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Ezel / Tax Rulings / TX
TX 8702L0794G11 Sales and/or Use Tax (State,Local,MTA) 1987-02-12

Did a vending company's fixed-price contract with a building owner exempt consumer vending-machine sales from Texas's January 1987 tax-rate increase?

Short answer: No. The vending company had no fixed-price contracts with the consumers buying products, so those sales were subject to the increased rate after January 1, 1987.

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 a specific January 1, 1987 tax-rate increase and a vending company's fixed-price contracts with building owners. It is historical guidance, not a current rate ruling. Verify current vending, retailer, contract, 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 STAR documents may no longer represent current policy even when not marked superseded.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 vending company's fixed-price contracts with building owners did not create prior-contract exemptions for sales to vending-machine customers.

The reason was that the vending company had no contract with the consumers who bought the products. Those retail sales were therefore subject to the increased tax rate after January 1, 1987.

What this means for you

A contract governing where and at what price a vending company operated was not the same as a fixed-price contract with each retail consumer. The prior-contract analysis followed the actual buyer-seller transaction.

Common questions

Did the building-owner contract protect vending sales from the rate increase? No.

Why not? The consumers purchasing products were not parties to that contract.

What rate applied after January 1, 1987? The increased rate then in effect.

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

February 12, 1987

Dear ***:

Thank you for your letter of January 27, 1987, concerning prior contract
exemptions.

COMPANY A is a vending company which bids and is awarded contracts with
fixed prices for products sold through vending machines. Although you
may have a contract with a building owner, etc., to sell products at a
fixed price, you do not have contracts with the consumers who purchase
the product. There is no prior contract in this case, and the sales
are subject to the increased tax rate after January 1, 1987.

This opinion is based upon the facts you presented. If there are addi-
tional or different facts, this opinion may change.

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

Sincerely,
Julie Pesl
Tax Policy Section
Tax Administration Division

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