Is selling pooled telephone survey data taxable in Texas, and does modifying that data for a specific client change the answer?

Plain-English summary

The taxpayer wrote to the Comptroller about a client who was going into the business of conducting random telephone surveys for a specific industry. The survey information would be pooled and then modified for each specific client, and the same pool of information would be made available to other clients who had inquiries for it.

The Comptroller answered three questions. First, selling the pooled information to a specific client without any modification is a taxable transaction. Second, modifying the pooled information for a specific client does not make the transaction non-taxable — it stays taxable. Third, because a taxable transaction occurs in this scenario, the multi-state benefit for services is applicable.

What this means for you

Businesses that pool and resell survey or research data

If you sell survey information drawn from a shared pool to multiple clients, that sale is a taxable transaction in Texas, whether you sell the raw pooled data as-is or you customize/modify it for a particular client's needs. Modifying the data for a client does not convert the sale into something non-taxable.

Businesses with clients located in multiple states

Because the letter confirms this is a taxable transaction, it also confirms that the multi-state benefit for services applies. That means a business in this situation should look at how the multi-state benefit provision affects the taxable portion of the charge when the service benefits locations both inside and outside Texas.

Common questions

Q: If pooled survey information is sold to a client with no changes made, is that taxable?
A: Yes. The letter states this is a taxable transaction.

Q: Does modifying the pooled information for a specific client make the sale non-taxable?
A: No. The letter specifically answers that modifying the information for a client does not make the transaction non-taxable.

Q: Does the multi-state benefit for services apply to this type of transaction?
A: Yes, according to the letter, if a taxable transaction has occurred (as described above), the multi-state benefit for services is applicable.

Citations and references

No specific statutes or administrative rules are cited in the text of this letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9503L1337F11

Original ruling text

March 8, 1995

Dear **:

On February 28, 1995, you wrote requesting a ruling on a client who is going
into the business of doing random telephone surveys for a specific industry.
The information would be pooled and modified for each specific client. The
same pool would be available to other clients which have inquiries for this
information.

You asked the following questions:

1. Would the pooled information sold to a specific client without modification
   be a taxable transaction?

Answer: Yes

2. Would modifying the pooled information for a specific client make the
   transaction non-taxable?

Answer: No

3. If a taxable transaction has occurred above, is the multi-state
   benefit for services applicable?

Answer: Yes.

I hope this satisfactorily answers your inquiry. Should you have
any further questions, please contact me.

Sincerely,

Wade Anderson
Assistant Director, Tax Administration

NOTE: Previous Accession Number 9503969L