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Ezel / Tax Rulings / TX
TX 8811L1032G13 Sales and/or Use Tax (State,Local,MTA) 1988-11-14

When was seismic data delivered on tape nontaxable information versus a taxable sale of copy tapes?

Short answer: A tape carrying newly furnished nontaxable seismic information was not taxable. Copy tapes of information the customer already owned were taxable tangible property.

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 an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
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

When the seller furnished nontaxable seismic information on a tape, the tape medium did not turn the information sale into a taxable transaction.

When the customer already owned the information and bought additional tape copies, Texas treated the transaction as a taxable sale of tangible personal property rather than information.

A tape copy shipped to an out-of-state location was not subject to Texas sales tax. Tax applied when the customer picked up the tape in Texas, even if the customer later carried it out of state.

Common questions

Did using tape make original seismic information taxable? No.

Were copy tapes taxable? Yes when the customer already owned the information.

What if the copy was shipped out of state? The letter said no Texas tax was due; Texas pickup was taxable.

Source

Original ruling text

Comptroller of Public Accounts
State of Texas
Austin, Texas 78774

Bob Bullock
Comptroller

November 14, 1988

Dear *****:

Mr. Bullock has asked me to respond to your letter on geophysical ser-
vices and copies.

In your first situation you are furnishing nontaxable information, the
seismic data, on a tape medium. Simply because a tape medium is being
used does not make the sale taxable.

The second situation is taxable. In this situation you are not selling
nontaxable information because your customer already has the informa-
tion. You are in fact selling tangible personal property, the copy
tapes.

Texas sales tax is not due when you ship a tape copy to an out of state
location. Tax would be due if the customer came into Texas to pick up
the tape copy even if they transported it out of Texas.

If you need additional information, please contact our staff in Tax Cor-
respondence Section. You may call toll free 1-800-252-5555.

Sincerely,
Dan Pearson
Deputy Comptroller

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