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Ezel / Tax Rulings / TX
TX 8701L0788A05 Sales and/or Use Tax (State,Local,MTA) 1987-01-13

Could Texas decide a pre-1987 contract's rate exemption without seeing the contract, and how long did qualifying contracts remain protected?

Short answer: No taxpayer-specific decision was possible without the contract copy. Generally, qualifying written contracts or bids for specific items lasted until contract end, renegotiation or renewal, or September 30, 1989.

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 could not determine a taxpayer's exemption because the contract copy was missing. Its general prior-contract protection ended no later than September 30, 1989. It is historical guidance. Verify current contract, bid, documentation, renewal, renegotiation, 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 STAR documents may no longer represent current policy even when not marked superseded.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 could not decide whether the taxpayer's contract qualified for exemption from the 1987 rate increase because no contract copy was submitted.

The letter stated the general rule that a written contract or bid for specific items signed before January 1, 1987 qualified until the original contract ended or was renegotiated or renewed. All prior-contract exemptions expired September 30, 1989.

What this means for you

The general timing rule did not replace the need to submit and review the actual contract. The agency made no taxpayer-specific qualification finding.

Common questions

Did the Comptroller approve the taxpayer's contract? No.

Why not? The taxpayer did not submit a copy.

What generally qualified? A written contract or bid for specific items signed before January 1, 1987.

When did protection end? At contract end, renegotiation or renewal, or September 30, 1989.

Citations and references

  • The letter cited no numbered statute or Comptroller rule.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

January 13, 1987

Dear ***:

Thank you for your letter of December 17, 1986, concerning an exemption
from
the increase in the sales tax rate for a contract entered into prior to
January 1, 1987.

You did not include a copy of the contract, therefore it is not possible
to
determine whether the contract you refer to qualifies for exemption.

In general, if a written contract or written bid for the purchase of
specific
items is signed prior to January 1, 1987, it will qualify until the
original
contract ends or until renegotiated or renewed. All prior contract
exemptions will expire September 30, 1989.

This opinion is based in 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 me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Administration Division.

Sincerely,
Julie Pesl
Tax Policy Section
Tax Administration Division

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