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.
No Texas rulings match these filters
Try a different search term or clear the filters.
Did a four-wheel all-terrain vehicle qualify for the therapeutic-device sales-tax exemption when used instead of a motorized wheelchair?
No. The Comptroller said the all-terrain vehicle did not qualify under the stated definition of a therapeutic appliance or device.
Was a separately stated charge for a commercial diver's own equipment taxable when the equipment was provided only with the diver's service?
No. The diver provided a nontaxable service rather than an equipment rental, so the separate equipment charge was not taxed. The diver paid tax when buying the equipment.
Which tractors, harvesters, bins, dollies, trailers, repairs, labor, and freight qualified for Texas agricultural exemptions?
Exclusive-use tractors and harvest equipment qualified; dollies also used to haul produce to a plant did not. Bin treatment depended on purchase date, and trailer treatment depended on farm use and mo…
Could a Catholic hospital use its religious-organization sales-tax exemption to buy liquor for medical staff meetings?
No. Although the hospital itself qualified as a religious organization, the liquor purchase was not related to its exempt purpose and therefore did not qualify.
Did transferring title to a freight forwarder before export count as a sale supporting a resale certificate?
Not by itself. The freight forwarder had to act as the actual purchaser's agent under a written agreement. Otherwise, foreign resale required title to reach the customer before export or tax followed …
Did fixed-term leases signed before October 2, 1984 qualify for the historical prior-contract exemption and protection from later local tax increases?
Yes while continuously in force, but the general exemption expired September 30, 1987. A qualifying contract also received three years of protection from a later local-option rate increase.
Was admission to a restaurant tasting event taxable when the ticket let attendees sample food and drinks from restaurant booths?
Yes as a sale of food and drink, even though the admission was not an amusement-service charge. The mixed-beverage portion already subject to gross-receipts tax was excluded from sales tax.
Was a computer-equipment sale-leaseback a taxable sale and rental or merely a financing arrangement, and was the original sales tax refundable?
The initial purchase remained taxable and not refundable. If the leaseback party was only a secured creditor and the buyer retained the listed ownership burdens and benefits, the leaseback was financi…
Was Texas sales tax due when a contract carrier picked up insulation at the seller's Texas plant and delivered it directly to an out-of-state customer?
No. Direct delivery to the out-of-state customer by the contract carrier kept the insulation sale outside Texas tax, provided the seller retained bills of lading documenting delivery.
Did publicly displaying out-of-state or Mexican goods at a Texas trade show fall within the temporary-storage exclusion from taxable use?
Not unless the goods were being held for sale in the regular course of business. Public trade-show display alone did not fit the exclusion from use.
How did Texas tax the purchase, five-year bareboat lease, offshore drilling charges, repairs, refitting, component parts, and supplies for a large commercial rig?
The commercial-vessel purchase, qualifying foreign lease, offshore drilling charges, repair labor, and component parts were exempt. Supply items were taxable unless used exclusively in offshore minera…
Did an out-of-state pipe seller become engaged in business in Texas by temporarily storing sales inventory here despite having no Texas salespeople?
Yes. Section 151.107 treated temporary use of a Texas storage place as doing business in the state, so the seller had a collection duty. Customer proof of paid tax could remove sales from the audit.
How did Texas tax cosmetic and medical pet grooming, prescribed veterinary supplies and diets, and items such as foggers and leashes?
Cosmetic grooming was taxable, while clipping required for treatment was not. Prescribed qualifying supplies and diets were exempt, but ordinary clinic sales and nonmedicine items such as foggers and …
Were health-club membership contracts signed before October 2, 1984 exempt from Texas sales tax?
Yes. The Comptroller said contracts entered into before October 2, 1984 qualified for the prior-contract exemption, but that exemption expired September 30, 1987.
How should a repair shop handle third-party vehicle-storage fees paid for a customer?
The shop should pay tax on the storage fee, not issue a resale certificate, and bill it as a storage reimbursement without adding tax again.
Were salads, dressing, and soup sold from an in-store salad bar taxable in Texas?
Yes. They were taxable because utensils were provided or the food was heated; the retailer also had to keep records separating grocery and food-service sales.
How did Texas tax and source ticket sales for home games, mail orders, subcontractors, and games outside Texas?
Home-game tickets used the event city's rate and allocation; out-of-state games were not subject to Texas sales tax, with special use-tax and agent rules.
What Texas sales-tax exemptions applied to sales by Boy Scout troops?
The Comptroller said Boy Scout branches qualified as educational organizations, allowing one tax-free sale yearly and exempt qualifying food sales.
Were annual season-pass fees for resort cabins, cottages, and campsites taxable in Texas?
Cabin and duplex-cottage fees were fully subject to hotel occupancy tax, while campsite reservation fees were not subject to hotel or amusement tax.
Which automobile machine-shop services were taxable repair, remodeling, processing, or parts sales?
Ordinary repair and maintenance labor was not marked taxable, but engine-performance remodeling, flow testing, reconditioned parts, and mixed jobs were taxable.
Could a telephone company accept one blanket exemption certificate for a customer's multiple locations?
Yes, if every location and number was identified. The certificate also had to describe the services plainly and list the purchaser's phone number.
Did a Texas seller owe sales tax on off-road vehicles sold to Arkansas residents?
Yes when the buyer took delivery in Texas, even if Arkansas motor-vehicle tax was collected; documented vehicles delivered into Arkansas were exports.
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.
Which downhole well services were taxable in Texas, including logging, perforating, and pipe recovery?
Logging, perforating, separately stated caliper work, drill-pipe or casing recovery, and plug setting were nontaxable; some tubing recovery was taxable.
Was an ambulance exempt from Texas motor vehicle tax when it was not purchased by a volunteer fire department?
No. The Comptroller said § 152.087 exempted an ambulance only when a volunteer fire department purchased it. The ambulance also did not qualify under § 152.086's historical disability-related vehicle …
Was oil-based drilling mud treated as rented property or as a taxable sale when consumed during drilling?
It was a taxable sale, not a rental or lost-item reimbursement. The mud was a consumable supply, and the Comptroller denied the sales-tax refund.
Were separately stated charges for assembling rented board roads at the job site taxable?
Yes. Texas reversed its prior installation treatment and required tax on board-road assembly charges for contracts made on or after March 21, 1986.
Were design work, contract blueprints, and separately sold extra blueprint copies taxable in Texas?
Design services and included copies were nontaxable, but extra copies sold above the contract quantity were taxable unless the sale qualified for exemption.
Was the requester's existing diplomatic tax-exemption card still valid for Texas sales tax?
No. Based on information from the U.S. Department of State, the Comptroller said the requester's existing exemption card was no longer valid.
Were utilities exempt when a building owner included them in rent charged to the Mexican Consulate?
No. The building owner, not the consulate, bought the natural gas and electricity, so the utilities were taxable commercial use.
Did a series of asset transfers between commonly owned affiliates qualify as an exempt occasional sale?
No. Even with substantially similar ownership, at least 80% of the property had to move in one transaction; the months-long series was taxable.
Was a car bought in Texas for use in Mexico exempt from Texas motor vehicle sales tax?
Yes, if the car was intended exclusively for use outside Texas, driven directly out of state, and not titled or registered in Texas. Texas registration conclusively showed Texas use and made sales tax…
Who had to collect and remit Texas sales tax in a direct-sales organization using independent salespersons?
The direct-sales company was the seller and had to collect tax based on suggested retail price; its independent salespersons did not need permits or returns.
Was a grain-handling system built for the landowner an improvement to realty in Texas?
Yes. The system and permanently attached components were real property, and those components remained realty when temporarily removed for repair.
Could a health club exclude diagnostic-analysis and optional-service charges from taxable membership fees?
Diagnostic analysis had to be included in the membership price unless the prescribed-service exemption applied; genuine optional charges could be separated.
Which welding, repair, loading, and hauling charges on nine oilfield invoices were taxable?
Welding and salt-water-line work were taxable; roustabout loading and pipe hauling were not. Ambiguous invoices were presumed taxable.
Was a storage-trailer rental tax-exempt because a contractor used it on an independent school district construction project?
No. Motor vehicle rental tax was due because the contractor, not the independent school district, rented the storage trailer. The public-agency exemption required a direct rental to the agency, so the…
Who bore the Texas sales-tax risk when a Mexican customer refused to provide proof that goods were exported?
The Texas seller did. The customer was not excused from Rule 3.323 documentation, and the seller owed collection and remittance without proper proof.
Which swabbing, tubing, drilling, testing, and acidizing-related well-service charges were taxable?
Most swabbing, testing, cement-drilling, plug, packer, and acidizing-related work was nontaxable; two rod-and-tubing jobs were taxable.
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 queen-bee cups, beekeeping supplies, honey, and bees subject to Texas sales tax?
Queen-bee cups were taxable unless bought for resale or qualifying honey production; honey and listed production supplies were exempt, but clothing was taxable.
Which materials and equipment for a federal-agency hospital construction project were exempt from Texas sales tax?
Items incorporated into the federal hospital project were exempt from state, city, and MTA tax; equipment and supplies not incorporated remained taxable.
Was a performer's charge for recording a voice-over for a television commercial subject to Texas sales tax?
No. The performer's voice-over fee was neither tangible personal property nor a taxable service, although the station's total production charge was taxable.
Did Texas's commercial-vessel sales-tax exemption cover a fiberglass vessel displacing less than eight tons?
No. The letter said the exemption required at least eight tons displacement, exclusive and direct commercial use, and sale by the builder.
Were a foreign corporation's officers and directors personally liable for Texas sales tax when the corporation lacked required permits?
Yes, for tax that should have been collected and remitted during their tenure. They were not personally liable for tax incurred before they became officers or directors.
Which repair, appliance, assembly, crating, and packing charges to moving companies were taxable in Texas?
Repairs were taxable even when move-related, while listed labor services billed to licensed moving-company agents were nontaxable; materials remained taxable.
Did a provider of Las Vegas-style parties have to collect Texas sales tax or hold a sales-tax permit?
Not unless the provider charged admission. The party service was otherwise nontaxable, but the provider owed tax on all equipment and property used.
Did assigning a rental-vehicle purchase contract and security title to a new lienholder trigger Texas motor vehicle sales tax?
No. The car dealer remained the buyer obligated to take title under the original conditional-sale contract. Corporation B merely replaced Corporation A as contract holder and held title as security fo…
What certificates and shipping records did a Texas seller need for offshore-use and export sales-tax exemptions?
Texas required a complete exemption claim for qualifying offshore goods or prescribed export proof; vague offshore wording and unsupported Texas delivery were insufficient.
How did Texas tax vehicle window-tinting charges before and after the February 12, 1986 rule change?
Before February 12, film and installation were taxable unless labor was separately stated; afterward, lump-sum jobs were nontaxable and separated materials taxable.
Were parking, canoe-rental, and customer-shuttle charges subject to Texas sales tax?
Parking and canoe-rental fees were taxable, but separately stated charges for shuttling customers were not taxable.
Did greasing, painting, rebuilding, or overhauling used drilling bits qualify for Texas manufacturing exemptions?
Rebuilding or overhauling qualified as remanufacturing, but greasing or painting did not; exemption applied only to items used exclusively in qualifying work.
Did a physician's prescription for swimming therapy make a planned swimming pool exempt from Texas sales tax?
No. The Comptroller said a swimming pool did not qualify as an exempt therapeutic device even though a physician prescribed swimming as therapy.
Were fees for coupon advertising on cash-register tape and the related design setup charge taxable in Texas?
The periodic advertising-space fee was nontaxable, but employee-fabricated artwork or design was taxable; the provider owed tax on tape and printing costs.
What did the Comptroller's 1986 internal guidance say changed in Franchise Tax Rule 3.406 and its throwback-rule application?
Two policy changes applied to reports due on or after January 9, 1986; other revised provisions reflected older policy and could apply back within limitations.
Were equipment sales, rentals, and leases to federal service contractors exempt when title passed immediately to the government?
Not merely because title passed or the contractor acted for the government. Items used by an independent contractor were taxable unless actually sold and transferred to the government.
Was a bookstore's fee for admission to a merchandise-display area a taxable amusement charge in Texas?
Yes. The merchandise display was an event under Rule 3.298, and an event could be an ongoing activity rather than a single or infrequent occasion.
When were a retailer's inbound and outbound equipment freight charges taxable under Texas's 1986 delivery rule?
Inbound factory-to-retailer freight was taxable. Retailer-to-customer freight escaped tax only if separately stated, common-carrier delivered, and FOB retailer.
Which muffins, milk, and other beverages sold by a takeout shop were subject to Texas sales tax?
Heated muffins and beverages sold in cups were taxable; unheated muffins sold without utensils and milk sold in cartons were not taxable.
Was renting a tanning booth or tanning bed a taxable amusement service in Texas?
No. Under the facts presented in the 1986 letter, renting a tanning booth or tanning bed was not a taxable amusement service.
Browse Texas rulings by topic
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.