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Ezel / Tax Rulings / TX
TX 8710L0834F01 Sales and/or Use Tax (State,Local,MTA) 1987-10-13

Was a monthly association fee included in taxable credit-reporting charges, and was collecting overdue city water bills taxable?

Short answer: The monthly fee was taxable as part of the credit-reporting service. Although debt collection was generally taxable, collecting overdue water bills for the city was not.

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 a monthly fee included in credit-reporting service and collection of overdue city water bills. It says the opinion may change if the facts differ. Its distinction between generally taxable debt collection and the described city work is historical and unexplained beyond the stated facts; verify current law and the customer relationship. STAR documents may no longer represent current policy even when not marked superseded.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 monthly association fee was taxable because it formed part of the cost of the credit-reporting service.

The provider also collected overdue water bills for a city. The letter said debt-collection services were generally taxable but no tax was due on those city-debt collections. It gave no further legal explanation for that distinction.

What this means for you

The historical letter included recurring access or association charges in the taxable price of credit reporting. Its city-collection answer is limited to the described overdue municipal water bills.

Common questions

Was the monthly association fee taxable? Yes.

Why? It was part of the cost of the credit-reporting service.

Were debt-collection services taxable? Generally yes according to the letter.

Were the overdue city water-bill collections taxable? No under the stated facts.

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 13, 1987

Dear ***:

When I called you, you asked whether tax was due on the monthly
association
fee. This fee is a part of the cost of the credit reporting service and
is
taxable.

We also discussed your debt collection services. You collect overdue
water
bills for the city. Tax is due on debt collection services, however, no
tax
will be due when you collect overdue debts for the city.

I'm sending an application and rate card under a separate cover.

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,
Adina Whittemore
Tax Policy Division

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