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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Were tenant credit and rental-history reports taxable when used for Fannie Mae properties?
Yes, unless bought directly for the federal entity or by a manager acting under an agency agreement; government-backed financing alone was insufficient.
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.
Were fax charges by lawyers, architects, and other professionals taxable?
Not when part of an exempt professional-service transaction; standalone commercial fax service remained taxable telecommunications service.
Did a fireworks retailer need a separate Texas sales-tax permit for every stand?
No. One permit covered all stands, but a copy had to be displayed at each location; wholesalers also needed a permit.
Was collecting accounts receivable bought without recourse a taxable debt-collection service?
No. A true nonrecourse purchase made the receivables the buyer's own accounts, but the seller was treated as paid for sales-tax purposes.
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.
Did a free advertising publication owe tax on its in-house work and purchased production services?
Its own employees' work created no sales-tax liability, but purchased printing and other production services were taxable.
Which local sales-tax rate applied when a Fort Worth florist delivered or wired flowers elsewhere?
The florist used its 7.5% Fort Worth rate for both direct Arlington deliveries and wired orders, including orders sent outside Texas.
When was buying and collecting delinquent loans nontaxable rather than a taxable debt-collection service?
The buyer had to give consideration for a true sale and the lender could not be required to repurchase uncollectible accounts.
Were nipple-up and nipple-down services on blowout preventers taxable?
It depended on the overall job. Completion and formation-production work was nontaxable; work tied to a taxable oilfield service was taxable.
Was a sale of oil leases and the basic production equipment then in use subject to Texas sales tax?
No. Texas treated the leases and in-use basic production equipment as an interest in real property, so no part of the sale was taxable.
How did Texas tax public fax transmissions, receive fees, dedicated lines, and mixed-use memberships in 1989?
Fax charges were taxable telecom services under the stated sourcing rules; dedicated lines and paper could be bought for resale, with business use taxed.
Were the described check-service activities taxable in Texas?
No. Based on the submitted description and purchase agreement, Texas concluded that the client's check services were not taxable.
Was a scoreboard transferred to a school for ten years of advertising rights a taxable donation or a sale?
It was a sale because advertising rights were consideration; the sale was exempt only if the recipient itself qualified as exempt.
How did Texas distinguish new-construction and remodeling tax for signs attached to buildings or pylons?
Signs added before occupancy or on new pylons were new construction; replacements and additions to occupied buildings were taxable remodeling.
Was sales tax due on a municipal franchise fee itemized on cable-television and telephone bills?
Yes. The fee was the provider's business expense and remained part of the taxable sales price when passed through to customers.
Which industrial design, drafting, and computer-file conversion services were taxable?
Professional engineering design was nontaxable, but manual or computerized drafting and computer-file conversion were taxable.
Did rebuilding previously occupied mall space from bare floors and walls count as nontaxable new construction?
No. Because the work replaced or rebuilt parts of previously occupied space, Texas treated it as taxable remodeling.
Was a separately stated computer-usage charge taxable when the computer supported a professional consulting study?
No, if identified as reimbursement for computer time used in the professional service; a standalone reformatted-data report was taxable.
Did Texas's agricultural exemption cover a satellite dish, CRT equipment, and agricultural market-data service?
No. The equipment was taxable tangible property and the futures and live-market data was a taxable information service.
Was a separately stated insurance premium covering replacement of lost, stolen, or destroyed leased cellular phones taxable?
No. The premium was forwarded to an insurer, covered replacement rather than repair, and was optional for lessees with other coverage.
Did affiliated corporations have to file a consolidated federal return to keep Texas's intercorporate-service exemption?
No. The group had to qualify for consolidated filing under federal law, but choosing not to file that way did not forfeit the exemption.
Which vehicle sales, adaptive equipment, repairs, and remodeling for an orthopedically handicapped person were exempt?
Qualifying modified motor vehicles and adaptive equipment were exempt, as was necessary accommodation labor; ordinary parts and aesthetic work were taxable.
Did Texas's agricultural exemption cover rodent-control equipment or poison?
Equipment and traps were taxable; poison could qualify only when a farmer used it to protect an agricultural product held for sale.
How did Texas tax fire-protection systems installed in new, residential, and existing nonresidential buildings?
New-construction labor was nontaxable, residential repair labor was nontaxable, and the total charge for existing nonresidential remodeling was taxable.
Were charges for workers' compensation claim files and required health-care guidelines taxable?
No. The 1989 letter exempted both categories as governmental records or required Open Records Act publications.
Were charges to tear down and bury PCB-contaminated property taxable in Texas?
No. Based on the Texas Water Commission's 1989 characterization of PCBs as hazardous waste, the disposal charges were nontaxable.
How did Texas divide a guest ranch's packaged and separately stated charges between hotel and sales tax?
Lump-sum room packages bore hotel tax, while separately stated rides, meals, amusement, concerts, and equipment generally bore sales tax.
Which tubes, tips, equipment, racks, bottles, labels, and sample inputs used to make culture media were exempt?
Single-use tubes, tips, and aspirators plus sale packaging qualified; reusable racks, most equipment, and sample containers did not.
Was a consumer's deductible payment for an automobile warranty repair taxable?
No. The internal memo treated the warranty deductible like an insurance-repair deductible and concluded that tax was not due.
Were charges to copy and deliver hospital medical records taxable in Texas?
No. Both copying and separately billed delivery were nontaxable, but the provider owed tax on taxable items used to perform the service.
Which cleaning chemicals and supplies used in cattle slaughtering and meat processing were exempt?
Direct-contact denaturant, soap, qualifying hide treatment, and by-product-equipment degreaser were exempt; general cleaning and worker-clothing supplies were taxable.
When were charges for temporary technical personnel nontaxable staffing rather than taxable identifiable services?
The agreement had to supply temporary employees, bill by employee-hour rather than job completion, and let the customer replace unsatisfactory workers.
Did a corporate group lose Texas's intercorporate-service exemption by choosing not to file a consolidated federal return?
No. Eligibility to report on a consolidated federal return was enough; the group's decision not to use that method did not destroy the exemption.
Which state, city, county, and transit taxes applied to a Texas City investigation firm's assignments in 1989?
The firm collected state and Texas City tax plus applicable customer-area use tax, subject to the historical 8% cap and drop-off order.
When did Texas's temporary-storage exclusion protect equipment held or assembled in Texas for out-of-state use?
Out-of-state purchases could qualify if temporarily stored and used solely outside Texas; in-state purchases and Texas manufacturing use were taxable.
Were hourly aircraft-use charges by nonprofit flying clubs taxable, and were owner reimbursements taxed?
Club-member use was a taxable rental; the club's hourly reimbursement to aircraft owners was a tax-free rental for rerental.
Were subscription background-music services transmitted by radio frequency taxable telecommunications services?
No. The Comptroller found no legislative support for treating subscription music like telephone, telegraph, paging, or similar communications.
Did maintenance of legally required environmental or energy-conservation equipment have to be essential to manufacturing to qualify for the Section 151.338 exemption?
No. The equipment did not have to be essential to manufacturing; Section 151.338 covered maintenance and related services required by law to protect the environment or conserve energy.
Were periodontal testing fees and the contents of dental test kits taxable?
The testing fee was nontaxable, but the kit's treatment was unresolved because its contents were unspecified; the provider owed tax on taxable inputs.
Did a customer claiming 100% exempt electricity use need a utility study and engineer certification?
No. A specific exemption certificate was enough for exclusive exempt use; studies and engineer certification applied to predominant-use claims.
Was the Texas Animal Health Commission's $6.25 charge for a book of 25 blank veterinary inspection certificates subject to sales tax?
No. The Comptroller determined that the required $6.25 certificate-book fee was not subject to sales tax.
Was electricity used in separately metered apartment-style patient housing at a drug-rehabilitation or psychiatric center exempt residential use?
No. Texas treated the electricity as taxable commercial use because the 60-day patient housing was not occupied as a home or residence.
Were Comfort Ease, Neuroaid, Respond II, Comfort Wave, and similar therapeutic devices exempt from Texas sales tax?
Only in a prescription sale to an individual. The products qualified as therapeutic devices, but nonprescription sales and sales to medical practitioners or health-service organizations were taxable.
Was a gas-compression agreement a taxable equipment rental or a nontaxable compression service when the provider operated and controlled the compressor?
It was a nontaxable compression service. Although the equipment was substantial, the customer had no control over it and the provider handled installation, operation, repair, and starting and stopping…
Did HMOs' gross-premium tax and franchise-tax exemption also exempt their separate management company from franchise tax or sales tax on taxable services?
No. The management company was a separate taxable corporation, and premium-taxed funds did not exempt it or its HMO clients from sales tax on taxable services.
On what amount did a direct-sales company collect Texas sales tax when it sold through independent consultants and charged shipping?
On the documented retail sales price, including shipping. For the facts reviewed, the company collected tax on $20 because that stated retail price included the 50-cent shipping charge.
Was installing furniture that was not permanently attached to a building a real-property construction contract, and how were mixed contracts classified?
No. Installing furniture that was not permanently affixed was not an improvement to real property; for mixed contracts, the contract had to be viewed as a whole, and incidental real-property work did …
Was a separately stated municipal franchise fee part of the taxable sales price of electricity?
Yes, when the electricity was taxable. The fee was the utility's cost of doing business and remained part of the sales price even when billed separately.
How could a Texas seller document an export when transportation was delayed and the goods had not left the country before an audit?
Use a freight forwarder or customshouse broker. Its receipt could show the goods were being held for export during an audit, followed by the bill of lading or broker certification after shipment.
Could the Comptroller waive a nonprofit mail-order seller's prior Texas tax liability when it volunteered to register and collect tax prospectively?
No. The Comptroller said it had no authority to waive the tax itself, although it would waive penalties and interest; the organization should obtain a use-tax permit and collect tax if doing business …
Were art appraisals taxable when performed for insurance purposes, and did the result change for sale, authenticity, or market-value appraisals?
Insurance-related appraisals were taxable insurance services. Appraisals performed only for a sale, authenticity check, or market-value decision were not taxable.
Which parts of a shopping-mall project were new construction, and how should shared HVAC and mechanical-installation labor be allocated?
New exterior entrances adding footage were new construction; replacement space and storefront expansion within existing floor area were remodeling. Shared equipment labor was allocated by the new cons…
Did an elevator company have to calculate the taxable repair portion of each maintenance contract separately?
No. Revising an earlier contract-by-contract approach, the Comptroller allowed one taxable percentage for all Texas maintenance contracts.
How did Texas tax repair or remodeling of nonresidential and residential real property under the corrected guidance?
Nonresidential repair or remodeling was taxed on the total charge. For residential work, lump-sum contractors paid tax on materials, while separated contracts taxed the materials charge.
Could an elevator maintenance company use one historical taxable-repair percentage for all of its Texas maintenance contracts?
Yes. For simpler recordkeeping, the company could establish one verifiable taxable percentage and apply it across its Texas elevator maintenance contracts.
When did the referenced Texas policy change for sand, gravel, and similar unprocessed materials take effect, and was it retroactive?
The memo gave June 13, 1988 as the effective date and said the policy decision was not retroactive. It did not explain the policy's substantive tax rule.
Were services to clean and treat ventilation systems for soot, mold, or mildew taxable in Texas?
Yes. The Comptroller classified ventilation and duct cleaning as taxable real-property cleaning services under Rule 3.356.
How were pager rentals, repairs, damage waivers, and lost-equipment charges taxed when connected with paging service?
Rented pagers and repairs followed the paging-service tax rate; outright purchases and repairs took the full tangible-property sales-tax rate. Damage waivers were taxable, but lost-equipment replaceme…
Was computer-assisted geophysical data analysis a taxable data-processing service or a nontaxable scientific-analysis service?
Scientific analysis and interpretation were not taxable merely because a computer was used. Mere data input, manipulation, and report production were taxable data processing, and rented computer time …
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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.