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 researching whether property taxes were paid and issuing a certificate to a title company a taxable information service?
Yes. The research-and-certificate charge was taxable as an information service. Separately stated courthouse copy and similar charges incurred during the research were nontaxable.
Were chimney sweeping and residential chimney-top, brick, and mortar replacement labor taxable in Texas?
Chimney sweeping was taxable. Labor to replace chimney tops, brick, and mortar on residential real property was nontaxable, and the contractor could pay tax to suppliers and quote the customer a tax-i…
Were natural gas and electricity used to prepare refrigerated or frozen catered food exempt from Texas sales tax?
No. Because the same entity prepared and sold the food through its restaurant or catering business, the natural gas and electricity did not qualify for exemption as of October 1, 1987.
Could a direct-payment permit holder claim credit for tax-paid inventory later removed for exclusive offshore mineral exploration or production?
Yes, if the items had no prior use and were used exclusively offshore outside Texas's territorial limits. Credit used the same rate originally accrued and paid, required purchase, removal, and tax rec…
Could a vending-machine operator include sales tax in the item price and back it out of total gross receipts?
Yes. Candy, gum, mints, soft drinks, and cigarettes were taxed on total gross receipts, but the operator could include tax in the sales price and back the tax out of gross receipts.
Were property-tax certificates prepared for title companies taxable information services, and could government-copy costs be excluded?
Yes. Gathering the taxes due or paid on a specific property for a title company was a taxable information service. The cost of copies obtained from a government agency could be excluded from the tax b…
Was a title-search report based on courthouse records taxable, and could separately stated government copy charges be excluded?
Yes. The December 31 letter superseded an October 20 nontaxable answer and treated the title-search report as a taxable information service. Separately stated governmental copy charges could be exclud…
Were Oklahoma data-processing services supplied to Texas financial institutions subject to Texas use tax beginning January 1, 1988?
Yes. After reviewing the servicing agreement and marketing brochure, Texas said the financial-institution data-processing services became taxable January 1, 1988. Because performance occurred in Oklah…
Were janitorial services taxable when a corporation provided them to a partnership in which the corporation was a principal or member?
Yes. Texas treated the corporation and partnership as separate and distinct entities and found no exemption for the taxable janitorial transaction between them.
Did an aircraft lessor's sale qualify as an occasional sale, and was additional tax due after rental taxes already exceeded purchase tax?
Yes, on the stated facts. The aircraft sale qualified as an occasional sale, and no additional tax was due because tax collected and paid on rental or lease charges exceeded the tax that would have ap…
How did Texas distinguish taxable software sales and modifications from nontaxable programming, training, and computer consulting?
The letter taxed completed-program sales and seller-performed modifications, installation, and maintenance, while separately stated training and consultation were generally nontaxable. Modifying softw…
Could subcontracts and material orders signed after July 21, 1987 qualify for Texas's prior-contract exemption when based on earlier bids?
Yes, if the bids were intended for a general contract entered before July 21, 1987 and that contract's final terms were substantially similar to the original bids. On those facts, later-signed subcont…
Were services performed under an industrial-discharge permit issued under Texas Water Code Chapter 26 taxable?
No. Based on the injection-well facts, the Comptroller confirmed that services performed under a permit issued under Texas Water Code Chapter 26 were not subject to sales tax under historical Rule 3.3…
How did Texas tax sales and moves of used houses, new foundations, customer-owned house moves, repairs, and subcontractor work before attachment to realty?
When the business owned and sold a used house, the house and moving charges were taxable, while foundation treatment depended on lump-sum or separated billing. Customer-owned house moving was nontaxab…
Did Texas's manufacturing-utility sales-tax exemption apply to propane, and what remedy was available for sales tax paid on propane purchases?
No. The letter said propane was subject to fuels tax rather than limited sales tax, while the manufacturing-utility exemption was limited to natural gas and electricity. Any sales tax paid on propane …
Did Texas base the October 1, 1987 transition for taxing insurance services on when the service was performed or when it was billed?
The service date controlled. Services performed before October 1, 1987 were not taxable even if billed on or after that date, while services performed on or after October 1 were taxable.
When did Texas treat an accountant's computer work as taxable data processing rather than nontaxable professional accounting?
Computer word processing, accounts-receivable billing, and payroll-check printing were taxable data processing. Financial reports, printed tax returns, and other work requiring accounting or tax exper…
Were transportation, delivery, and handling charges connected with taxable tangible personal property taxable when separately stated?
Yes. Transportation and delivery charges for tangible personal property sold, leased, or rented were taxable even when occurring after the transaction and separately stated. Handling charges tied to a…
Did Texas's tax policy committee view painting as maintenance under the proposed 1987 real-property repair and remodeling rule?
The committee's provisional view was that painting was not maintenance unless it was a regularly scheduled activity. The agency also said it would reexamine the entire proposed rule before adoption, s…
Were labor to assemble or reconfigure modular office furniture and charges for refurbishment, disassembly, repair, handling, and transportation taxable?
Yes. Assembly into a finished usable product and reassembly into a new configuration were taxable, whether the furniture was sold by the provider or customer-owned. Refurbishment charges, including di…
When were freight-collect charges taxable, and what historical state and local taxes did the Texas retailer have to collect?
Freight collect was nontaxable unless the retailer accounted for the transportation charge. The retailer otherwise had to collect applicable state and local taxes unless the customer supplied a resale…
How much of a vending machine's receipts was taxable when the operator could not determine the number of candy products sold from a machine containing candy and food?
Texas required tax on candy and soft-drink receipts. If the operator could not determine the number of candy products sold from a machine containing candy, tax was due on 100% of that machine's total …
Which manual and computer-based tax, payroll, accounting, reporting, and consulting services did Texas treat as taxable?
Manual tax returns, financial reports, manual consulting, and manual miscellaneous reports were nontaxable. Computer payroll became taxable January 1, 1988, and computer-prepared accounting records we…
Did a specially designed 60-by-100-foot building for processing, packing, and marketing an owner's vegetables qualify as exempt agricultural equipment?
No. Texas said the building did not qualify as agricultural equipment. The historical exemption required exclusive qualifying use and a design so mechanically specialized that the structure functioned…
Were hourly charges for landmen and lawyers to inspect private tract books taxable when customers read and copied the information themselves?
Yes. Texas treated the hourly access charge as a taxable information service even though the provider did not transmit, explain, or write down the information and the tract books were not public recor…
Did a lease stating a fixed rental payment 'plus sales and use tax' lose its Texas prior-contract exemption?
No. That wording did not defeat the exemption. Historical Rule 3.319(c)(4) instead disqualified contracts expressly making the customer responsible for tax-rate changes or increases, because the selle…
Was labor to originally install, repair, or service specified improvements to residential real property taxable under this 1987 Texas letter?
No. The letter said original installation labor for underground lawn sprinklers, storm windows and doors, siding, original painting, and roofing was nontaxable. Repair and service labor for those impr…
Did a community association correctly collect tax on residents' share of private garbage collection after a City of Houston reimbursement?
Yes. The association received a monthly city payment, billed residents for the remaining contractor cost, and correctly charged the historical 6% state, 1% city, and 1% MTA taxes on the amount billed …
How did Texas tax swimming-pool cleaning, maintenance, minor equipment work, and separately performed significant repairs under this December 1987 letter?
Pool cleaning and maintenance was taxable on the total bill beginning October 1, 1987, including minor equipment work performed as part of that service. Separately charged labor for significant repair…
How did Texas treat HVAC and ventilation repair labor and maintenance contracts for residential and commercial property, and when was tax reported?
Commercial-property repair labor became taxable January 1, 1988, while repair labor on a personal residence's central HVAC and ventilation system was nontaxable. Qualifying maintenance contracts were …
Were tree trimming and grass mowing along electric-power-line rights-of-way taxable in Texas?
No. The letter said trimming trees and mowing grass along electric-power-line rights-of-way were not taxable. It did not decide cutting, hauling, public-road, residential, or golf-course work despite …
Did an exemption from Texas's January 1, 1987 tax increase automatically cover the separate October 1, 1987 increase?
No. A customer needed a new exemption certificate for the October 1, 1987 increase. That exemption applied to qualifying bids and contracts entered on or before July 21, 1987 and lasted until the orig…
Were engineering inspections, investigations, research, analysis, and failure-cause work taxable when connected to an insurance policy?
Yes. Each listed engineering function was taxable when performed for an insurance carrier, its insured, its policyholders, or others if the work pertained to a policy issued by an insurance company.
Did a Texas installer have to charge sales tax on separately stated labor for installing doors, windows, and skirting on residents' mobile homes?
No. The Comptroller treated the installation as nontaxable residential repair and remodeling labor because it was performed for mobile-home residents and labor was separately stated. The materials cha…
When did Texas treat labor to repair installed wall-to-wall carpet as taxable for commercial and residential buildings?
The letter said on-site repair of carpet in commercial buildings would become taxable January 1, 1988, while on-site repair in residences would remain nontaxable. Repair labor performed at a repair pl…
Could a Texas collection agency buy delinquent accounts and collect them as its own accounts without providing a taxable debt-collection service?
A genuine purchase of a merchant's receivables was not unlawful and let the buyer collect its own accounts, but a merchant buyback obligation for uncollectible accounts would make the arrangement a ta…
Was a membership fee taxable when it included contracted insurance-claims processing for members, and who taxed discount-card purchases?
The monthly fee for Texas members became taxable October 1, 1987 because it included insurance-claims processing. Separate discount-card purchases were taxed by the participating vendors because membe…
Were a property-tax consultant's client-specific research, monitoring, appeal, and appraisal services taxable information services in Texas?
The letter treated information gathered or compiled for a particular client, proprietary to that client, and unavailable for sale to others as nontaxable. Information gathered and offered to the publi…
Were commercial tree relocation, transplanting, post-transplant maintenance, and arboricultural consulting services taxable in Texas?
Yes. The letter treated all four described categories as taxable and made the total service charge subject to tax. It allowed specified materials transferred or incorporated into the work product to b…
Was disposal of salt water and other waste resulting from oil-and-gas exploration, development, or production taxable in Texas?
No. The letter said disposal of waste materials resulting from oil-and-gas exploration, development, or production was exempt from sales tax under historical Rule 3.356(4)(B).
When did Texas treat oil-spill cleanup as taxable or nontaxable based on the spill's location and regulatory setting?
The letter treated well-site and qualifying oil-and-gas production cleanups as nontaxable. It treated in-plant or other land cleanup away from the well site as taxable when performed on property other…
Were charges for mowing acreage and vacant lots for commercial and private clients taxable in Texas?
Yes. The letter said mowing acreage and vacant lots for commercial and private clients became subject to sales tax on October 1, 1987.
Did Texas classify coffee, hot chocolate, and 100% pure juice as soft drinks, and gum and breath mints as candy?
Coffee, hot chocolate, and 100% pure juice were not classified as soft drinks. Gum and breath mints were classified as candy. The body does not state a tax rate or expressly decide the broader sports-…
Were freight charges taxable when a separately operated common-carrier subsidiary billed the construction-material customer directly?
No, under the described facts. The carrier was a separate legal entity operating independently, delivered for its parent and unrelated companies, and billed the customer directly and independently fro…
When did Texas treat computer-assisted work as taxable word processing or data processing rather than nontaxable professional accounting?
Computer word processing, accounts-receivable billing, and payroll-check printing were taxable data processing. Financial reports, printed tax returns, and other work requiring accounting or tax exper…
Were brokerage houses' receipts taxable as data processing when computers were used to give clients the status of their investments?
No, under the described facts. The brokerage houses provided investment services, and computers merely facilitated giving clients investment-status information. The letter applied proposed Rule 3.330(…
Did using a computer make financial statements and tax-return preparation taxable data processing, and which computer services were taxable?
No. Financial statements and printed tax returns requiring accounting and tax expertise were nontaxable professional services even when a computer was used. Word processing, payroll and business-accou…
Was an association's bundled in-home service fee taxable when employees helped elderly or disabled people with cleaning, yard work, cooking, grooming, medication, letters, and bills?
House cleaning and yard work were taxable real-property services, but the described overall in-home service fee was nontaxable if employees were not hired specifically for cleaning or yard work and no…
Were termite-protection plans, prepaid pest-control services, and included structural repairs taxable in Texas?
Pest-control services became taxable October 1, 1987. Certain written contracts entered before July 21, 1987 could remain exempt for their remaining term, but renewals, modifications, and new contract…
Were cemetery foundation fees taxable when a tombstone seller merely collected and passed them through without preparing the ground?
No, if separately stated in the contract or customer bill. The seller collected the cemeteries' fees as a customer service and remitted them to the cemetery, while separately collecting tax on the tom…
Did this Texas letter definitively decide whether attorneys and law-firm staff owed sales tax on debt collection or insurance-claim services?
No definitive tax result appears in the published text. The Comptroller's counsel said an enclosed Attorney General opinion on attorneys' tax-collection services would likely also apply to attorney in…
How did Texas tax a private investigator's security-related work, mixed charges, photographs, expenses, and employee compensation?
Security-connected work and a single charge combining taxable and nontaxable services were fully taxable. Film, processing, fees, and client charges were taxable, with resale treatment if photos and n…
Did a city owe tax on garbage pickup, its 10% late-payment penalty, and a debt-collection company's services?
The city had to collect tax on garbage pickup beginning October 1, 1987. A true 10% late-payment penalty—not loss of an early-payment discount—was nontaxable, while the outside debt-collection service…
Were client-specific financial-planning and investment-advisory information services taxable in Texas?
The letter treated the adviser's client-specific financial-planning information as nontaxable because it was gathered or compiled for a particular client, proprietary to that client, and not available…
How did Texas tax a business that manufactured and installed septic tanks, wastewater treatment plants, and culvert pipe as improvements to real property?
The business was a real-property contractor, not a manufacturer eligible for manufacturing exemptions. On lump-sum contracts it paid tax on incorporated materials; on separated contracts it could buy …
How did Texas tax labor for residential carpet, wall-covering, flooring, and drapery work, and when were installed draperies treated as improvements to realty?
Labor for the listed residential carpet, wall-covering, and flooring work was not taxable, including rental housing. Drapery labor was taxable unless the draperies met one of three stated improvement-…
How did Texas tax alarm-system sales, leases, installation, maintenance, and monitoring, and was fire-alarm monitoring treated as a security service?
Alarm-system sales or leases, installation, and maintenance were taxable, as was Texas-location monitoring generally. Fire-alarm monitoring was not taxable under the security-services rule because fir…
When did a Texas private investigative firm have to tax work performed inside or outside Texas, subcontracted services, expenses, and exempt-customer jobs?
Texas tax applied when investigations were conducted in Texas or for a Texas client, including wholly out-of-state work benefiting a Texas client. Work conducted outside Texas for an out-of-state clie…
How did Texas distinguish residential carpet installation, nonresidential carpet replacement, and carpet installed in new construction after January 1, 1988?
Residential installations and new construction remained under contractor Rule 3.291. Nonresidential carpet replacement became taxable remodeling on the total charge. A mixed remodeling/new-constructio…
Were cargo condition and damage surveys taxable in Texas when performed for importers, exporters, cargo underwriters, and other principals?
Condition surveys were not taxable. An insurance-related damage survey was taxable on its total charge when the examined property was in Texas and the customer did business in Texas; otherwise the cus…
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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.