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Ezel / Tax Rulings / TX
TX 8504L0633B08 Sales and/or Use Tax (State,Local,MTA) 1985-04-23

Was machinery and equipment bought to make wine exempt when the winery was owned and operated by the original grape producer?

Short answer: Yes under the stated facts. The Comptroller distinguished winemaking from denim manufacturing and said machinery and equipment bought by a winery owned and operated by an original wine-grape producer to produce wine was exempt.

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This page answers the general question as of 1985. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1985
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

After reviewing the taxpayer's brief and consulting the tax policy section, the Comptroller distinguished winemaking from denim manufacturing.

The letter concluded that machinery and equipment purchased to produce wine were exempt when the winery was owned and operated by an original producer of the wine grapes.

The response is only a few sentences long. It does not reproduce the taxpayer's brief, identify a statute or rule, describe the machinery, or explain the denim-manufacturing comparison. The exemption should therefore be read only within the narrow facts the letter actually states.

Common questions

Did the letter exempt equipment for every winery? It expressly addressed a winery owned and operated by an original producer of wine grapes. Did it explain why denim manufacturing was different? No. Did it list qualifying equipment? No.

Citations and references

The reproduced letter cites no numbered statute or rule.

Source

Original ruling text

April 23, 1985

Dear ***:

After reading your brief and discussing it with *** and the tax
policy section, we have all concluded that wine making is distinguishable
from denim manufacture. Therefore, the purchase of machinery and equipment
by a winery owned and operated by an original producer of wine grapes to
produce wine is exempt.

Should you have any further questions, don't hesitate to call me.

Sincerely,

Associate Deputy Comptroller

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