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Ezel / Tax Rulings / TX
TX 8410L0600D13 Sales and/or Use Tax (State,Local,MTA) 1984-10-22

Were Texas packing, crating, and shipping labor and the related packing materials taxable for domestic and international shipments?

Short answer: Packing, crating, and shipping labor was not taxable. Materials protecting items shipped outside U.S. territorial limits could be bought with an exemption certificate, while materials for U.S. shipments were taxable.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 labor for packing, crating, and shipping was not taxable.

Packing materials used to protect items shipped outside the territorial limits of the United States could be purchased tax-free with an exemption certificate. Packing materials used for shipments within U.S. territorial limits were taxable.

What this means for you

Export packers

The historical material exemption depended on the destination being outside U.S. territorial limits and on use of an exemption certificate.

Domestic packing and shipping businesses

The letter treated materials for shipments within U.S. territorial limits as taxable even though the service labor was nontaxable.

Accountants and tax professionals

Keep destination records and exemption certificates supporting export-material purchases, and verify current export and packing-material rules.

Common questions

Q: Was packing, crating, and shipping labor taxable?
A: No.

Q: Could export packing materials be bought tax-free?
A: Yes, for items shipped outside U.S. territorial limits and with an exemption certificate.

Q: Were materials for domestic shipments taxable?
A: Yes.

Citations and references

  • The letter cites no statute or administrative rule.

Source

Original ruling text

October 22, 1984

Dear **:

Thank you for your recent letter regarding packing, crating and shipping.

The labor to perform these services is not taxable.

Packing materials to protect items you ship outside the territorial
limits of the United States may be purchased tax free on an exemption
certificate. Packing materials for shipping items within the territorial
limits of the United States are taxable.

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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