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Ezel / Tax Rulings / TX
TX 8910L0964E03 Sales and/or Use Tax (State,Local,MTA) 1989-10-11

Did resale certificates issued to the previous owner of an acquired business remain valid for the new owner?

Short answer: Generally yes: the purchaser, not the seller, invalidated or revoked a valid resale certificate, so a prior owner's valid certificate carried over to the new owner of an existing business. But the sample certificate supplied was unacceptable after November 24, 1987 because it lacked information Rule 3.285 required.

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This page answers the general question as of 1989. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1989
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

A company acquired an existing business and asked about resale certificates that customers had issued to the prior owner.

The Comptroller said a valid certificate remained valid for the new owner because the purchaser who issued it—not the seller—was the party that invalidated or revoked it.

That did not make every inherited form acceptable. The particular certificate submitted with the request could not be accepted after November 24, 1987 because it lacked information required by Rule 3.285. The Comptroller provided the rule, a sample certificate, and a certificate article for replacement forms.

Common questions

Did an ownership change automatically cancel valid resale certificates? No.

Who could invalidate or revoke a valid certificate? The purchaser that issued it.

Was the submitted certificate acceptable? No. It did not contain all information Rule 3.285 required after November 24, 1987.

Citations and references

  • 34 Tex. Admin. Code Rule 3.285

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller October 11, 1989

Dear ***:

Thank you for your letter dated October 4, 1989, concerning resale
certificates issue to COMPANY ABC, which was acquired by your company.

Resale certificates issued to a previous owner are valid for a new
owner of an existing business. It is the purchaser, not the seller,
who invalidates or revokes a valid certificate.

You should be aware, however, that certificates such as the one
you submitted from ****'s, are not acceptable after
November 24, 1987. It doesn't contain all of the information
required by Rule 3.285. I've enclosed a copy of the rule, which
contains a sample certificate that you can reproduce, and an
article on resale/exemption certificates from the September 1988
Sales Tax Review.

This opinion is based on the facts presented. If there are
additional or different facts, the opinion may change.

Please feel free to contact me if you have any additional
questions. You may write me, call toll-free 1-800-252-5555 (ext.
3-4685) from anywhere in the United States or phone 512/463-4685.

Sincerely,
Julie Pesl
Tax Correspondence

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