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Ezel / Tax Rulings / TX
TX 8701L0785A03 Sales and/or Use Tax (State,Local,MTA) 1987-01-08

Did a 1986 special order delivered in 1987 use the old Texas sales-tax rate when the customer paid a nonrefundable deposit?

Short answer: Yes, if the original order had a set price, the customer signed it, and the customer paid the nonrefundable deposit.

Apply this to your situation

This page answers the general question as of 1987. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1987
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 1987 Texas Comptroller letter concerns delivery after a historical January 1, 1987 tax-rate increase and depends on a signed set-price order plus a nonrefundable deposit. It is not current special-order or rate guidance. Verify current contract, deposit, payment, delivery, rate, state, local, and MTA tax rules. STAR documents may no longer represent current policy even when not marked superseded. Identities are redacted. 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

The Texas Comptroller said a home-furnishings special order placed in 1986 but delivered in 1987 could use the 1986 tax rate.

The original order had to state a set price, be signed by the customer, and be accompanied by the nonrefundable deposit.

What this means for you

The deposit alone was not the full test. The ruling also required a customer-signed original order and a fixed price before the rate change.

Common questions

Did 1987 delivery automatically require the new rate? No.

What supported the 1986 rate? A set-price original order signed by the customer plus a nonrefundable deposit.

Citations and references

  • The letter cited no numbered statute or Comptroller rule.

Source

Original ruling text

January 8, 1987

Dear ***:

Thank you for your recent letter which is restated with response below.

Situation:
We are a home furnishings business which does most of our business on a
special order basis. We are interested in knowing the ruling concerning
the merchandise sold and a deposit made in 1986 but which will not be
delivered until in 1987. Are we to charge the current rate of 6.125% or use
the new rate effective January, 1987. Since our sales invoices state "special
order deposits not refundable" we want to know the ruling on this kind of a
transaction. We will appreciate your assistance in this matter.

Response:
If the original order is at a set price and signed by the customer in
addition to the non-refundable deposit, it will be subject to the 1986 tax rate.

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 us if you have additional questions. You may
write us, call toll free 1-800-252-5555 from anywhere in Texas or phone
512/463-4600.

Sincerely,

Tax Policy Section
Tax Administration Division

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