Which training-company charges did Texas treat as taxable sales or materials and which seminar, delivery, or consulting fees were nontaxable?

Plain-English summary

The Texas Comptroller classified a training company's numbered charges as follows:

• Item 1 sales were taxable.
• Item 2 charges for training materials were taxable.
• Item 3.A, a fee for attending a seminar, was nontaxable. The company also owed no Texas tax on the cost of materials it used in giving that seminar to Texas clients.
• Item 3.B's customer charge was exempt, but the company owed Texas tax on materials or supplies used to conduct the training at a Texas location.
• Item 3.C fees were nontaxable.
• Shipping and handling for materials was taxable.

The attached taxpayer letter says its business categories were material sales, implementation sales, an instructor-certification seminar fee, an on-site instructor-certification delivery fee, and consulting. But the original numbered request is absent, so the record does not conclusively show which attached label corresponds to every numbered subpart.

What this means for you

The letter distinguishes charges to the customer from tax the training provider owed on supplies it consumed. A customer-facing training charge could be exempt even while the provider owed tax on materials used at a Texas training location.

Common questions

Were sales of training products taxable? Yes.

Were charges for training materials taxable? Yes.

Was a seminar-attendance fee taxable? No, for item 3.A.

Could the provider owe tax even when the customer charge was exempt? Yes. Under item 3.B, the provider owed tax on materials or supplies used for training at a Texas location.

Was shipping and handling for materials taxable? Yes.

Can every numbered answer be matched with certainty to the attached price-list categories? No. The original numbered request is not part of this STAR record.

Citations and references

• No statute or administrative rule is cited in the letter.
• The taxpayer attachment identifies its commercial labels, while the Comptroller response supplies the numbered tax treatments.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8704L0819E12

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller April 28, 1987

Dear ***:

Thank you for your recent letter and enclosed sales literature explaining
your company's products and services. The following outlines your
company's
Texas sales and use tax responsibilities for the numbered items in your
letter of March 3.

1. Sales of these items are taxable.

2. These charges are for training materials and are subject to tax.

3.A. This fee is for attending a seminar and is not taxable.
Additionally, no Texas tax is due on the cost of materials
used by your company in giving the seminar to Texas clients.

B. The charge to the customer is exempt. However, your company
owes Texas tax on any materials or supplies used in conducting
the training at a Texas location.

C. These fees are not taxable.

I'd also like to bring to your attention that a charge for shipping and
handling materials is taxable.

I have enclosed several rules and brochures that should help you
determine
the correct tax rate to report.

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 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,
Sandi Skaggs
Tax Policy Section
Tax Administration Division

March 25,1987

Ms. Sandy Skaggs
Texas State Treasurer
Tax Policy Division
PO Box 13528
Austin, TX 78711

Dear Sandy,

Per our telephone conversation on March 25th, I am enclosing a
price list of one of ***'s products and a copy of our
corporate profile to help you understand who we are.

In my letter dated March 9th, I made reference to three types of
sales: Material Sales, Implementation Sales, and Training Fees.
Let me explain how these three types of sales relate to the price
list.

The prices vary for each product but the price list outline is
the same.

Material Sales represent Complete Participant Fees, Additional
Unit Fees, Start-Up Participant Fees, Additional Unit Workbooks,
Management Support Fees, Additional Materials, and Individual
Participant Materials.

Implementation Sales represent Total System Fees and the Start-Up
System Fees.

The Training seminar Fee is the Instructor Certification Fee.

The Delivery Fee is the On-Site Instructor Certification Fee.

The Consulting Fee is listed as such on the price list.

I hope this letter will clarify any confusion, but if there are
any other questions I can be reached at ***.

Sincerely,