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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Which pulling-unit, pressure-testing, hot-oil, and equipment-cleaning services were taxable?
Pulling-unit work to remove or install pumps, rods, or tubing was taxable with mileage and per diem. Ordinary pressure testing and heating crude to remove sale-blocking impurities were not taxable; ho…
Was Gulf Salt Dome Ceiling Fluid exempt from sales and use tax when it met the Tax Code definition of diesel fuel?
Yes, if the product qualified as diesel under Tax Code Section 153.001(4). It still had to be accounted for on the distributor's monthly diesel-fuel tax report.
How were hydrostatic testing, repair, fabrication, leasing, and delivery of compressed-gas semi-trailers taxed?
The described testing and non-remodeling work were not taxable because the trailers were motor vehicles. Fabrication components could be bought for resale; motor-vehicle tax arose at registration for …
Was a customer charge for use of a skin-tanning booth taxable?
No under the facts presented. The 1985 letter stated simply that the charge for a tanning booth was not taxable.
Was $1 paid for a token redeemable for food or drink taxable as an amusement admission, and when was food tax collected?
The $1 token charge was not an admission because the token functioned like a gift certificate. Sales tax was collected when the token was redeemed for food or drink.
Were rental charges for safe-deposit boxes affixed to building walls or floors taxable?
No under the stated facts. The Comptroller said the box-rental charges were not taxable and suggested refunding tax previously collected from customers and applying for a refund. The response did not …
When were scuba excursions, crewed boat charters, and lump-sum diving travel packages taxable?
A standalone scuba excursion was a taxable amusement, while a crewed boat charter used only for transportation was not taxable. A lump-sum travel package dominated by nontaxable travel services was no…
How did Texas tax hole-digging equipment mounted on a conventional truck versus a specialized half-cab chassis?
Design controlled. A conventional truck with an attached hole digger was taxed as a motor vehicle, while a half-cab specialized unit was taxable equipment. Repair tax treatment also differed.
When did a physician-prescribed Texas health-club membership qualify for a sales-tax exemption?
Health-club fees were exempt when supported by a licensed practitioner's written prescription to treat a specific malady. Each membership renewal needed a new or extended prescription to remain exempt…
Were grease-trap services, standalone consultations, and silver reclamation from printer waste taxable?
Grease-trap pumping, modifications, and installation were not taxable when the concrete traps were permanently embedded in the earth. A separately stated consultation without a tangible-property sale …
Did equipment added to a pre-October 2, 1984 Texas master lease preserve the occasional-sale exemption?
Yes, if Texas tax had been paid on the equipment. The old master lease remained one exempt transaction, but post-October 2, 1984 additions were taxable to the extent they increased the lease price.
Can a restaurant avoid Texas sales tax by labeling a required meal price as a charitable contribution?
No. A required set payment for a taxable item is a sale, not a charitable contribution. Restaurant meals sold for stated amounts were taxable even though menus and checks labeled the prices as contrib…
Was pumping hot oil down a Texas well bore to remove paraffin or another obstruction taxable?
Yes. Pumping hot oil down a well bore to dissolve paraffin or remove another obstruction was taxable maintenance because the tubing was tangible personal property.
Which purchases by a Texas electric cooperative qualified for its sales-tax exemption?
The cooperative's meter-shop towel laundry service was exempt because it related to the cooperative's purpose. Kitchen towel laundry and cable service were not exempt on the facts given.
How did Texas tax a lump-sum office coffee service and the supplies used to provide it?
The lump-sum charge to the customer was not taxable. The provider had to pay its supplier tax on the machine, cups, napkins, filters, and stir sticks; coffee, cream, and sugar were exempt.
Did Texas classify parking gates, ticket dispensers, and card readers fixed to cement islands as real-property improvements?
Yes. Parking gates, ticket dispensers, and parking-card readers affixed to cement islands qualified as improvements to real property on the facts presented.
Which aircraft sales, rentals, repairs, charters, instruction, and support services were taxable in Texas?
Aircraft sales to individuals, rentals, parts, and supplies were taxable. Repairs, charters, pilot services, flight instruction, hangaring, preheating, and washing were not taxable.
Were the advertised services of a Texas skin-care clinic taxable, or was the clinic treated as a massage parlor?
No. None of the clinic's advertised services were taxable under state sales tax, and the business was not primarily engaged in massage, so massage-parlor law did not apply.
Could a Texas subsidiary use its parent corporation's direct-payment permit for its own purchases?
No. Each subsidiary that wanted to buy without paying tax to the seller and then accrue and remit the tax itself had to obtain its own direct-payment permit.
Were lump-sum convention tour packages taxable in Texas, and what if amusement tickets dominated the charge?
A lump-sum entertainment and tour package was not taxable. But if the customer charge mainly consisted of amusement-ticket costs, the full amount was taxable as an amusement admission.
Did direct Medicare or Medicaid reimbursement make a medical-equipment sale or rental a tax-exempt federal sale?
No. The transaction was a sale or rental to the patient, not the federal government, regardless of billing or reimbursement. It was taxable unless the equipment qualified for a medical exemption.
Were customer charges for using passive exercise equipment at a Texas salon taxable?
Yes. A salon charging customers to use passive exercise equipment was providing a taxable service. From October 2, 1984, charges were subject to 4.125% state tax plus applicable location tax.
Was cleaning the inside of a Texas well bore with hot oil taxable, and did the letter decide franchise-tax filing?
The hot-oil well-bore cleaning service was taxable. The letter did not decide whether the New Mexico corporation owed a Texas franchise-tax report; that answer was deferred to separate correspondence.
Were tanning-salon booth fees taxable under Texas's October 2, 1984 sales-tax changes?
No. The Comptroller said tanning-salon fees were not taxable under the sales-tax changes effective October 2, 1984.
Was electricity used to operate pipeline telemetering devices exempt from Texas sales tax?
No. The electricity was taxable because the telemetering devices transmitted pipeline data but did not actually transport gas through the pipelines.
How did Texas tax steam cleaning, repairs, and air-filter cleaning for motor vehicles versus off-highway equipment?
Cleaning and repairing off-highway equipment was taxable, while the same services on motor vehicles were not. Parts, soap, billing method, and mixed-use air filters had separate tax treatment.
Which gun-club membership fees, contest entry fees, reloading supplies, and club supplies were taxable in Texas?
Annual membership fees were taxable. Qualifying contest entry fees were not taxable as amusements; reloading supplies bought for resale could use a resale certificate, while club-use targets and suppl…
Was labor to cut a customer's glass or replace glass in a frame taxable in Texas after October 2, 1984?
Yes. Cutting customer-owned glass to shorten it or make shelves was taxable remodeling, and replacing glass in a frame was a taxable repair with the total charge subject to tax.
Were repairs to built-in heating, cooling, and plumbing equipment taxable in Texas after October 2, 1984?
Generally no for equipment wired or plumbed into the realty, such as central heating and air-conditioning units. Repairs to plug-in property, such as a window unit, and associated trip or mileage fees…
Which pre-October 2, 1984 Texas parking contracts qualified for the prior-contract sales-tax exemption?
A definite parking contract executed by October 1, 1984 could qualify without advance notice, but only for its fixed term and never beyond September 30, 1987. Later options and renegotiations could be…
Could a federal credit union claim Texas sales-tax exemption on parking, storage, repairs, and construction projects?
Yes. The federal credit union could issue exemption certificates for its own qualifying purchases, including parking when users were not charged, storage, repairs, and construction work.
Could each division of a Texas corporation file its own sales and use tax return?
No. All of the seller's permits used the same taxpayer number with different outlet numbers, so one consolidated return showing each outlet's data was required every reporting period.
When did Texas treat drapery installation as an improvement to realty, and which related labor charges were taxable?
Draperies usually remained tangible personal property, but became realty improvements when permanently integrated or installed by a contractor in a construction project. Reworking drapes and blinds wa…
Was a charge to cut lumber for a customer taxable in Texas after October 2, 1984?
Yes. The Comptroller said a charge to cut lumber or other tangible personal property was taxable, whether the customer brought it in or it was cut before the sale.
Did a Texas hotel have to collect sales tax on laundry and dry-cleaning services sold to guests?
Yes. The hotel had to collect tax from guests for laundry and dry-cleaning services, but it could give an outside vendor a resale certificate instead of paying tax to that vendor.
Were color and wardrobe consultations, seminars, and shopping services taxable in Texas?
No. Consultation, seminar, and shopping services were nontaxable, but the service provider had to pay tax to suppliers on scarves, makeup, and other tangible items used to provide them.
Which Texas waterbed moving, assembly, repair, service-call, and delivery charges were taxable?
Water-mattress repairs were taxable. Moving systems, assembly or disassembly without a bed sale, ordinary service calls without taxable labor, and contract deliveries were not taxable.
Did inheriting a Texas business create successor liability for the deceased owner's state sales tax?
Not under the stated conditions. The heir avoided successor liability if no purchase price was paid to the estate and the heir did not assume estate debts or liabilities as a condition of inheritance.
How did Texas tax monument builders that installed headstones or vaults compared with sellers that provided no installation?
An installer was a contractor that paid tax on incorporated items and did not charge tax to the customer as tax. A monument seller providing no installation had to tax the full charge and hold a sales…
Which oilfield roustabout labor charges did Texas classify as taxable or nontaxable in 1984?
The result depended on the work. Installation and several cleanup tasks were nontaxable, tank-battery painting and injection-line repair were taxable, and materials used on nontaxable labor remained t…
Did a secured lender owe Texas sales or use tax after repossessing equipment and buying it back at an unsuccessful auction?
No. Sales tax did not apply when the property owner bought back its own equipment at auction, and no use tax was due on later business use if the original purchaser had paid the tax.
When were Texas tournament entry fees nontaxable, and were spectator admissions taxable?
Participant fees were nontaxable when they met the letter's contest-cost or contest-only facility tests. Spectator admissions were taxable, and integral items for taxable tournaments could be bought f…
Did clothing-alteration services become taxable in Texas on October 2, 1984?
Yes. The Comptroller classified clothing alterations with laundry, cleaning, and garment services in industry Group 721 and said they became taxable October 2, 1984.
Were home-computer game cartridges, custom software, and significantly modified canned software taxable in Texas?
Canned software, including computer-game cartridges, was taxable. Custom software and canned software that was significantly modified were not taxable.
Could a Texas restaurant buy charcoal used in food preparation without paying sales tax?
Yes. Charcoal consumed in preparing food for sale was an exempt necessary and essential processing material, and a qualifying restaurant could give the seller an exemption certificate.
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, …
Did a Texas county have to collect tax on golf-course green fees and golf-cart sales or rentals?
The county did not collect tax on green fees because county-provided amusements were specifically exempt from amusement tax. Its sales or rentals of taxable items such as golf carts were taxable.
Did Texas sales-tax law changes make horse-boarding and stable services taxable?
No. The Comptroller said the sales-tax changes did not impose tax on boarding stables and that boarding a horse remained a nontaxable service.
Which purchases could federal realty-improvement contractors make tax-free in Texas after October 2, 1984?
Contractors owed tax on machinery, equipment, and consumable supplies used on the federal project, but could buy property tax-free when it would become part of federal realty after incorporation.
Were charges for trucking uranium ore taxable when the carrier did not sell the uranium?
No. Transportation charges for moving uranium were nontaxable when the company provided trucking only; the letter said the result changed if the company also sold the uranium.
Which advertising, admission, program, and novelty-item sales by the requesting organization were taxable in Texas?
Advertising space in newsletters, programs, and other publications was nontaxable, as were circus and shrine-dance admissions. Sales of programs and novelty items were taxable; bingo revenue was left …
Could a Texas school buy award jackets tax-free either to present to students or to resell to them?
Yes. A school could use an exemption certificate for jackets presented to students. For jackets sold to students, it used a resale certificate and had to collect and remit tax on the student sales.
Could a Texas school district buy athletic jackets tax-free either as student awards or for resale to students?
Yes. Award jackets could be bought with an exemption certificate. Jackets bought for sale to students required a resale certificate, followed by collection and remittance of tax on the student sale.
How did Texas apply an October 2, 1984 tax-rate increase to change orders and undelivered work under older contracts?
Owner-requested upgrades or specification changes made the entire change order subject to the added 1/8% tax. Supplier price increases or availability substitutions did not, and original undelivered w…
Was an equipment lease between related Texas corporations taxable when no cash changed hands?
The lease was taxable to the extent lease payments or receipts were recorded in the corporations' books. If no cash or book transfer existed, there was no consideration and no sales tax was due becaus…
Which residential appliance repair services did Texas classify as taxable or nontaxable?
Repairs to central air, built-in dishwashers, disposals, built-in ranges and microwaves, ceiling and attic fans, and built-in compactors were nontaxable. Repairs to portable or freestanding appliances…
Were membership dues for a home-service equipment library taxable in Texas?
No. The club's membership dues and described equipment-checkout arrangement were nontaxable, but the club had to pay sales tax when purchasing every item used in the business.
How did Texas's Comptroller distinguish taxable contractor purchases from tax-free materials on federal contracts?
Contractors had to pay tax on machinery, equipment, and supplies used to perform federal contracts. Materials and supplies that became part of the federal project could be purchased tax-free, under th…
Do materials that become part of a Texas newspaper lose their sales-tax exemption when the newspaper is distributed free?
No. The letter said giving newspapers away did not void the exemption for tangible personal property that becomes an ingredient or component part of a newspaper.
Did retailers selling tangible personal property on a Texas military base have to collect state, city, and MTA sales tax?
Yes, on the facts presented. Based on the city's statement that the base was within its limits, the Comptroller said retailers on the base should collect state, city, and MTA tax.
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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.