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Ezel / Tax Rulings / TX
TX 8710L0834D13 Sales and/or Use Tax (State,Local,MTA) 1987-10-14

Could an insurance adjuster issue a resale certificate when another adjuster worked a loss, and how should the rebilled service be taxed?

Short answer: The adjuster could issue a resale certificate to the subcontracted adjuster but had to charge sales tax when rebilling the service to its customer.

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 is a taxpayer-specific October 1987 Texas Comptroller letter about an insurance adjuster's subcontracted loss work and customer rebilling. It says the opinion may change if the facts differ. Its resale-certificate treatment is historical; verify current taxability and documentation 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 STAR documents may no longer represent current policy even when not marked superseded.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

An insurance adjuster hired another adjuster to work a loss and then rebilled that service to its customer. The Comptroller said the hiring adjuster should issue a resale certificate to the subcontracted adjuster instead of paying sales tax.

The hiring adjuster then had to charge sales tax to its customer when it rebilled the subcontracted service. The letter also said the adjuster's resale certificate could be copied for use.

What this means for you

The historical letter treated the subcontracted adjustment service as a resale. Tax was not paid to the subcontractor; it was collected when the primary adjuster rebilled the customer.

Common questions

Did the primary adjuster pay sales tax to the subcontracted adjuster? No. It issued a resale certificate.

Did the primary adjuster collect sales tax from its customer? Yes, when rebilling the service charge.

Could the resale certificate be copied? Yes according to the letter.

Citations and references

  • No statute or rule number is cited in the ruling text.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

October 14, 1987

Dear **:

Thank you for your letter of September 16, 1987, concerning your sales
tax
responsibilities as an insurance adjuster.

You should issue a resale certificate instead of paying the sales tax to
another insurance adjuster that works the loss. You should charge
sales tax
to your customer when you rebill the charge for the service.

The resale certificate you have may be copied for use.

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 Policy Division.

Sincerely,
Eddie C. Washington
Tax Policy Division

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