Were typing and secretarial charges taxable when performed with a computer or memory typewriter rather than a manual typewriter?

Plain-English summary

The Comptroller treated typing letters with a computer as taxable data processing. The service provider had to obtain a sales tax permit and collect tax on the full client charge, including charges for copies and report covers.

Paper and report covers could be bought for resale if their care, custody, and control passed to the client, under the rule cited in the letter. By contrast, typing performed on a manual, non-memory typewriter was not taxable, and the provider had to pay tax when buying its supplies.

STAR now displays an alert directing readers to the version of Rule 3.285 amended November 1, 2017 for current guidance about care, custody, and control of tangible personal property used in a taxable service.

Common questions

Was computer typing taxable? Yes. The letter classified it as taxable word-processing or data-processing service.

Were copies and report covers taxable too? Yes, when charged to the client under the stated arrangement.

What about a manual typewriter? Typing on a manual, non-memory typewriter was not taxable; the provider paid tax on its supplies.

Citations and references

• 34 Tex. Admin. Code Rule 3.330(c) (Data processing services)
• 34 Tex. Admin. Code Rule 3.312(b) (Printing)
• STAR alert referring readers to Rule 3.285 as amended November 1, 2017

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9003L0995C10

Original ruling text

ALERT: For specific guidance relating to the care, custody and control of TPP when providing a taxable service, please see Rule 3.285, Resale Certificates; Sales for Resale amended 11/01/2017.

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

March 27, 1990

Dear ****:

We received your letter questioning whether secretarial services
are taxable. Data processing services, which includes word
processing, are taxable.

If your services consist of typing letters for clients using a
computer, then you must obtain a tax permit and collect tax on the
total charge to your client. You must also collect tax on any
charge for copies. If you decide to supply report covers to your
client, then you must collect tax on the charge for the report
covers. See the enclosed Rule 3.330 relating to data processing
services.

A tax permit application will be mailed to you under separate
cover. You may return the application with your $25.00 permit fee
through the mail or you may take it to one of the field offices
listed on the enclosed "Tax Help" brochure.

You may issue a resale certificate in lieu of tax to suppliers of
tangible personal property, such as paper or report covers, if
care, custody, and control of the property is transferred to your
client. See the enclosed rule 3.330 section (c).

If your typing services are performed on a manual typewriter, not
a memory typewriter, then your charge for your typing services is
not taxable and you must pay tax on your supplies upon purchase.
See the enclosed Rule 3.312, relating to printing, section (b).

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

If you have any questions you may call or write Tax
Correspondence. You may call toll free 1-800-252-5555, or our
regular number is 512/463-4600. My extension is 3-4658.

Sincerely,
Sherry Buckley
Tax Correspondence