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Ezel / Tax Rulings / TX
TX 8606L0742G06 Sales and/or Use Tax (State,Local,MTA) 1986-06-23

Did an equipment seller include a manufacturer rebate assigned by the purchaser when computing the amount subject to sales tax?

Short answer: Yes. The taxable amount included everything the seller received for the equipment, including a manufacturer rebate that the purchaser assigned to the seller.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 purchaser assigned a manufacturer rebate to the equipment seller.

The Comptroller said the seller's taxable amount included the total value received in exchange for the equipment, including the assigned rebate.

Common questions

Was the assigned rebate included in the tax base? Yes.

Why? It was part of the total amount the seller received for the equipment.

Source

Original ruling text

June 23, 1986

Dear ***:

*** has asked me to reply to your letter of June 4, 1986,
concerning manufacturer's rebates.

When computing the amount subject to tax, you should include the total
amount received in exchange for the equipment including any amount that
represents a manufacturers rebate assigned to you by the purchaser.

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 Administration Division

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