🧪 TEST MODE ACTIVE Use test card: 4242 4242 4242 4242
Ezel / Tax Rulings / TX
TX 8802L0867A13 Sales and/or Use Tax (State,Local,MTA) 1988-02-05

Were pickup, delivery, incoming-freight, and UPS charges taxable when connected with taxable sales, leases, or services?

Short answer: Yes. Beginning October 1, 1987, Texas required sales tax on all transportation charges when the seller sold or leased tangible personal property or provided a taxable service such as repair.

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 February 1988 Texas Comptroller letter applying a transportation-charge rule effective October 1, 1987. The letter does not include its usual fact-change caveat. Freight, delivery, sourcing, sales-price, and taxable-service rules may have changed; verify current law and the present text of Rule 3.303. STAR documents may no longer represent current policy even when not marked superseded. Taxpayer-identifying details 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

Beginning October 1, 1987, the seller had to collect sales tax on all transportation charges connected with selling or leasing tangible personal property or providing a taxable service such as repair.

The request covered pickup and delivery charges, incoming freight, and UPS charges. The Comptroller referred the taxpayer to Rule 3.303.

What this means for you

Under the historical rule, separately identifying a transportation charge did not remove it from tax when it accompanied a taxable property transaction or service.

Common questions

Were pickup and delivery charges taxable? Yes, when connected to the described taxable sale, lease, or service.

Did the answer include UPS and incoming-freight charges? Yes.

When did the stated rule take effect? October 1, 1987.

Citations and references

  • 34 Tex. Admin. Code Rule 3.303 — historical transportation and delivery charges rule.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

February 5, 1988

Dear ***:

On behalf of Mr. Bullock, I hope you'll accept my apology for the delay
in
answering your question regarding information concerning the taxability
of
pick-up and delivery charges. This isn't the way we normally do
business.

Our people were, and still are, swamped by a deluge of inquiries as they
attempted to interpret provisions of the new law and draft rules which
would
not adversely impact businesses. In many instances, an answer to a
question
just wasn't available when the question arrived.

You requested information concerning the taxability of pick-up and
delivery
charges, incoming freight and UPS charges.

As of October 1, 1987, you should collect sales tax on all charges for
transportation when you sell or lease tangible personal property or
provide a
taxable service such as repair. I have enclosed Rule 3.303,
Transportation
and Delivery Charges, for your reference.

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 Telephone Bank Operations.

Sincerely,
Julie Pesl
Tax Policy Division

Get today's answer for your situation

You just read a 1988 ruling on this question. Ezel checks current Texas tax law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.