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Ezel / Tax Rulings / TX
TX 8801L0864F13 Sales and/or Use Tax (State,Local,MTA) 1988-01-25

Was a fixed-fee service monitoring only high water levels for an oil company taxable as security or telecommunications service?

Short answer: No. Texas treated the described high-water alarm monitoring charge as neither a security service nor a telecommunications service.

Apply this to your situation

This page answers the general question as of 1988. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1988
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 January 1988 Texas Comptroller letter. It says the opinion may change if the facts differ and cites no statute or rule. The result rests on an alarm that only reported high water, had no theft or burglary function, used the monitor's own telephone and expenses, and left repairs directly between the oil company and repair provider. Alarm-monitoring, telemetry, telecommunications, security-service, oilfield, and fixed-fee rules may have changed; verify current law. STAR documents may no longer represent current policy even when not marked superseded.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 monitor's home telephone received an alarm when an oil company's water level became too high. The monitor then called the person on duty. The oil company paid a fixed fee regardless of alarm count.

The alarm had no theft or burglary function. The monitor owned and paid the expenses and taxes for the telephone, while the oil company arranged and paid for alarm-system repairs directly.

The Comptroller said the monitoring charges were not taxable as security service or telecommunications service.

What this means for you

The historical classification followed the alarm's limited high-water function and the service arrangement rather than the mere use of an alarm and telephone.

Common questions

Was the monitoring fee taxable as security service? No.

Was it taxable telecommunications service? No.

Citations and references

The letter cites no numbered statute or rule.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

January 25, 1988

Dear *:

Thank you for your recent letter which is restated with response below.

I operate a monitoring alarm service for ****.
This alarm is connected to my telephone at my resident. The way
it operates is when the water level gets so high the alarm will
come in at my house on my telephone then I will call whoever in on
call for ******.

I provide this service at a set fee to **** regardless of
the amount of alarms that come in each month.

I own the telephone that this alarm comes in on. I also pay all
expenses and taxes on this phone.

Any repairs that are required on the alarm system at ****
is arranged between *** and the repair service. The
repair service bill is sent directly to *****. I have
nothing to do with it.

This monitoring alarm system has nothing to do with any thefts or
burglars on **** property. The monitoring alarm system
only goes off due to the water level being high.

Response: Your charges to the oil company are not taxable as a security
service or a telecommunications service.

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,
Al Van Allen
Tax Policy Division

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