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Ezel / Tax Rulings / TX
TX 8510L0667E05 Sales and/or Use Tax (State,Local,MTA) 1985-10-07

Did Texas's agricultural exemption cover a farm's mobile-telephone service, equipment, setup, and intrastate calls?

Short answer: No. Mobile service, equipment, installation setup, and intrastate long-distance charges were taxable because communications equipment did not qualify.

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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 1985 Texas Comptroller taxpayer-response letter applying the agricultural exemption to mobile-telephone service, communications equipment, installation setup, and intrastate long-distance calls used on a farm. STAR's caption mentions GPS and navigation of farm machinery, but the reproduced body does not, so this page does not claim those technologies were decided. Current agricultural, telecommunications, equipment, installation, navigation, and sales-tax rules may differ, and STAR documents may no longer represent current policy even when not marked superseded. Letters on STAR can support detrimental reliance only for the taxpayer to whom the letter was directly issued under 34 Tex. Admin. Code Rules 3.1 and 3.10. This summary is informational only and is not legal or tax advice.
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

Mobile-telephone service bought for use on the farm was taxable. Charges for communications equipment, installation setup, and intrastate long-distance calls were also taxable.

Although machinery and equipment used exclusively on a farm or ranch to produce agricultural products for regular sale could qualify for exemption, the Comptroller said communications equipment had never qualified.

Common questions

Was the farm's mobile service taxable? Yes.

Were the equipment and installation setup taxable? Yes.

Were intrastate long-distance calls taxable? Yes.

Did the reproduced body address GPS or machinery navigation? No.

Citations and references

The reproduced letter cites no numbered statute or rule.

Source

Original ruling text

October 7, 1985

Dear **:

Thank you for your letter of September 24, 1985, concerning the taxability of
telecommunications services purchased for agricultural use.

The mobile telephone services purchased for use on your farm are taxable as
well as the charges for the equipment and installation set-up, and intrastate
long distance calls. The sales tax law exempts machinery and equipment used
exclusively on a farm or ranch in the production of agricultural products sold
in the regular course of business. Communications equipment has never qualified
for agricultural exemption.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the
Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division

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