Is a computerized 'check-in' calling service — like a wellness check or latch-key-kid monitoring service that automatically calls emergency contacts if someone doesn't respond — subject to Texas sales tax as a security service?

Subject

How Are You Today?/Latch Key Kid Assist — Computerized Monitor Service — Not Required To Be Licensed Under Private Security Act

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9309L1255G06

Plain-English Summary

A taxpayer described a business built around a computer that calls someone on a regular schedule and asks that person a question. When the called party answers the phone, recorded speech stored on the computer is played through the phone, and the person is instructed to press 1 if they are okay or press 0 if they need assistance. If they press 0, the computer records the results and immediately begins calling the emergency numbers listed for the called party.

The Comptroller responded that this service is not subject to sales tax. The letter explains the reasoning: the service would be taxed as a security service only if a license were required under the Private Investigators and Private Security Agencies Act. The Comptroller checked with the State Board of Private Investigators and was told that the service described does not require a license — so it falls outside the taxable security-service category.

The letter closes with the standard caveat that the opinion is rendered based on the facts submitted, and that other facts, though similar, may yield different results.

What This Means For You

Whether a monitoring or check-in service is taxable can turn on licensing status, not just what the service does. This letter shows the Comptroller's test wasn't about the nature of the calls themselves (a scheduled wellness check with an emergency-call trigger) but about whether the provider is required to hold a license under the Private Investigators and Private Security Agencies Act. Because no license was required for this service, it wasn't treated as a taxable security service.

The Comptroller actually verified the licensing question with the regulator, not just the taxpayer's own description. The letter notes the Comptroller "checked with the State Board of Private Investigators" before concluding no license was required. If you offer a similar automated check-in or monitoring service, your own licensing status under Texas private security law is the threshold question — and it may be worth confirming with that board directly, since the Comptroller's answer here depended on that outside determination.

This is a facts-and-circumstances answer, not a blanket rule for all monitoring services. The letter itself says the opinion is based on the facts submitted, and that other facts, though similar, may yield a different result. A service with different features (for example, one requiring a security license, or performed by a licensed private investigator) could come out differently.

Q&A

Q: Is this computerized "check-in" calling service subject to Texas sales tax?
A: No. The letter states the service is not subject to sales tax.

Q: How does the service work, according to the letter?
A: A computer calls someone on a regular schedule and asks a question via recorded speech played through the phone. The called party presses 1 if okay or 0 if they need assistance; pressing 0 causes the computer to record the result and immediately begin calling the emergency numbers listed for that person.

Q: Why isn't the service taxed as a security service?
A: The letter explains it would be taxed as a security service only if a license were required under the Private Investigators and Private Security Agencies Act. The Comptroller checked with the State Board of Private Investigators and was told the described service does not require a license.

Q: Did the Comptroller rely on the taxpayer's own say-so about licensing, or check independently?
A: The letter says the Comptroller checked with the State Board of Private Investigators directly, rather than relying solely on the taxpayer's description.

Q: Does this ruling mean all similar monitoring or "latch-key kid" check-in services are tax-exempt in Texas?
A: Not necessarily. The letter states the opinion is rendered based on the facts submitted, and that other facts, though similar, may yield different results.

Original ruling text

September 1, 1993

Dear ****:

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

My business is based on my computer calling someone on a regular schedule
and asking that person a question. When the called party answers their phone,
recorded speech that is stored on the computer is played through the phone. The
called party is instructed to press a 1 if they are OK or press 0 if they need
assistance. If they press 0 the computer will record the results and immediately
begin to call the emergency numbers listed for the called party.

Response: The service you provide is not subject to sales tax. It would be taxed
as a security service if a license were required under the Private Investigators
and Private Security Agencies Act, but, I checked with The State Board of Private
Investigators and was told that the service you describe does not require a
license.

This opinion is rendered based on the facts you submitted. Other facts, though
similar, may yield different results. If you have questions or need more
information, please call or write. You may reach me by calling toll free,
(800) 531-5441 (ext.34680). My direct line number is (512) 463-4680. The number
for FAX transmissions is (512) 475-0900. You may write to me in care of Tax
Administration Division.

Sincerely,

Al Van Allen
Tax Administration Division

NOTE: Previous Accession Number 93070150L.4 and/or 9307150L