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Ezel / Tax Rulings / TX
TX 8410L0600B13 Sales and/or Use Tax (State,Local,MTA) 1984-10-24

Did a federal real-property improvement contract entered before October 2, 1984 qualify for Texas's prior-contract exemption?

Short answer: Yes. The letter said the federal real-property improvement contract entered before October 2, 1984 qualified for the prior-contract exemption from the stated historical 4 1/8% sales tax.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 a contract to improve federal-government real property qualified for the historical prior-contract exemption because it had been entered before October 2, 1984.

The letter described the exemption as applying to the stated 4 1/8% sales tax. That rate is historical and not current guidance.

The body header prints “October 24, 1934,” while STAR metadata dates the document October 24, 1984 and the body discusses a contract entered before October 2, 1984. This page preserves the printed error in the original text and uses the official STAR metadata date in frontmatter; it does not claim the body header itself says 1984.

What this means for you

Federal contractors

The historical result depended on the contract being entered before the stated October 2, 1984 cutoff.

Accountants and tax professionals

Do not reuse the 4 1/8% rate or assume the old prior-contract rule remains in effect. The source also contains a conflicting printed header year.

Common questions

Q: Did the contract qualify for the exemption?
A: Yes.

Q: What cutoff did the body use?
A: The contract had been entered before October 2, 1984.

Q: What date is printed at the top of the body?
A: October 24, 1934; STAR metadata identifies the document as issued October 24, 1984.

Citations and references

  • The letter cites no statute or administrative rule.
  • The stated 4 1/8% rate is historical.

Source

Original ruling text

October 24, 1934

Dear **:

Thank you for your recent letter regarding the prior contract exemption
on federal contracts.

As we discussed, you have entered into a contract to improve real
property for the federal government prior to October 2, 1984.

This contract would qualify for the prior contract exemption from the 4
1/8% sales tax.

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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