Does a process server who files court documents and pulls certified copies of court records owe sales tax on those services?

Subject

Govt Document/Record — Obtain From Public Agency — Fee Charged/Billed To Clients Over And Above Cost Of Obtaining Document

Plain-English summary

A process-server-type business asked the Comptroller whether its services were taxable. The business described its work as serving citations, subpoenas, summons, temporary restraining orders, and writs, filing documents, and also researching court records and requesting certified copies for clients.

The Comptroller split the answer into two parts:

• Filing or serving legal documents (citations, subpoenas, summons, temporary restraining orders, writs, and filing documents) is not a taxable service.
• Researching court records and requesting certified copies is not in and of itself a taxable service. However, tax is due on any amount the business bills a customer that is over and above the actual cost of obtaining information the agency is required to furnish under the Open Records Act. The letter points to Subsection (d)(3) of Rule 3.342 as the controlling provision.

As with other STAR letters of this era, the Comptroller notes the opinion is based on the facts presented and could change if the facts are different.

What this means for you

Process servers and court-filing services

Serving citations, subpoenas, summons, temporary restraining orders, and writs, and filing documents with a court, is not taxable. You do not need to collect sales tax on those fees.

Businesses that pull court records or certified copies for clients

Simply researching court records or requesting certified copies is not, by itself, a taxable service. But if you charge your client more than what it actually cost you to obtain the document from the public agency under the Open Records Act, tax is due on that markup — the amount billed over and above the pass-through cost.

Accountants and tax professionals

The dividing line in this letter is the markup, not the underlying activity. Rule 3.342(d)(3) is the specific provision cited for taxing charges above the cost of obtaining Open Records Act information; the retrieval or research activity itself is not what's taxed.

Common questions

Q: Is filing or serving legal documents like subpoenas and writs subject to sales tax?
A: No. The letter states this is not a taxable service.

Q: Is researching court records or obtaining certified copies for a client taxable?
A: Not by itself. It only becomes taxable to the extent you bill the customer more than the actual cost of obtaining the document under the Open Records Act.

Q: What if I only charge my client exactly what the agency charged me for the copy?
A: The letter says tax is due only on amounts billed "over and above" the cost of obtaining the information — a pass-through at cost would not create the markup the letter addresses.

Q: Could this answer change under different facts?
A: Yes — the letter states the opinion is based on the facts presented, and could change if there are additional or different facts.

Citations and references

Statutes and rules:

• 34 Tex. Admin. Code § 3.342(d)(3) (Rule 3.342, information services)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9608L1429F02

Original ruling text

August 29, 1996

Dear ***:

Thank you for your letter of August 23, 1996. You
asked that we address the taxability of your services.

You stated that your services include serving
citations, subpoenas, summons, temporary restraining orders, writs, and filing
documents. You also research court records and request certified copies for
clients.

Filing or serving the legal documents listed above is
not a taxable service. Researching court records and requesting certified
copies is not in and of itself a taxable service. However, tax is due on
charges you bill your customer over and above the cost of obtaining information
required to be furnished pursuant to the Open Records Act. Please refer to
Subsection (d)(3) of Rule 3.342.

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 9608544L