Are online training courses for property management professionals — with interactive lessons, progress tracking, and completion/mastery certificates — a taxable information service in Texas?

Plain-English summary

The Texas Comptroller ruled that a company's online training courses for the property management industry are not a taxable information service. The courses combine interactive instructor-led lessons, built-in progress tracking visible to both students and their supervisors, and randomly-generated assessments drawn from a question database — students scoring 70%+ earn a completion certificate, and those scoring 100% earn a mastery certificate. No software download or physical media is required; customers access everything online.

Texas taxes "information services" — defined as furnishing general/specialized news or current information, or electronic data retrieval/research — but the Comptroller found this company's offering doesn't fit that category at all. It doesn't gather, maintain, or compile information the way a newsletter, mailing list, financial report, or wire service does (the examples the regulation itself lists). Instead, it delivers instruction and verifies student competence — a fundamentally different function from compiling and furnishing information to customers.

This ruling later became the founding precedent for a whole line of Texas online-education rulings. Multiple 2019 Comptroller rulings scraped and enriched in this corpus — including 201902012L, 201902013L, and 201902023L — expressly cite this September 2018 ruling (along with its same-day companion 201809009L) as the basis for finding webinar and curriculum-based online education nontaxable. This is the first-scraped instance of that originating authority.

What this means for you

Online training and certification providers

If your training product combines instructor-led content, progress tracking, and knowledge assessments (even with formal completion/mastery certificates), Texas has a well-established line of authority — starting with this ruling — treating that kind of offering as nontaxable education rather than a taxable information service, regardless of the specific professional industry it serves.

Industry-specific training and networking organizations

This ruling specifically involved property management industry training, but its reasoning (instruction + competence verification ≠ information gathering/compiling) has been applied by the Comptroller across other industries in later rulings, making it a durable general framework rather than a property-management-specific rule.

Accountants and tax professionals

Because this ruling is now cited as authority in later Comptroller rulings, it's worth having in the corpus as primary source material — when advising a client on an online-education product, this is the earliest documented articulation of the "instruction and competence verification, not information compilation" test that recurs throughout 2019 STAR rulings on the same topic.

Common questions

Q: What makes a service a taxable "information service" versus nontaxable education?
A: An information service gathers, maintains, or compiles information and makes it available for consideration (like newsletters, mailing lists, financial reports, wire services). Delivering instruction and testing competence is fundamentally different and falls outside that definition.

Q: Do completion or mastery certificates make online training taxable?
A: No — certificates evidencing competence verification are treated as consistent with genuine instruction, not as evidence of a taxable information service.

Q: Why is this ruling important beyond its own facts?
A: It's the earliest-dated ruling in this corpus establishing the reasoning that several later 2019 Comptroller rulings on webinars and online curricula explicitly cite and build on.

Q: Can another training company rely on this ruling?
A: No. It binds the Comptroller only as to the taxpayer and facts in this specific request and cannot be relied on by any other taxpayer, though its reasoning has proven durable across later Comptroller rulings.

Citations and references

Statutes and rules:

• Tex. Tax Code § 151.051 (sales tax imposed)
• Tex. Tax Code § 151.010 (taxable item)
• Tex. Tax Code § 151.0101(a) (taxable services)
• Tex. Tax Code § 151.0038 (information service)
• 34 Tex. Admin. Code Rule 3.342(a)(6) (Information Services)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/201809008L

Original ruling text

September 11, 2018

Re: Private Letter Request No. 2017010109

*, Taxpayer No. *

Dear ***:

We issue this private letter ruling in accordance with Rule 3.1, Private Letter Rulings and General Information Letters. [ENDNOTE: 1] We are responding to your request dated April 24, 2015. Detrimental reliance relief is provided in accordance with Rule 3.10, Taxpayer Bill of Rights.

You requested guidance regarding the taxability of online training courses.

Facts Presented

The relevant facts are based on information provided in your private letter ruling request and subsequent email correspondence.

**** (Taxpayer) provides education and networking services for those working in the property management industry. It provides online training courses that include interactive lessons with an instructor, built-in tracking for students and supervisors to monitor students’ progress, and student assessments that Taxpayer randomly generates from a database of questions. Students that score at least 70% on a final knowledge challenge receive a completion certificate. Students achieving a perfect 100% score receive a mastery certificate.

There is no required software to download or install and Taxpayer does not use physical media (i.e., DVDs). Taxpayer’s customers may access the courses anywhere via the Internet.

Question, Ruling, and Analysis

Our restatement of your question is shown below, followed by our response and analysis.

Question: Are charges for Taxpayer’s online training courses taxable as the provision of an information service?

Ruling: Taxpayer’s provision of online training courses is not a taxable service.

Analysis: Texas imposes a sales tax on each sale of a taxable item in this state. Section 151.051 (Sales Tax Imposed). The term “taxable item” includes tangible personal property and taxable services. Section 151.010 (“Taxable Item”). Only specifically enumerated services are taxable in Texas. Taxable services include cable television services and information services. Section 151.0101(a) (“Taxable Services”).

Information services are taxable services. Section 151.0101(a)(10) (“Taxable Services”). Section 151.0038 defines an information service as “furnishing general or specialized news or other current information” or “electronic data retrieval or research.”

Rule 3.342(a)(6) (Information Services), states that information “gathered, maintained, or compiled and made available by the provider of the information service to the public or to a specific segment of industry for a consideration is subject to sales tax.” The rule provides examples of such services, which include newsletters, scouting reports and surveys, mailing lists and bad check lists, real estate listings, financial reports, and news clipping services and wire services.

Taxpayer’s interactive, online training courses do not resemble the types of services described in Rule 3.342(a)(6). Taxpayer does not gather, maintain, or compile information for its customers. Taxpayer provides student instruction and verifies student competence in the subject matter taught. Based on the examples in Rule 3.342, Taxpayer’s training courses are not general or specialized news or other current information. The training courses do not fall within the definition of an information service as set out in Section 151.0038 and Rule 3.342.

The Texas Tax Code, Texas Administrative Code are accessible at www.comptroller.texas.gov/taxes/.

If you have questions about this private letter ruling, please email us through our website at https://comptroller.texas.gov/web-forms/tax-help/ and reference Private Letter Ruling No. 2017010109.

Sincerely,

Tax Policy Division – Indirect Taxes

Texas Comptroller of Public Accounts

ENDNOTE:

1. Unless otherwise indicated, all references to “Section” are to the Texas Tax Code, and all references to “Rule” are to Title 34 of the Texas Administrative Code.