Is a technical writing service — such as preparing a material safety data sheet on compressed gases — subject to Texas sales tax?

Plain-English summary

A taxpayer asked whether a service of writing a technical document is taxable. The taxpayer had been contracted to write a material safety data sheet (MSDS) on compressed gases, detailing the effects of overexposure to the product, a hazard evaluation regarding the product's handling, storage and use, measures to protect workers at risk of overexposure, and emergency procedures — based on gas mixture composition furnished to the writer.

The Comptroller's answer has three parts:

• Separately-stated charges for developing the document (research, writing, and editing) are not taxable.
• The writer owes tax on the materials and supplies consumed while developing the document.
• Sales of copies of the completed document are taxable.

What this means for you

Technical writers and freelance authors

If you're hired to research, write, and edit an original document (like an MSDS, report, or manual) and you bill that development work as a separately-stated charge, that charge itself is not subject to Texas sales tax. However, you owe tax on the materials and supplies you consume in producing the document (for example, paper, binders, or other supplies used along the way), and if you later sell copies of the finished document to the client or others, those copy sales are taxable.

Businesses commissioning technical documents (e.g., safety data sheets)

Expect your invoice to potentially separate the (non-taxable) writing/editing/research service from the (taxable) sale of the finished copies. Make sure charges are broken out clearly on invoices to get this treatment.

Accountants and tax professionals

This letter illustrates the Comptroller's distinction between an original creative/professional service (writing and editing, not taxable when separately stated) versus the sale of tangible copies of a finished work product (taxable), while also flagging that the vendor still owes use tax on consumable materials and supplies used to perform the service.

Common questions

Q: Is a fee for writing an original technical document, like a material safety data sheet, subject to Texas sales tax?
A: No — if separately stated, charges for the development of the document (research, writing, and editing) are not taxable.

Q: Does the writer owe any tax at all in this situation?
A: Yes — the writer owes tax on the materials and supplies consumed in developing the document.

Q: If the writer later sells copies of the finished document, is that taxable?
A: Yes — sales of copies of the completed document are taxable.

Q: Does it matter that the document was a material safety data sheet on compressed gases specifically?
A: The letter addresses this specific fact pattern (an MSDS based on furnished gas mixture composition), and the Comptroller notes the opinion is based on the facts presented — different facts could change the outcome.

Q: Can another taxpayer rely on this letter for their own similar writing services?
A: No. Letters like this can be the basis of a detrimental reliance claim only for the taxpayer to whom it was directly issued, and the opinion is based on the specific facts presented.

Citations and references

No specific statutes or rule numbers were cited in 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/9606L1418A06

Original ruling text

June 5, 1996

Dear ****:

Thank you for your letter of May 27, 1996. You asked whether your service
to write a technical document is taxable.

As I understand it, you have been contracted to write a material safety data
sheet on compressed gases. The document will detail the effects of
overexposure to the product, a hazard evaluation regarding the product's
handling, storage and use, measures to protect workers at risk of
overexposure, and emergency procedures. You are furnished composition of
the gas mixture and prepare the report based on this information.

Separately-stated charges for development of the technical document (i.e.,
research, writing, and editing) are not taxable. You owe tax on the
materials and supplies consumed in the development of the document.

Sales of copies of the completed document are taxable.

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

You may call me toll free at 1-800-531-5441, ext. 5-0037. The direct line
is 512/475-0037. You also may write to Sales Tax Policy Division,
Comptroller of Public Accounts.

Sincerely,

Lindey Osborne
Sales Tax Policy Division

NOTE: Previous Accession Number 9606353L