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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Texas Letter Ruling 9212L1211A13: Contact Lens Care Products
Prescription contact lenses are exempt from Texas sales tax and need no exemption certificate. Lens solutions and carrying cases are taxable, except that a disinfective solution sold as part of a soft…
Texas Letter Ruling 9212685L: Unjust Enrichment/Error Tax — Collected From Customer — Cannot Be Retained By Or Refunded To Retailer/Contractor — Must Be Remitted To State Or Refunded To Customers
If a lump-sum contractor marks a contract 'Inc' in the tax block, the Comptroller treats that as proof tax was collected from the customer, so the contractor cannot keep that money or use it to offset…
Texas Letter Ruling 9211L1211C11: Electronic Bulletin Boards Service — Access To Technical/Shareware Library And Ability To Leave/Retrieve Messages/Chat 'Live'/Trade Goods
Yes. The Texas Comptroller ruled that membership fees charged for access to a computer bulletin board service (BBS) -- letting users chat live, access databases, and download software -- are taxable a…
Texas Letter Ruling 9211L1211B11: Energy Management/Control System — Installed To Existing Heating And Air Conditioning Systems
Taxable. The Comptroller ruled that selling and installing a computerized energy management/control system as a replacement and upgrade to a supermarket's existing HVAC controls is remodeling of nonre…
State Tax Ruling
Yes. Texas allows a taxpayer to file sales tax returns based on a thirteen-period fiscal accounting calendar instead of the standard calendar month, but returns are still due the 20th, two of the fisc…
Were a trailer manufacturer's annual leases treated as rentals, and did Texas tax contracts for out-of-state use?
The annual leases were rentals because the owner was the trailers' manufacturer, regardless of contract length. Texas rental tax applied when the customer took possession in Texas, even if the trailer…
Texas Letter Ruling 9212L1208G14: Towing Charges — Second Tows Or Transfer Fees In Connection With Repossession Services And Separately Billed Are Part Of Debt Collection Services
It depends on who is towing. Plain towing charges are not taxable unless the towing company is also the repossessor, and towing hired directly by a financial institution to repossess a vehicle is not …
Texas Letter Ruling 9211L1209A08: Towing/Transport Charges — Part Of Debt Collection/Repossession Services
Yes, if the repossession company itself does the towing. A repossession company's towing charges are taxable as part of its taxable debt collection/repossession service to the financial institution, e…
Texas Letter Ruling 9211L1209A07: Are towing charges taxable when a vehicle is repossessed?
It depends on who hires the tow truck. If a repossession company hires a towing company to move a vehicle it just repossessed, the towing company's charge to the repossession company is not taxable, a…
Does a cable TV company owe Texas sales tax when it pre-wires a home for cable TV outlets?
It depends on the contract type: on a lump-sum contract the cable company owes tax on the cost of the wire itself and doesn't collect tax from the customer; on a separated contract the cable company m…
Texas Letter Ruling 9211L1209A14: Disposable/Nonreusable Items (Placemats, Plates, Cups, Tray Liners, Toothpicks) — Food Service Operators' Purchases Under Resale Or Exemption Certificate
Yes. A restaurant chain may issue a resale certificate to a supplier of paper placemats instead of paying tax, because Rule 3.293(f)(4) lets eating establishments buy nonreusable items furnished to cu…
Texas Letter Ruling 9211869L: Lowering Of Temperature/Flash Freezing Product During Processing Vs. Keeping Product At Targeted Temperature — Electricity Used
Exempt. Texas Comptroller Letter Ruling 9211869L holds that electricity used to lower the temperature of food products (like chilling avocados, chickens, and meat, or flash-freezing vegetables) down t…
Texas Letter Ruling 9211L1209G06: Homeowners/Property Owners Association — Taxable Services (Cable Television, Landscaping, Garbage/Trash Pick — Up) And Nontaxable Services Provided To Members — Billings
A Texas property owners association that buys taxable and nontaxable services (like cable TV) for its members and bills a lump-sum periodic fee is treated as the consumer, paying sales tax to its vend…
Texas Letter Ruling 9211L1205F09: How is the location of a cellular telephone call determined for city, county, and MTA (Metropolitan Transit Authority) tax purposes?
The location of a cellular call is set by the cell site that receives the incoming transmission. If that originating cell site can't be determined, local sales tax (city, county, and MTA) is instead b…
Texas Letter Ruling 9211L1205B03: Statute Of Limitations — Tax Refund On Federal Contracts — Federal Law Vs. State Law
This is an internal 1992 Comptroller staff memo, not a taxpayer ruling. It states the agency's position that Texas's own four-year statute of limitations governs sales and use tax refund claims from f…
Is the labor to repair a residential central air conditioner taxable in Texas, and what about the Freon used in the repair?
Only the charge for the Freon (refrigerant) itself is taxable. On a residential central air conditioning repair, the labor-related fees -- reclaimer fee, pump and torch fee, and leak detector fee -- a…
When a bookstore gives customers 'book credits' for traded-in books (minus a 10% handling charge), is tax due when the credit is used on a future purchase, or only at the original trade?
Tax is due on the full purchase price of the future book purchase, not reduced by the credit. A trade-in only avoids tax when the trade-in property is exchanged as consideration in the SAME sale under…
Texas Letter Ruling 9211L1204G13: Auctioneer — Sales Made On Behalf Of Federal Government
It depends on who is legally the seller. If a U.S. government agency consigns items to an auctioneer and the auctioneer collects payment and issues the bill of sale, the auctioneer is the seller and m…
Texas Letter Ruling 9211L1204G11: Is stainless steel polish bought by a janitorial service to clean customers' metal restroom dispensers exempt from tax under a resale certificate?
No. The Comptroller ruled that stainless steel polish bought by a janitorial company to clean customers' metal restroom dispensers is taxable at purchase, because the polish is consumed by rubbing and…
Is lawn mowing and landscaping work on a public highway right-of-way taxable when a private developer, not the government, pays for it?
It depends on who required the work, not who paid for it. Under Texas sales tax rule 3.356(a)(5), lawn maintenance and landscaping on land belonging to a governmental entity is exempt only if the gove…
Texas Letter Ruling 9211579L: Draperies/Curtains — Installation In New Houses/Residences Vs. Existing Houses/Residences
It depends on your role. Draperies are tangible personal property, so selling and installing them is normally taxable in full. But if an interior designer is acting as the contractor on a residential …
Texas Letter Ruling 9211L1205F07: Woodworking — Building Bird Houses And Feeders For Sale
Yes, you need a (free) Texas sales tax permit to sell bird houses and feeders, and you must collect state sales tax plus the applicable local rate based on where the sale is made. You can buy your mat…
Texas Letter Ruling 9211L1211C01: Does an on-line service that lets buyers and sellers trade consulting services, software, and information electronically owe Texas sales tax, and has it created nexus in Texas?
Yes to both. Attending Texas trade shows, conventions, and users group meetings gave the out-of-state on-line service nexus in Texas. Once nexus exists, the service must collect Texas sales tax on pre…
Texas Letter Ruling 9211L1206C09: Engineering Services — Designs/Blueprints/Specifications Preparations/Reports/Working Drawings — Nontaxable Services
No. A Texas Comptroller letter ruling holds that an engineering firm's study and report on bringing a building into compliance with building codes is a nontaxable consultation service, and including w…
Texas Letter Ruling 9211590L: Utility Study — New Study Required If Change Of Ownership
Yes. When a manufacturing business changes ownership, the new owner must have its own predominant use study performed and kept on file to claim the sales tax exemption on electricity purchases, even i…
Could Texas use the proposed account-credit procedure to refund vehicle tax after a manufacturer repurchased the vehicle?
No. Comptroller John Sharp said motor vehicle tax was paid to county tax assessor-collectors at title and registration, not remitted by the manufacturer or seller to a Comptroller taxpayer account. Wi…
Texas Letter Ruling 9211L1204G09: Out-of-State Client — Investigation Performed Out-of-State by Texas Firm
No Texas sales tax is due when a Texas-based private investigator conducts an investigation by phone from Texas for an out-of-state client and out-of-state subject, as long as the results are delivere…
Does placing print advertisements in Texas newspapers (including national inserts and free-standing inserts) create nexus requiring a mail order company to collect Texas sales tax?
No. The Comptroller ruled that placing one-page ads in Texas newspapers, in national publications distributed via Texas newspapers, in shared advertising booklets inserted in Texas newspapers, or as f…
Texas Letter Ruling 9211L1203A01: Thirteen Period Accounting Calendar Year
Yes. The Comptroller granted permission for a group of affiliated corporations to keep filing Texas sales tax returns based on their 13-period fiscal accounting calendar instead of standard calendar m…
Texas Letter Ruling 9211L1202G12: Layaway Sales — Tax Increase Or Tax Rate Change Before Customer Obtains Possession Of Tpp
The tax rate in effect when the layaway contract was executed applies to the whole layaway sale, even if a local tax rate increase takes effect before the customer pays off the balance and takes posse…
Texas Letter Ruling 9211L1202G11: Does a carpet installer collect sales tax on materials under a separated contract?
Yes. Under a separated contract for selling and installing carpet in a residence, the dealer is the seller of the incorporated materials, must give a resale certificate to its supplier, and must colle…
Does a Texas carpet dealer collect sales tax on materials only, or on the whole job, when installing carpet in a residence?
It depends on how the invoice is written. Under a separated contract (materials and labor billed separately), the dealer collects tax only on the stated materials charge and gives suppliers a resale c…
Texas Letter Ruling 9211563L: Does a company owe sales tax on temporary security guards hired to supplement its existing security force?
It depends on whether the guards are licensed security personnel or true temporary help. If the guards are licensed by the Board of Private Investigators and Private Security Agencies, the charge is a…
Texas Letter Ruling 9211L1199G12: Hotel — Trunk Lines Purchased For Own Use And For Resale To Guests — Resale Certificate Guidelines
No. A hotel that buys a trunk line for telecommunication service and resells part of that service to guests cannot give its telecom provider a resale certificate for the basic local exchange service. …
Does a Texas pallet manufacturer have to collect sales tax when transportation companies buy replacement pallets, even though the old pallets are returned to distributors?
Yes. The Texas Comptroller ruled that the pallet manufacturer must collect sales tax from the transportation companies buying the replacement pallets. The fact that the removed pallets may later be re…
Texas Letter Ruling 9210L1200F09: Caterer — Definition — Treated As Restaurant
Yes. The Comptroller ruled that a caterer is treated the same as a restaurant for Texas sales tax purposes, so it owes tax on tangible personal property it rents to put on catered events (tables, chai…
Texas Letter Ruling 9210L1200F03: Recycling Plant — Manufacturing Process Begins With Shredding — Also Machinery/Equipment Used
Yes. The Texas Comptroller ruled that a company shredding old tires into three-inch squares for eventual processing into rubber crumb (to be resold in products like mats and mud-flaps) is engaged in m…
Is renting out pedal boats, bumper boats, and aqua cycles on a waterway taxable as a rental of tangible personal property in Texas?
Yes. The Texas Comptroller ruled that renting bumper boats, pedal boats, and aqua cycles on public or private waterways is a taxable rental of tangible personal property, both before and after October…
Texas Letter Ruling 9210L1198D01: Caricature Artists/Cartoonists Charges For Drawings At Party/Parties
Yes. Caricature drawing is a sale of taxable tangible personal property (graphic art), so the artist must collect sales tax on the total charge. But if the artist is hired by an amusement-service prov…
Texas Letter Ruling 9210L1205A08: Storage Tank — Above Ground With 500 Barrels Less Or More Capacity — Tpp Vs. Improvement To Realty
Yes, taxable. Each tank in the battery held only 400 barrels, under the 500-barrel line that keeps a tank classified as tangible personal property in Texas. Because it stayed TPP rather than becoming …
Texas Letter Ruling 9210L1200G07: Navigation District — Loading Dock Facility Construction — Lump — Sum And Separated Contract Guidelines
It depends on the contract type. Building a loading dock for a navigation district (a political subdivision) is an improvement to realty. Under a lump-sum contract, the contractor pays tax on all inco…
Texas Letter Ruling 9210L1198A13: Jail/Prison — Inmates Staying In Facility In Excess Of 30 Days Do Not Meet Definition Of Tenants — Gas And Electricity Is Not Residential Use
No. The Texas Comptroller ruled that a prison is not a building 'occupied as a home or residence,' so natural gas and electricity purchased for use in a prison do not qualify for the residential-use s…
Texas Letter Ruling 9210L1197E07: Walls — New Exterior Wall Built Around Remodeled Building — No Usable Space Created — Is Remodeling
It depends on whether the new wall creates usable space. Following an ALJ hearings decision, the Comptroller revised its earlier guidance: pouring a new footer and adding a brick wall outside an exist…
Texas Letter Ruling 9210504L: Satellite Dish — Home/Residential Or Commercial Use — Sale And Installation Vs. Improvement To Realty
Generally no. The Comptroller ruled that satellite systems are tangible personal property, not permanent improvements to realty, so the full charge for both labor and materials to sell and install the…
Texas Letter Ruling 9210L1200G11: Medical Air Services — Membership/Initiation Fee For Emergency Medical Flights, Organ Delivery, Mortal Remains Return
No. The Texas Comptroller ruled that annual dues and a one-time initiation fee paid to a medical emergency association are not taxable, because membership in a medical emergency association is not an …
Texas Letter Ruling 9210L1197G12: Fair Exhibitors — Parking Passes Provided Together With Admission Fee
No, not automatically. If an exhibitor's admission pass includes complimentary parking with no separately identifiable parking charge, none of the admission price is taxable as motor vehicle parking. …
Texas Letter Ruling 9210L1204F12: Lock Or Locking Cylinder Exchange Service For Storage Facilities — Fee Charged
Yes. The Texas Comptroller ruled that a flat fee charged for organizing and coordinating the exchange of locking cylinders between storage facilities is the taxable sales price of the different lockin…
Texas Letter Ruling 9210L1209F06: Right — Of — Way/Other Infrastructure — Installation Or Repairs Of Tpp Or Improvements To Realty Must Be Dedicated And Accepted To Get Exemption
Yes. The Comptroller confirmed that the same rules used for developers donating streets to exempt entities also apply to donations of other types of real property improvements to exempt entities.
Texas Letter Ruling 9210L1199F14: Local Tax — City Ordinance — Enacting Tax On Telecommunications/Gas And Electricity — Whether Will Expire If City Changes Providers
No. The Comptroller's Tax Administration division concluded that a city's ordinances taxing telecommunications, gas, and electric services do not expire or stop applying if the city later switches to …
Texas Letter Ruling 9210L1204F03: Stock/Commodity Quotation Service — 'Real Time' Quotes And Bids
The company's real-time stock and commodity quote/bid service is a taxable information service under 34 TAC 3.342, so Texas sales tax applies. But its separate securities order-execution and trade-set…
Texas Letter Ruling 9210L1200F06: Representation/Nexus In Texas — Displaying Products And Providing Order Forms At University Bookstore By Oos Seller
Yes. The Comptroller advised that an out-of-state seller displaying its products and providing order forms at a Texas university bookstore is engaged in business in Texas because that display counts a…
Is plastic media blasting to strip paint before repainting real property taxable in Texas?
Yes, in most cases. The Comptroller treated plastic media blasting done to prepare real property for repainting as a taxable restoration or remodeling service under Rule 3.357. The provider must colle…
Texas Letter Ruling 9210L1201A05: Therabite Mobilizer For Jaw Motion Rehabilitation — Orthopedic Device
Yes. The Comptroller ruled that the Therabite Mobilizer, a device that stretches or moves the jaw joint for rehabilitation, qualifies as a tax-exempt orthopedic device under Rule 3.284(a)(9), based on…
Texas Letter Ruling 9210L1200A01: Exempt/Nonprofit Entity And For — Profit Organization Holding Event — Guidelines
Yes, admission tickets can stay exempt from Texas amusement tax even when a nonprofit hires a for-profit sports marketing firm to run the event, as long as the nonprofit is the one that holds itself o…
Does a Texas restaurant have to charge sales tax on meals it gives employees free or for a fee around their shift?
No. The Comptroller ruled that meals a food service operator furnishes to employees immediately before, during, or immediately after a shift, provided for the operator's convenience, are not subject t…
Texas Letter Ruling 9210483L: Delivery/Courier/Messenger Service Only
No. Texas ruled that a company's document delivery and filing services (fax, mail, courier, or hand delivery to recipients as instructed by clients) are not subject to Texas sales or use tax, no matte…
Texas Letter Ruling 9210L1197D11: Vessel — Component Parts — Fishing Net/Long — Line Fishing Gear — Component Of Fishing/Shrimp Boat
Long-line fishing gear, fishing nets and repair twine, stored life preservers, and rigging attached to the vessel are exempt as component parts when sold with a proper exemption certificate for a Texa…
Texas Letter Ruling 9209L1239D03: Tax Refund Check/Warrant — Is A Decision Of The Comptroller And Is Not Equivalent To 'Notice Of Determination'
No. The Texas Comptroller ruled that a refund check or warrant is simply a decision of the Comptroller, not a 'notice of determination' under Tax Code Section 111.104(c)(3). If no notice of determinat…
Texas Letter Ruling 9209L1195D07: Self — Insured Or Self — Funded Plans
No. The Texas Comptroller ruled that a self-funded employee benefit plan owes no sales tax on utilization review (cost-containment) services or on a third-party administrator's fund handling and distr…
Texas Letter Ruling 9209L1195D01: Financing Lease Vs. Operating Lease — Nominal Purchase Option And Fair Market Value
It depends on the purchase option. Texas doesn't require the end-of-lease purchase price to equal fair market value, but if a 10% deposit clearly exceeds the equipment's fair market value at lease-end…
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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.