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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Does Texas sales tax apply to a company's fee for reviewing and proofreading auto dealers' manufacturer-warranty reimbursement claims before they're submitted?
No. A company that only reviews, edits, and proofreads dealers' warranty reimbursement claims already entered into the manufacturer's own system — without keeping its own database, entering data, or s…
Are an IT vendor's PC deployment, maintenance, and asset-management services taxable in Texas, or do they qualify as nontaxable 'services by employees'?
Taxable. The Comptroller ruled that an IT vendor's PC pre-deployment, installation, break-fix, move/add/change, asset-management, and reporting services are all taxable in Texas because they're perfor…
Is admission to a children's scaled-city role-play facility a taxable amusement service or a nontaxable educational program?
Taxable. The Comptroller ruled that admission to a scaled-city facility where children role-play adult jobs is a taxable amusement service, because the instructors don't meet the scholarly/expert stan…
Is oilfield 'swabbing' — running cable and rubber cups down a well to remove hydrostatic water and start/restart production — a taxable service in Texas?
It depends on the specific downhole task. Swabbing done to start or restart a well — running cable with rubber cups to remove hydrostatic water, even with incidental sand or paraffin — is a nontaxable…
When a commercial-production company gives its raw daily footage ('dailies') to the client at no extra charge, alongside the paid final production, does it owe sales tax on that transfer?
No. Sales tax is not due on the transfer of dailies (raw, unedited daily footage from filming) to the client when the client pays nothing extra for them and receives no separate consideration in retur…
Can a company that manages and coordinates real property surveys for its customers buy the underlying surveying services tax-free for resale, and does it matter that the company itself isn't a licensed surveyor?
No, not to escape tax on resale — the total amount the company charges its customers for coordinating real property surveys is taxable, because it's buying and reselling a taxable real property servic…
Is labor to clean and detail a private corporate aircraft taxable, and does it matter if the cleaning includes steam-cleaning the carpet?
No tax is due on labor charges for general cleaning/detailing maintenance of a private aircraft. But carpet cleaning specifically is its own taxable service under Tex. Tax Code § 151.0045 and Rule 3.3…
An accountant wants to offer telephone technical support answering bookkeeping 'how to' questions and software questions to clients — does that require charging Texas sales tax?
Technical support answering questions about accounting or bookkeeping procedures is not subject to Texas sales tax. But a charge for software technical support IS taxable specifically if the person pr…
Is a security guard service — hiring a guard from a security company to walk a business's premises at night — subject to Texas sales tax?
Yes. Charges for providing security services to property or persons located in Texas are subject to Texas sales tax, so the security company was correct to charge sales tax on its hourly guard-service…
When a business that provides a taxable service separately bills a client for its own travel expenses (airfare, meals, hotel), are those reimbursed expenses part of the taxable sales price?
Yes. Travel expenses billed by a provider of a taxable service are part of the taxable sales price and are subject to Texas sales tax — Tex. Tax Code § 151.007(a) does not allow the sales price of a t…
Is a service that inspects vehicle body-shop repairs and reports on their quality subject to Texas sales tax?
No, unless the service is performed for an insurance company. Post-repair inspection and reporting is not taxable in general, but the same service becomes a taxable insurance service (requiring collec…
Is a company that arranges and coordinates real property surveys for its clients, using independent licensed surveyors, purchasing survey services for resale and required to collect tax from its own customers?
Yes. Based on the contracts submitted, the coordinator is purchasing surveying services for resale and reselling them to its customers — it may give the surveyor a resale certificate instead of paying…
Which bulk-mail fulfillment charges (sorting, folding, collating, stuffing, shipping) are subject to Texas sales tax?
Fulfillment mailing services — sorting, stuffing, metering, folding, labeling, and collating printed matter supplied by the customer, plus set-up fees, storage, packaging, and shipping/freight charges…
When an insurance carrier reimburses a service provider for travel, meals, and hotel expenses incurred while performing a taxable service, is that reimbursement itself part of the taxable sales price, even though it's separately stated and feels like a pass-through cost rather than a fee for the service?
Yes. Expense reimbursements like travel, meals, and hotel costs are taxable as part of the total price of the taxable service, even if separately stated on the bill -- Tax Code Sec. 151.007(a) defines…
If a company becomes a co-plaintiff to help a plaintiff collect a court judgment, and its compensation comes out of the judgment itself rather than a separate invoiced fee, does Texas sales tax still apply to that arrangement?
Yes. Helping collect a delinquent debt or judgment is a taxable 'debt collection service' under Tax Code § 151.0036(a) and § 151.0101(a)(8), and the tax applies to whatever the company receives for th…
Is an insurance agent fee charged under Texas Insurance Code Article 21.35B subject to Texas sales tax?
No. An agent fee authorized under Texas Insurance Code Article 21.35B — charged in connection with an insurance application or policy issuance, and not in lieu of a commission — is not subject to Texa…
When is a staff leasing arrangement exempt from Texas sales tax, and what happens if the leased employees perform otherwise-taxable services like data processing, security, or collections?
A staff leasing arrangement is exempt from sales tax only if it meets ALL of Rule 3.364(b)'s conditions: at least 75% of the assigned employees were previously the client's own employees for at least …
Is a long-standing workforce-provision contract for a chemical plant's operational staff nontaxable as staff leasing, even though the contractor directs supervision, assumes liability, and can subcontract work?
No -- based on the contract terms described, this arrangement is an independent-contractor services agreement, not staff leasing, so Rule 3.364(c)'s staff-leasing exclusion doesn't apply. Tasks perfor…
Is a torque turning and computerized torque measurement service (joining/tightening drill pipe and measuring joint torque) for oil and gas wells taxable in Texas, and does it matter whether it's a new well or a producing/workover well?
Torque turning and computerized torque measurement service -- joining and tightening pipe on wells being drilled or serviced, and measuring the torque applied to each joint -- is not, by itself, a def…
I'm a Texas private investigation/security firm with clients and jobs both inside and outside Texas -- which of my investigation and security services are subject to Texas sales tax?
It depends on where the investigation is performed and where its object/benefit is located, not on where the client is based: investigations of people, places, or facilities located outside Texas are …
Is the electricity my golf club charges to recharge members' own golf carts, stored in the club's cart barn, taxable?
Yes, taxable. The electricity used to recharge golf carts that belong to members (not the club) is taxable, because the cart barn storage space is sold as part of a taxable club membership -- an amuse…
Is the money a customer pays directly to a table/couch dancer at a topless club subject to Texas sales tax as an amusement service?
No. The Comptroller ruled that a table dance or couch dance is an amusement, but the payment a customer makes directly to the dancer is not a taxable sale of an admission to an amusement service under…
Are charges for telemarketing sales calls, list-based calling, and related services (compiling lists, mail fulfillment, final reports) subject to Texas sales tax?
Charges for making sales calls (soliciting sales and taking orders) are not subject to Texas sales tax. But charges tied to gathering or selling customer/prospect information -- such as calls made usi…
Does Texas sales tax apply to charges for mechanical warranty inspections that determine what caused equipment or a motor vehicle to break down, without appraising the dollar amount of damage?
No. The Comptroller ruled that charges for inspecting tangible personal property are not taxable unless the inspections are performed under a policy or policies of insurance. Because mechanical warran…
When is help provided by a temporary help service exempt from Texas sales tax as a 'temporary employee,' even if the assignment lasts an extended period?
There is no fixed time limit that turns a 'temporary' worker into a taxable service. The Comptroller applies a three-part test under Tax Code 151.057: the help must supplement the customer's existing …
Does an insurance agent owe Texas sales tax on an administrative fee charged to clients to reimburse the agency for expenses like postage, printing, and phone calls, or on a pass-through charge for a third-party coverage evaluation?
Generally not taxable. The Comptroller ruled that an insurance agency's $50 administrative fee is not taxable if it merely reimburses the agency for enumerated costs like postage, printing, and teleph…
Are disconnection or cancellation charges billed by a telecommunications company subject to Texas sales tax?
Yes. The Comptroller ruled that disconnection or cancellation charges tied to telecommunications service are taxable in the same manner as the underlying service, because they fall within the Tax Code…
Is sales tax due on insurance adjusting services for claims related to a declared disaster or catastrophe?
Yes, taxable. Insurance adjusting services are a taxable 'insurance service' under Texas Tax Code Section 151.0039, and nothing in the tax code exempts adjusting services just because the claim relate…
Is cleaning, inspecting, and applying a protective monel coating to oilfield equipment like submersible pumps and tank batteries a taxable repair or remodeling service in Texas?
Yes. Coating and re-coating oilfield equipment such as submersible pumps and tank batteries counts as taxable maintenance, remodeling, or repair of tangible personal property under Rule 3.292, so the …
When is a staffing or subcontractor arrangement exempt as a 'temporary employee' under Texas law, versus a taxable temporary help service?
It depends on meeting all four requirements of Tex. Tax Code § 151.057: the work must normally be done by the client's own employees, the client must supply the equipment, the client must directly or …
Do casualty insurance agencies owe Texas sales tax on fees they charge clients for services like claims administration, risk inspections, and rate-setting when those fees are paid instead of a sales commission?
Yes. When a casualty insurance agency charges a client a fee -- instead of earning a sales commission -- for services such as claims administration, risk inspections, rate-setting, or claims/loss adju…
Can a caterer, hotel, or restaurant use a resale certificate to buy or rent tables, chairs, decorations, or audio-visual equipment used in providing food service, instead of paying tax on those items?
No. A caterer, hotel, or restaurant that buys or rents equipment (such as tables, chairs, utensils, decorations, or audio-visual equipment) to use while providing food service must pay tax on that equ…
Does a process server who files court documents and pulls certified copies of court records owe sales tax on those services?
Filing or serving legal documents like citations, subpoenas, and writs is not a taxable service, and researching court records or requesting certified copies is not taxable by itself. But sales tax is…
Does a company that locates and negotiates preferred provider network contracts for health plans owe Texas administrative services tax or sales tax on the contingent commissions it earns?
No. A company that locates and negotiates contracts with preferred provider networks on behalf of health care and occupational injury plans, earning a contingent commission based on savings, owes neit…
Does an engineer hired by an insurance company to investigate a homeowner's damage claim have to charge the insurance company sales tax on the investigation?
Yes. The Comptroller ruled that an engineer's investigation of an insured's claim -- inspecting a dwelling and reporting on damage and its cause -- is a taxable 'insurance service,' so the engineer mu…
Is a machinery moving company's charge to relocate equipment within or between facilities subject to Texas sales and use tax?
No, not by itself. A machinery moving company's charge for simply relocating a machine or piece of equipment within a plant or between facilities is not taxable, but the entire charge becomes taxable …
If an industrial supply company runs a customer's on-site tool crib and charges a management fee plus product costs, is that management fee taxable?
Yes, in most cases. The Comptroller ruled that if the industrial supply company is a retailer of all the sales made through the tool crib (not acting as the customer's purchasing agent), then its mont…
Is a 'Maps on Demand' service that delivers maps and proximity information over the internet subject to Texas sales tax?
Yes. The Comptroller ruled that a 'Maps on Demand' service delivering maps and proximity data over a web page is taxable in Texas, and the entire charge -- including the monthly minimum and any per-ac…
Does a university have to charge sales tax on the fee it bills dorm students each semester for network port access to the campus computer system?
Yes. The semester fee a university charges dorm students for network port access to the campus computer system is taxable as a sale of information services, and the university must collect sales tax o…
Is a consultant's fee for auditing EDP controls, helping a client pick new computer hardware/software, or writing a software vendor's white paper subject to Texas sales tax?
No, none of the three described services is taxable on its own. Reviewing a client's EDP controls and writing a confidential audit report is not taxable, and neither is a needs-assessment/vendor-selec…
Is telephone or on-site technical support for software and hardware subject to Texas sales tax, and does it matter whether the same company sold the property?
Yes, if the property being supported is located in Texas. Telephone technical support for tangible personal property (hardware or software) is taxable when the property is in Texas, and exempt under T…
Is a charge for 'on hold' tapes with marketing messages played to callers waiting to be connected, plus related equipment, subject to Texas sales tax?
Yes. Charges for 'on hold' tapes containing marketing messages played to callers while they wait to be connected, and for the related equipment, are subject to Texas sales tax. A single charge coverin…
Is a separately stated charge for inspecting and testing a commercial building's fire alarm system subject to Texas sales tax?
No. A fire alarm system in a commercial building is considered an improvement to realty, so separately stated charges for inspecting and testing that system are not subject to Texas sales tax, even th…
Is a consultant/contract programmer's fee for helping a customer create an interactive multimedia training program taxable, when the customer will own the finished program?
No, generally not. Helping a customer create an interactive computer-based training program that the customer will own is nontaxable computer programming under Tax Code 151.0101(5)(D) — but the provid…
A manufacturer hired a company to manage its parts/supplies warehouse, and that same company also sells parts/supplies to the manufacturer. What determines whether the warehouse management fee is taxable?
It depends on whether the manager is performing taxable services (like janitorial or data processing) as part of the warehouse management work. If so, tax is due on those taxable services, including o…
Is a technical writing service — such as preparing a material safety data sheet on compressed gases — subject to Texas sales tax?
No, not the writing/editing itself. Separately-stated charges for developing a technical document (research, writing, and editing) are not taxable, but the writer owes tax on the materials and supplie…
A photographer offers glamour photography sessions that include a free makeover. Can the makeup and supplies used in the makeover be purchased tax free, and is the photographer responsible for collecting tax on the session itself?
Partly. The photographer may issue a resale certificate to buy tax free only the makeup and supplies actually transferred to the customer (like makeup, lipstick, and hair spray). Tax is owed on suppli…
As an advertising agency, which of our 'nonbillable' expenses (items and services we buy but can't fully bill back to clients) owe Texas sales/use tax, and which don't?
It depends on whether the item was resold to the client or just consumed by the agency. If an agency buys a taxable item or service for a client but ends up not billing (reselling) it -- for example, …
Is renting a university recording studio, including a technician's time, subject to Texas sales tax, and what about the tapes used during the session?
No, the hourly charge for using the university's recording studio is not taxable, and the charge for the technician's time is not taxable either. However, the charge for the materials provided during …
Is sales tax owed on cleaning, polishing, and restoring granite, marble, and terrazzo floors, walls, vanities, and tabletops?
It depends on what kind of work is done and on what type of property. Cleaning, polishing, waxing, and sealing natural stone surfaces (residential or nonresidential, or on furniture) is always a taxab…
If my company moves, disassembles, and reassembles office furniture, and also sells, delivers, or repairs furniture, which of these charges are taxable in Texas?
A pure moving service -- relocating a customer's modular furniture, even if you must disassemble and reassemble it to do so -- is not taxable in Texas. But if you are selling, renting, repairing, or r…
A towing company asks whether towing/transfer charges billed in connection with vehicle repossessions — including a "second tow" from a storage facility to an auction — are taxable debt collection services or nontaxable towing/transportation.
It depends on whether a repossession actually occurred. If a towing company is hired only to move a vehicle the lender already has access to (e.g., after the borrower voluntarily drops it at a dealers…
Is a repossession company's charge to a bank or lender for repossessing a vehicle a taxable service, including when the bank calls off the repossession before the vehicle is picked up?
Yes. Repossession work done for a financial institution is a taxable "debt collection service" under Rule 3.354(a)(4). This applies whether the repossession is a voluntary turn-over the company picks …
If a broker pays a financial-information company's subscription fee for a customer, and also pays the information company a separate premium/commission based on the customer's brokerage business, is that premium/commission subject to Texas sales tax — and does it matter that the broker is out of state?
The premium/commission a broker pays an information-service provider is NOT subject to sales tax as long as it's separately stated and represents genuine, separate compensation to the provider (not pa…
If my business charges landfill, garbage, or pallet companies a fee just to accept pallets and scrap materials at my facility (which I then use as raw material), do I owe sales tax on that fee?
No. The Comptroller ruled that a fee charged simply to accept pallets and related materials delivered by landfill, garbage, and pallet companies — without collecting the waste from the customer — is n…
Does a law firm that performs background investigations for its clients have to charge sales tax like a licensed private investigator would?
No, not merely by doing background investigations for clients. Legal services are not on the list of taxable services, so attorneys don't collect sales tax on their legal fees — they're instead treate…
Does a trade show exhibit contractor have to charge sales tax on storage, transportation, installation, design/construction, supplies, and refurbishing services for client-owned exhibits and displays?
It depends on the service. Storage, transportation, handling/removal charges, and installation (electrical drop) charges for client-owned exhibits are not taxable unless tied to a sale or lease of the…
Is a consultant who uses handwriting analysis, body language, statement analysis, and human behavior analysis to evaluate individuals for jury profiling or employment screening providing a taxable service in Texas?
No, generally not. The Comptroller's office told this consultant that using a computer to prepare analysis reports for clients doesn't make the work taxable "data processing services," and the underly…
Is cleaning/washing a trailer tank after hauling liquid chemicals a taxable service in Texas, and can the cleaning chemicals and required safety gear be bought tax free?
No, the cleaning itself isn't taxable — the Comptroller said washing out a trailer tank between loads is nontaxable maintenance to a motor vehicle. But the client still can't buy the cleaning chemical…
Is a cancellation fee charged when a customer ends a service agreement early subject to Texas sales tax?
It depends on the underlying service. If the service being cancelled is a taxable service, the cancellation fee is part of the taxable 'sales price' of that service under Tex. Tax Code § 151.007(a)(2)…
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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.