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Ezel / Tax Rulings / TX
TX 8410L0591D11 Sales and/or Use Tax (State,Local,MTA) 1984-10-12

Were materials for federal real-property lump-sum contracts bid before October 2, 1984 exempt under Texas's prior-contract rule?

Short answer: Yes. Materials bought for the described federal real-property lump-sum contracts bid before October 2, 1984 qualified for the prior-contract exemption, which the letter said remained valid only through September 30, 1987.

Apply this to your situation

This page answers the general question as of 1984. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1984
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Texas Comptroller said materials purchased for lump-sum contracts to improve federal-government real property qualified for the prior-contract exemption when the contracts had been bid before October 2, 1984.

The letter said that exemption remained valid only through September 30, 1987.

What this means for you

Federal construction contractors

The historical material exemption depended on the contract type, federal real-property work, and the pre-October 2 bid date.

Accountants and tax professionals

This is a closed historical transition rule. The letter does not identify the underlying statute or define when a bid became qualifying.

Common questions

Q: Were the materials taxable?
A: No, for the described qualifying contracts.

Q: What cutoff did the letter use?
A: The contracts had been bid before October 2, 1984.

Q: When did the exemption end?
A: September 30, 1987.

Citations and references

  • The letter cites no statute or administrative rule.

Source

Original ruling text

October 12, 1984

Dear **:

Thank you for your letter regarding lump-sum contracts, for improvement
to real property for the federal government, bid prior to October 2, 1984.

Materials purchased to perform such contracts would qualify for prior
contract exemptions and would not be taxable. This prior contract
exemptions would be valid only through September 30, 1987.

This opinion is based upon the facts you presented. If there are
additional or different facts, this opinion may change.

Please feel free to contact me if you have additional questions. You
may write me, call toll free 1-800-252-5555 from anywhere in Texas
or phone 512/475-1931.

Sincerely,

Al Van Allen
Tax Policy Section
Tax Administration Division

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