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Ezel / Tax Rulings / TX
TX 8712L0852D01 Sales and/or Use Tax (State,Local,MTA) 1987-12-18

Did Texas base the October 1, 1987 transition for taxing insurance services on when the service was performed or when it was billed?

Short answer: The service date controlled. Services performed before October 1, 1987 were not taxable even if billed on or after that date, while services performed on or after October 1 were taxable.

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 December 1987 Texas Comptroller letter based on facts supplied in an incoming letter that is not reproduced. It says the opinion may change if the facts differ. The October 1, 1987 transition date and the insurance-service classification are historical and do not state current law; verify present 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 STAR documents may no longer represent current policy even when not marked superseded.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 Comptroller used when the insurance service was performed, not when the bill was issued, to apply the October 1, 1987 transition.

Services performed before October 1 were not taxable, including when the bill was issued on or after October 1. Services performed on or after October 1 were taxable.

What this means for you

Under this historical transition rule, delaying or advancing the invoice did not change the result. The service date determined whether the new tax treatment applied.

Common questions

Was a pre-October service taxable if billed after October 1? No.

Was a service performed on or after October 1 taxable? Yes.

Did the billing date control? No. The letter's answer turned on when the service was performed.

Citations and references

  • No statute or administrative rule is cited in the letter text.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller December 18, 1987

Dear *:

Thank you for your patience in awaiting this reply to your letter
regarding
the sales tax on insurance services.

Based on the facts presented in your letter, sales tax would not be due
on
bills issued for services performed before October 1, 1987, but sales tax
would be due on bills issued for services performed on or after October
1,
1987. Sales tax is not due on bills issued on or after October 1, 1987,
for
services performed before October 1, 1987.

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 our
toll-free
number 1-800-531-5441. 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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