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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Was a magazine with mostly free one-year subscriptions a controlled-circulation publication, and what Texas tax applied?
No. The paid subscriptions showed the magazine was published for subscription sale; paid subscriptions were not taxable, but the publisher owed tax on free copies mailed to Texas subscribers.
Was flexlight used as a printing plate exempt from Texas sales tax when a printer manufactured products for sale?
Yes. It was necessary and essential to manufacturing and was neither machinery nor equipment under Rule 3.300(a), so the six-month useful-life test did not apply.
Did Texas exempt labor to repair real-property pollution-control equipment, and what refund applied to replacement wastewater piping?
No exemption applied to real-property repair labor. Pipe bought in 1990 or 1991 qualified for a 25% state-tax refund, but removal and replacement labor did not if the system was an improvement to real…
Did an aircraft modified and used for aerial photography qualify for Texas's manufacturing-equipment exemption?
No. The Comptroller treated the aircraft as support equipment because it was not used directly to manufacture a photograph.
Did an aircraft used in a Texas aerial-photography business qualify as manufacturing equipment?
No. Although necessary and essential to producing aerial photographs, the aircraft was not used directly in manufacturing them.
Were single-use drums and containers used for exempt hazardous-waste disposal exempt from Texas sales tax?
No. The disposal service was exempt, but the provider consumed the drums after manufacturing ended, so the containers remained taxable and did not qualify as pollution-control manufacturing materials.
Were amine and the products used to clean recycled amine exempt in a Texas natural-gas processing plant?
Amine was exempt because it directly purified gas held for sale, but filter elements, carbon, and defoamers used only to clean the amine were taxable.
Were plastic bowls used in automated blood-plasma collection units exempt from Texas sales and use tax?
Yes. The bowls replaced blood bags that the Tax Division had already exempted and served the same exempt function.
Was remote mainframe emulation and software-testing time taxable data processing, and could the software developer claim resale or manufacturing treatment?
The time-sharing and testing service was taxable data processing. But the developer could issue a resale certificate if the service was essential to software sold as tangible property, or a manufactur…
Which restaurant equipment qualified for Texas's 1990 processing-equipment refund?
Restaurants were processors eligible to request a refund of 25% of state sales tax paid on qualifying equipment bought on or after January 1, 1990. Fryers, ovens, mixers, broilers, and stoves qualifie…
Did forklifts used inside a plant to move raw materials to mixing tanks qualify for Texas's phased-in manufacturing exemption?
No. Moving raw material to mixing tanks was intraplant transportation in preparation for manufacturing, which Tax Code § 151.318(c)(2) and (4) specifically excluded from the exemption.
Were platemaking chemicals necessary and essential to printing exempt under the manufacturing rule applied in this 1989 correction?
Yes. The Comptroller corrected an earlier letter and found the platemaking chemicals exempt under § 151.318(a)(2) and Rule 3.300(d)(3)(A), with a refund available. STAR warns that later 1997 and 1999 …
Was armored-car security for transporting precious-metal by-product bars to a refinery exempt as a service making a manufactured product more marketable?
No. The security service did not make the bars more marketable, so the manufacturing-service exemption in § 151.318(a)(3) did not apply and the provider could not accept an exemption certificate.
How did Texas tax industrial gases, propane, sterilizing or cleaning gases, breathing-air refills, and cylinders when the buyer supplied only limited use facts?
The result depended on use. Gases consumed in manufacturing or protecting the product or environment could be exempt, while repair, sterilizing-water, and tank-cleaning uses were taxable. Propane was …
Did the manufacturing exemption apply to janitorial work at a meat-packing plant when collected scraps and fat later entered the rendering process?
No. The service cleaned the plant's walls and floors, not the product being manufactured. Picking up scraps remained part of taxable janitorial work even though the plant later rendered and sold them …
Did keeping production rooms at Class 100 or better air quality make the janitorial service exempt as necessary to manufacturing?
No. Cleaning rooms where production occurred was taxable because the janitorial service was performed on the physical facility, not directly on the manufactured product. Rule 3.300 supplied no exempti…
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…
Can a provider of taxable amusement services buy the gas and electricity it uses tax-free in Texas?
No. Utilities used to provide taxable amusement services are themselves taxable — the Legislature chose not to exempt utilities used to provide amusement services, and gave no utility exemption to any…
Which dirt, sand, gravel, and limestone products are taxable in Texas, and does washing, sizing, crushing, or mixing make a difference?
Materials sold in their natural state are not taxable, and neither is the transportation charge — this covers sand, fill dirt, and top soil dug from the earth, gravel that has only been washed and scr…
Did soluble oil, hydraulic oil, and Cyclean filter paper used to manufacture aluminum cans qualify for Texas's manufacturing exemption?
The soluble oil used in cup-forming and can-stretching and the hydraulic oil used in the bodymaker press qualified under Rule 3.300(d)(3). Cyclean filter paper used to refurbish and reuse washed-off o…
Which restaurant electricity uses qualified for exemption in 1987, and when did energy for immediate-consumption food become taxable?
Only production-equipment electricity qualified after August 3, 1987; energy used to prepare food for immediate consumption became taxable October 1, 1987.
Could a floppy-disc manufacturer buy lapping film tax-free when it used the film to polish magnetic sheets and remove debris before sale?
Yes. The Comptroller found the lapping film necessary and essential to manufacturing marketable floppy discs, so it could be purchased tax-free with an exemption certificate.
Were paint brushes exempt as property necessary and essential to manufacturing?
No. Although the brushes otherwise met the necessary-and-essential manufacturing test, the law specifically excluded hand tools, and Rule 3.300(a)(6) included paint brushes in that definition.
Could a business obtain an electricity-tax refund when the utility account remained in the prior owner's name?
Yes, with the prior owner's written assignment for open periods, plus a valid study showing more than 50% qualifying manufacturing electricity use.
What certificates and export records could a Mexican twin plant use for materials bought from Texas vendors?
Component materials and qualifying manufacturing items could use an exemption certificate; the plant's own equipment and supplies needed proof of export.
Were single-use Quick Cups consumed in mandatory metal-casting quality control exempt from Texas sales tax?
Yes. The cups qualified because they were used and consumed in the manufacturing process, and the manufacturer could give its supplier an exemption certificate.
Could a building manager exempt electricity reimbursed by a portrait-studio tenant?
Not on the stated facts. The manager was recovering a building expense, not selling electricity, and could exempt the master-meter purchase only if more than 50% of all measured electricity was used i…
Was bulk material used to make short-lived prototype patterns exempt from Texas sales tax?
No. The bulk material was taxable because the prototype patterns were not directly used in manufacturing and did not qualify for exemption, even though an accurate prototype led to creation of a perma…
When was electricity used to customize vehicles exempt as manufacturing electricity in Texas?
Electricity used to customize vehicles for the manufacturer qualified as direct manufacturing use, but each meter needed more than 50% qualifying use supported by a study. Electricity for remodeling, …
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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.