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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What certifications and records did Texas require for post-August 3, 1987 electricity studies supporting a sales-tax exemption or refund?
The study had to be certified by a registered engineer or qualified engineering graduate, including kilowatts, duty factors, and computations. The exemption package needed original signatures or seal,…
Which Texas surveying services were taxable, which were not, and how did the Comptroller treat a well-location job containing both kinds of work?
Boundary- and property-location work was taxable, while listed control, topographic, tree, pipeline-centerline, and lot-staking work was not. For well jobs, lease-boundary work was taxable but locatin…
How did Texas define residential property, repair, remodeling, and new construction for the January 1, 1988 tax on real-property repair and remodeling?
Repairmen and remodelers generally collected tax on the total sales price, while residential-only work and new construction were treated differently. A new parking lot and added square footage were ne…
When was subcontracted drapery fabrication labor taxable, and how did Texas treat materials and installation when draperies were or were not improvements to realty?
For draperies treated as realty, fabrication alone by an unrelated subcontractor was taxable, but fabrication plus installation was not. Materials were taxed to the seller on lump-sum billing or to th…
Did a Texas contractor have to switch from specific identification to the aggregate method for reporting equipment use, and how could it change methods later?
No. Continuing to use specific identification after the earlier rule change counted as the contractor's election. A later switch to the aggregate method required notice to the Comptroller at least 45 …
Was an annual fee taxable when clients received monthly economic-research reports, telephone answers, and personal presentations from a shared database?
Yes. The Comptroller treated the economic-trends material as a taxable information service because the same general database supported information sold to each client. One fee bundled the reports with…
Which fees earned by a commercial mortgage banker and servicer were taxable, including origination, brokerage, servicing, late, and prepayment fees?
Loan and equity origination, brokerage, late, and prepayment fees were not taxable. Servicing was taxable only when it was taxable debt collection; collecting current mortgage payments and paying real…
Were medical records and reports taxable information services when supplied as part of healthcare or to workers' compensation insurance carriers?
No. The Comptroller's counsel confirmed that providing medical records and reports was not a taxable information service either as part of healthcare services or when supplied to workers' compensation…
Which expedited filing, document retrieval, UCC search, and public-record services were taxable, and could government record fees be excluded?
Expedited filing of client-prepared papers was nontaxable, but retrieving public documents, UCC searches, and obtaining and summarizing public lien or judgment information were taxable. Separately sta…
Did Texas require a new utility predominant-use study every year, and when did operational or equipment changes require a replacement study?
No annual study was required. But a business with taxable and exempt utility use on one meter had to prove predominant exempt use, using 12 consecutive months for continual manufacturing or processing…
Was an engineering scale model taxable when built from client specifications, and did the result change when the provider created the design after consultation?
Yes, a model made from client specifications was taxable on labor and materials. When the provider created the design after consultation, the client charge was a nontaxable professional service; the p…
Did Texas tax the total monthly charge for a commodity-market service supplying continuous quotations, news, weather, and customer monitoring equipment?
Yes. Effective October 1, 1987, the service was taxable as an information service and the provider had to collect tax on the total customer charge, replacing the attached March 1987 telecommunications…
How did Texas apply sales tax to independent claims-adjusting services for self-insureds, attorney work, percentage-based fees, and insurance-company pools?
Services for self-insureds were not taxable, while a fee calculated from premiums remained taxable. Attorney-connected work and the taxpayer's insurance-pool arrangement were not finally decided becau…
Could a city buy contracted garbage collection for resale without tax, and did it have to tax the amounts billed to residents and businesses?
Yes. The city could issue a resale certificate to the collector, but it had to collect tax on garbage-service charges billed to its customers.
Were charges for analyzing, trapping, and removing wild animals taxable in Texas, and what about labor to repair the resulting property damage?
Yes. The Comptroller treated varmint analysis, trapping, and removal as taxable real-property services even without a Structural Pest Control Board license. Repair labor on improvements to realty was …
How could a landscaper recover tax paid on inventory later transferred to customers, and could equipment used to provide landscaping services be bought for resale?
Tax paid on resale inventory could be refunded by the supplier after a resale certificate or credited on the sales-tax return for materials transferred to customers. Equipment used to perform services…
Was freight on a special-order item taxable when a supplier drop-shipped the item to the seller's customer?
It depended on who paid the carrier. Freight billed to the seller and rebilled to the customer was taxable, even on a drop shipment; freight paid directly by the customer to the carrier, never enterin…
How did Texas tax frac-tank cleaning, oilfield waste hauling, drilling-mud transportation and pumping, and trucking-only charges?
Frac-tank cleaning was taxable equipment maintenance, while oil-and-gas waste collection and disposal and trucking-only service were exempt. Mud transportation was taxable if the provider did not pump…
Did a private retail club have to collect Texas sales tax on its $5 annual membership fee when the club existed to sell gasoline to members?
No. The gasoline retail club did not provide entertainment, recreation, sports, dining, or social facilities, so it was outside Rule 3.298's taxable private-club membership category.
Were separately stated delivery charges on taxable equipment sales and mileage charges incidental to equipment repair taxable in Texas?
Yes. Effective October 1, 1987, delivery charges tied to taxable property were taxable regardless of separate billing, carrier, postage, or F.O.B. terms. Rule 3.292(c)(1) also taxed the entire repair …
When was a debt-collection service taxable in Texas, what charge was taxed, and when did an agency report the tax?
The total service charge was taxable when the debtor had a Texas address and the underlying seller was in or doing business in Texas. The agency collected tax from its client; accrual filers reported …
Could a service provider accept an exemption certificate from a federal credit union, and were loss or damage appraisals for insurers taxable when the property was credit-union financed?
A federal credit union was exempt when buying taxable items or services for its own use, and the seller could accept an exemption certificate. But loss or damage appraisals performed for insurance com…
Did federal tax-exempt status make a homeowners association exempt from Texas sales tax, and how were landscaping charges treated when billed to members?
No. A homeowners association generally was not sales-tax exempt unless the Texas Comptroller granted that status. Separately billed landscaping required a permit, resale certificate, and tax collectio…
Was commercial and residential window cleaning taxable in Texas, and how did the Comptroller apply state and city tax to the service?
Yes. The window-cleaning service was taxable. Because the provider's city had no city sales tax, it collected the historical 6% state tax; a customer in a city with a 1% city tax also owed city use ta…
When did a pre-July 21, 1987 trash-collection contract qualify for the prior-contract exemption, and did automatic renewal preserve the exemption?
A pre-July 21, 1987 contract could qualify if it fixed the price, service level, and period. On-request work did not qualify, a 30-day arrangement did not qualify, and exercising an automatic renewal …
Did Anderson County's new half-percent sales tax apply to electricity used by commercial and residential customers?
The county tax followed the state sales-tax treatment: commercial electricity was taxable unless the account qualified for and claimed a state exemption, while residential electricity use was not taxa…
How did Texas tax pagers or beepers rented with telecommunications service compared with equipment sold or rented without service?
A pager rented with telecommunications service used the same tax rate as the service. A beeper or pager sold outright or rented without service was treated as an ordinary sale or rental of tangible pe…
Could a Texas hospital-waste disposal service lease its incinerator tax-free for resale, and was its collection and disposal charge taxable?
No. The service provider used the incinerator and could not give its New Jersey lessor a resale certificate; it paid tax on leased equipment and supplies. Hospital waste collection and disposal was ta…
How did Texas sales tax apply to snapshots supplied while performing services for insurance companies, including the film and developing charges?
The provider's total charge to the insurance-company client for snapshots and services was taxable. The provider paid tax when buying film but could issue a resale certificate instead of paying tax on…
Were an attorney's judgment-collection and other debt-collection charges taxable while Texas awaited an Attorney General opinion on attorney services?
Collecting a judgment was not debt collection when the attorney represented the client in the suit that produced it. The letter gave no final rule for other attorney charges and said the Comptroller w…
Which municipal and commercial garbage-collection contracts qualified for Texas's prior-contract exemption, and did renewals or on-request pickups qualify?
The two fixed-term city contracts qualified only through their stated end dates, and renewals did not. A commercial contract needed a pre-July 21, 1987 date, fixed price, specific service level, and f…
Could stamped invoices from a private bridge security service prove that duty-free merchandise was exported for the Texas sales-tax export exemption?
No. Section 151.307(b) allowed proof only through specified carrier bills of lading, licensed U.S. customs-broker documentation, destination-country import documents, or qualifying freight-forwarder d…
When did Texas exempt a subscription to a quarterly poetry journal from sales tax, and who collected tax when the exemption did not apply?
A magazine subscription was exempt only if sold for a semiannual or longer period and entered as second-class mail. The letter does not say whether the poetry journal met both conditions. When a magaz…
Was a flat monthly charge for testing residential pool water, adding chemicals, and cleaning taxable, and how were chemicals and service equipment purchased?
Yes. The entire charge for materials, labor, transportation, and incidentals was taxable whether lump-sum or separated. Chemicals transferred to customers could be bought for resale, while cylinders, …
How did Texas allocate the forfeited value of unused credit reports between taxable Texas reports and nontaxable out-of-state reports?
The Comptroller approved multiplying the unused or forfeited contract amount by the ratio of Texas reports actually ordered to total reports actually ordered. That percentage determined the taxable sh…
Was job-site electricity exempt when used directly to power tools and welding equipment on wastewater-treatment projects for exempt customers?
Yes. Electricity used directly in construction for the listed exempt customers was exempt when the contractor gave the utility a certificate identifying the entity and project.
Were services helping employers install and administer qualified retirement plans subject to Texas sales tax?
No. Based on the stated facts, including that the firm did not provide specialized news or current-information bulletins, Texas found the service nontaxable.
Was tax due on pre-October 1987 advance payments for later trash service, and when did a small quarterly filer report and pay the tax?
Tax applied to later service unless a written customer contract predated July 21, 1987. Quarterly returns were due the following month's 20th day.
Were premium-audit services taxable when an independent firm reviewed policyholder records so an insurer could calculate final property or casualty premiums?
Yes. Reviewing policyholder financial records and reporting the premium basis was taxable insurance service because Rule 3.355 covered insurance inspections and analysis connected with calculating pre…
When were Texas real-estate appraisals taxable for loans, property sales, tax purposes, insurance coverage, or insurance claims?
Loan, sale, and tax appraisals were not taxable. Insurance appraisals were taxable, except lender-required appraisals primarily obtained for financing.
When a customer pays partly with food stamps and partly with cash, how should the food stamps be applied for Texas sales-tax purposes?
Apply the food stamps first to taxable eligible items. Collect sales tax on taxable items remaining in the portion paid with cash.
Were appraisals of art, antiques, furnishings, and personal property taxable when done for general value or for insurance purposes?
General value appraisals were not taxable, but appraisals for insurance loss, damage, or coverage valuation were taxable insurance services.
Were off-duty security services performed by full-time peace officers taxable, and did the answer change when a security company employed them?
Direct services by full-time peace officers were not taxable, but their time was taxable when included in a security company's charges.
Did a city have to collect Texas sales tax on garbage collection and a separate alley-maintenance fee when it contracted with a private collector?
Yes. The city had to tax garbage services beginning October 1, 1987 and also tax the alley-maintenance fee; it could give the collector a resale certificate.
When did Texas begin taxing real-property surveying, and did written contracts signed before July 21, 1987 qualify for a prior-contract exemption?
Real-property surveying became taxable October 1, 1987. Written contracts made before July 21, 1987 qualified for the prior-contract exemption.
Could a credit-reporting provider buy monthly microfiche credit information for resale, and were its credit-reporting charges taxable?
Yes. The provider could issue a resale certificate for information transferred as part of its credit reports, and its credit-reporting charges were taxable.
Were charges for administering a polygraph examination subject to Texas sales tax?
A stand-alone polygraph examination was not taxable. If it was billed as part of a taxable investigation service, the entire investigation charge was taxable.
Could a seller accept a hotel's resale certificate for linens when the permit number was invalid and hotels ordinarily used rather than re-rented linens?
No. The certificate lacked a valid Texas permit number, and the seller had to consider whether the hotel's ordinary business supported a good-faith claim that the linens were for resale.
How did Texas apply the new insurance-services tax to independent adjusters working in Texas for in-state and out-of-state insurance companies?
Texas confirmed the adjusters' six-point collection plan, including tax on total service charges, but clarified that work for an out-of-state company had to be performed in Texas.
Were charges for collecting and transporting salt water from well sites to disposal wells or disposal areas subject to Texas sales tax?
No. The letter said collecting or transporting salt water from a well site was not a taxable service under Rule 3.356(a)(3)(B).
Did repossessing improved equipment create a taxable sale, and how would Texas measure use tax on the improvements?
Repossession itself was not a sale. The seller owed use tax on the improvements based on the consideration it gave, but the letter lacked enough facts to determine that amount.
Were armored payroll delivery, vault storage, helicopter delivery, and security-guard services for commercial vessels taxable in Texas?
Yes, except security services performed exclusively offshore and outside Texas territorial waters were not taxable under the letter.
Could a restaurant obtain a refund of sales tax paid on electricity bought before October 1, 1987, when food-preparation electricity became taxable?
Yes, if the prior electricity use was predominantly exempt based on the preceding 12 months and Rule 3.295's requirements were met.
Were accident reinvestigation, consulting, and information-compilation charges to insurers and attorneys taxable as claims services?
Yes. The described services were taxable as insurance-claims adjustment or claims processing, including charges to insurers and attorneys.
Which janitorial supplies could be bought tax-free, and could a janitorial company issue resale certificates to taxable-service subcontractors?
Transferred supplies such as trash containers and floor wax could be bought tax-free; consumed cleaners could not. Taxable subcontracted services could be bought for resale.
Were pager-service fees taxable when the provider supplied equipment or the customer used its own, and how was the equipment purchase treated?
Pager-service fees were taxable either way. Equipment transferred with the service could be bought for resale; retained equipment could not.
Did a Texas motor-vehicle repairer charge customers tax on lump-sum bodywork, painting, rustproofing, or undercoating, and how were decorative painting charges treated?
No tax was billed on lump-sum repairs; the repairer paid tax on materials. Murals, pinstriping, and signs were taxable on the total charge.
When were plant maintenance, plant leasing with maintenance, and landscaping taxable, and could an older written contract delay tax?
The services were taxable on the dates stated in the letter, but a qualifying contract signed by July 21, 1987 temporarily delayed tax.
Was the total charge for installing leased electrical capacitors on existing commercial systems subject to Texas sales tax?
Yes. The capacitors remained tangible personal property under the lease, so their sale and installation were taxable; the financing lease was treated as a sale with tax due at the time of sale.
What interim Texas sales-tax methods could credit reporting companies use, and when were screening reports taxable?
Texas accepted two interim reporting methods. Screening reports delivered to a Texas customer were taxable, while reports delivered outside Texas were not.
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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.