cleaning services?
It depends on the working arrangement. The Comptroller explained that Texas exempts cleaning services performed by an individual employee who cleans the same home for wages, but if the business owner …
Is a new computer/drafting consulting company's revenue — drafting, technical graphics, consulting, hardware/software sales, and sub-contracted work — subject to Texas sales tax?
It depends on the service. The Comptroller ruled that drafting and CAD services (billed by customer specifications), technical graphics/charts/posters, and hardware/software sales are all taxable. Sta…
Does renewing or extending a fixed-term operating lease lock in the original tax rate, or does a new rate apply?
A new rate applies. The Comptroller ruled that while a fixed-term operating lease is taxed at the rate in effect when it was executed for its initial term, each renewal or extension is treated as a se…
Does a Texas company owe use tax when it transfers goods between its own divisions, including goods shipped from a Mexico City headquarters or from an out-of-state office?
Yes, generally. The Comptroller ruled that a Houston division owes Texas use tax, based on the original purchase price, when it receives goods (no money changing hands) from a company division in Mexi…
Is cutting or closing an opening in a fence to let trucks through a taxable real property service in Texas?
Yes, for a nonresidential fence. The Comptroller ruled that cutting an opening in a fence is taxable remodeling of an improvement to realty, and closing that opening back up is taxable repair, restora…
Can a customs broker with the purchaser's power of attorney collect a sales tax export refund on the purchaser's behalf?
Yes. The Comptroller ruled that a licensed customs broker may bring export documentation to a retailer and obtain a sales tax refund on the purchaser's behalf, as long as the broker holds the purchase…
Does a personal shopper have to collect Texas sales tax on commission and consulting fees charged to clients?
Yes, when the fees relate to a sale of clothes. The Comptroller ruled that a personal shopper who buys clothes for clients is a seller of that clothing, so commissions and consulting fees added to the…
Is prepared coffee sold by a non-restaurant for on-premises consumption taxable in Texas?
Yes. The Comptroller ruled that a charge for prepared coffee sold by a non-restaurant business for consumption on the seller's premises is taxable. This coffee answer is one item in a longer multi-top…
Does a Sequential Compression Device (SCD) qualify for exemption from Texas sales or use tax?
Yes. The Comptroller ruled that Sequential Compression Devices (SCD) qualify for exemption from sales or use tax, and that this exemption covers both the SCD sleeves and the machines themselves. The l…
Is the Berman Airway, a mouthpiece that keeps the mouth open and tongue down, exempt from Texas sales tax?
Yes. The Comptroller ruled that the Berman Airway, a mouthpiece that keeps the mouth open and the tongue down, is exempt from Texas sales tax when used to keep the airway open or to keep the mouth ope…
Can an aircraft previously purchased under the certificated carrier exemption be used as a tax-free trade-in toward a new aircraft that will not be used as a licensed carrier?
Yes. The Comptroller ruled that an aircraft purchased more than five years earlier under the certificated carrier exemption could still be used as a valid trade-in to reduce the sales tax owed on a se…
Are purchases made by federal employees using a Government Visa (I.M.P.A.C.) credit card exempt from Texas sales tax?
Yes. The Comptroller ruled that purchases made with the Government Visa I.M.P.A.C. credit card are exempt from Texas sales tax when cardholders are authorized only to make purchases for official gover…
Is renting carbon absorption units used to treat recovered ground water taxable, or is it a nontaxable remediation service?
It's a nontaxable service, not a taxable rental. The Comptroller ruled that although carbon absorption units are left on customers' premises to treat recovered ground water, the customers are not rent…
Is painting lettering on a store's windows a taxable service in Texas?
Yes. The Comptroller ruled that painting letters on a store's windows is taxable as nonresidential repair and remodeling of real property under Rule 3.357. The service provider must collect and remit …
Is a for-profit bookstore required to collect sales tax on Bibles and other scriptures published by a nonprofit religious organization?
No. Tax Code Section 151.312 exempts periodicals and writings published and distributed by a qualifying non-profit religious, charitable, historical, scientific, or similar organization. Because 'dist…
Are telephone cooperatives exempt from Texas sales tax on construction materials, and must their contractors pay tax on those materials?
It depends on how the cooperative was formed. Telephone cooperatives generally do not qualify as tax-exempt entities under Tax Code Sections 151.309 or 151.310, so contractors building new lines for t…
Does the Texas pollution control or manufacturing exemption apply to air quality monitoring systems (instruments, analyzers, computers, software) sold to manufacturers?
No. The Comptroller ruled that air quality monitoring systems sold to manufacturers — including the hardware, replacement parts, repair labor, and software programming and modifications — do not quali…
Does vibration monitoring equipment used by petroleum manufacturers and electric utilities qualify for the Texas manufacturing exemption?
No. The Comptroller ruled that vibration monitoring equipment used by manufacturers of petroleum products and by electric utilities using fossil fuel turbines does not qualify for the manufacturing ex…
Is a company that monitors horse races at racetracks with its own personnel and equipment performing a taxable equipment rental or a nontaxable service?
It's a nontaxable service, not a taxable equipment rental. The Comptroller ruled that a company providing race monitoring services to racetracks — using its own personnel and equipment (cameras, monit…
Could a seller-financing dealer apply a blended tax factor below the full rate to a vehicle down payment?
No. The full historical tax rate applied to the down payment because it did not include interest or other nontaxable charges. A tax-computation factor could be applied to scheduled payments that did i…
Can a manufacturer buy raw materials tax-free in Texas if the processed goods are sold to a foreign buyer rather than resold domestically?
Yes. The Comptroller ruled that a manufacturer buying raw materials (here, horse pericardia) to be processed and resold can use the Tax Code Section 151.318(a)(1) manufacturing exemption even though t…
When a company sells substantially all of its business assets to a single buyer, do cash, life insurance contracts, corporate books/records, and partnership interests have to be included for the sale to qualify as an exempt occasional sale?
No — the Comptroller ruled that selling the entire operating assets of a business in a single transaction to a single purchaser qualifies as an exempt occasional sale even if the seller keeps back its…
Is a document-shredding and destruction service taxable under Texas sales tax?
No — a document shredding/destruction service is not taxable under Texas sales tax when the essence of the transaction is destroying the documents, not hauling away trash. In this ruling, the shreddin…
Is a customer's exemption certificate valid if it claims Texas sales tax is illegal because U.S. currency isn't backed by gold or silver coin?
No. The Comptroller ruled this 'gold and silver coin' exemption certificate is invalid on its face, so the vendor could not accept it in good faith and must go back and collect the tax from the custom…
Does Texas sales tax apply to finance/interest charges if they aren't broken out separately from the item's price?
Yes, the tax was correctly assessed. Tex. Tax Code § 151.007(c)(4) excludes finance, carrying, service, and interest charges from taxable sales price, but only if they are separately identified to the…
If I bought my health club membership in Texas but moved out of state, do I still owe Texas sales tax on my dues?
Yes, as long as your membership contract is with the original Texas facility — Texas tax remains due on the dues even after you move away and start using an affiliated out-of-state club. To stop owing…
Does the Texas manufacturing exemption cover disinfectants and cleaning chemicals used by a food/meat processor?
It depends what the chemicals clean. Disinfectants and cleaning solutions used to sanitize product-contact surfaces of processing equipment qualify for the Texas manufacturing exemption because they a…
Is laser surveying used to determine blast burden on a rockface in a quarry or mine a taxable real property service in Texas?
No — the Comptroller ruled that laser surveying used only to determine burden on a rockface for planning explosive blasts is not taxable surveying. Under 34 Tex. Admin. Code Rule 3.356(a)(9), taxable …
Is plastic Visiqueen carpet protection, laid over rented trade-show carpet and later discarded, taxable to the rental company or purchasable tax-free for resale?
The Visiqueen plastic sheeting is considered sold to the customer as part of the carpet rental. Because of that, the rental company may purchase the Visiqueen tax-free from its suppliers by issuing a …
Does an escort referral service have to collect and pay Texas sales tax on its referral fees?
Yes — the Comptroller ruled that an escort referral service's fees are taxable. Escort services fall under Group 721, Major Group 72 of the Standard Industrial Classification Manual, which Tex. Tax Co…
Is sales tax due on tickets to a college football game when a for-profit promoter helps run the event and shares in the revenue?
No — the Comptroller ruled the ticket sales were not subject to sales tax. Because the universities' own students played in the game, the contract disclaimed any partnership or joint venture, and the …
If a pay-phone servicer charges one flat monthly fee that covers both coin collection and minor incidental repairs, is any part of that fee subject to Texas sales tax?
Yes, the repair portion is taxable. Cleaning, replacing parts, and clearing coin jams are taxable repair/maintenance services under Tex. Tax Code § 151.0101(a)(5). Separately stated charges for coin c…
Is a finance/interest charge excluded from Texas sales tax if it isn't broken out separately on the contract or invoice?
No — the tax was correctly assessed. Tex. Tax Code § 151.007(c)(4) excludes finance, carrying, and service charges (and interest) from the taxable sales price only if they are separately identified to…
Can a 501(c)(3) organization that runs a regular retail store still hold two tax-free sale days a year, and how must it document them?
Yes — a qualified 501(c)(3) organization may designate any two days a year as tax-free sale or auction days, even if it also holds a Texas sales tax permit and sells taxable items regularly through a …
Is 'moss rock' or rip-rap rock sold in its natural state for landscaping subject to Texas sales tax?
No — moss rock and rip-rap sold in the natural, unprocessed condition they are found in are not subject to Texas sales tax. The Comptroller has treated unprocessed sand, dirt, gravel, and rock as exem…
Does Texas sales tax apply to motor vehicle repairs or replacement vehicles paid for with insurance claim settlement money?
Yes for parts and for a replacement vehicle, no for labor. There is no special sales tax exemption for motor vehicle repairs or replacements paid via an insurance claim settlement or salvage title pro…
Is a coronary atherectomy catheter, used to excise and retrieve plaque from diseased arteries, taxable in Texas?
Yes — the coronary atherectomy system, a disposable catheter device used to excise and retrieve plaque from diseased coronary arteries, is taxable. The Comptroller pointed to Rule 3.284 (Drugs, Medici…
What does 'industrial solid waste' mean under Texas Rule 3.356?
Industrial solid waste, as used in Rule 3.356, means waste products resulting from the actual manufacturing process, such as sawdust from lumber mills or slag from a steel manufacturing process. It do…
Can a company that monitors house arrest units buy its telephone lines tax-free for resale, since the phone service is resold as part of its monitoring service?
No. Electronic monitoring of a person as a condition of probation, parole, mandatory supervision, or bail is a nontaxable service, so the company cannot issue a resale certificate for the telephone li…
Is labor to repair storm/water damage to a parking lot taxed as new construction or as taxable repair, and is contract labor for real property repair taxable?
Repairs made to this taxpayer's damaged parking lot before October 1, 1993 qualified as nontaxable 'new construction' labor. But that casualty-damage exemption was replaced by Tax Code Section 151.350…
Does a doctor's prescription to clean air ducts for allergy relief make the cleaning service exempt from Texas sales tax?
No — a doctor's written prescription recommending air duct cleaning to relieve allergic reactions does not exempt the service from Texas sales tax. The Comptroller ruled that air duct cleaning is a ta…
Is Texas sales tax due on printed book covers that a business buys and then donates to public schools?
No — buying taxable items (like printed book covers) that will be donated to a public school, with no use by the buyer, is exempt from Texas sales tax under Tex. Tax Code § 151.155(b), as long as an e…
If a utility company accepts a predominant-use energy study in good faith and issues an exemption, can the Comptroller still challenge that study on audit?
Yes. Under Rule 3.295(e)(3), neither the Comptroller's review nor the utility company's good-faith acceptance of an exemption certificate confirms that the underlying utility study is accurate. The st…
If a commercial landlord separately bills tenants for chilled and heated water (air conditioning and heating), does the landlord owe Texas sales tax as if selling utilities?
No — the Comptroller ruled that separately stated chilled/heated water (AC and heating) charges billed by a commercial landlord to its office tenants are not taxable. Because the landlord rents the re…
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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.