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Ezel / Tax Rulings / TX
TX 8605L0732A07 Sales and/or Use Tax (State,Local,MTA) 1986-05-19

Were metallurgical testing services performed on customer-consumed and customer-manufactured parts subject to Texas sales tax?

Short answer: No. The testing service was nontaxable, so the provider did not collect tax from customers but owed sales or use tax on taxable items consumed in providing the service.

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This page answers the general question as of 1986. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1986
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 company performed metallurgical testing on parts that customers consumed and parts that customers manufactured.

The Comptroller classified the testing as a nontaxable service. The provider did not collect sales tax from its customers, but as the consumer of taxable items used to provide the service, it owed sales or use tax when buying those items.

Common questions

Was the testing charge taxable? No.

Did the provider collect tax from customers? No.

Who paid tax on supplies used in testing? The service provider.

Source

Original ruling text

May 19, 1986

Dear ***:

Thank you for your letter of May 7, 1986 concerning the taxability of
metallurgical testing.

The testing services which you perform for companies on parts consumed by
them and parts manufactured by them is not subject to sales tax. As the
provider of a nontaxable service, you are considered the consumer of all
taxable items used to provide the service. You owe sales or use tax at
the time of purchase of those items and are not required to collect tax
from your customers.

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

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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