A notary public asked the Comptroller to confirm whether the document/record preparation services she performs for lawsuit participants are exempt from Texas sales tax, and whether she's now exempt from collecting sales tax altogether.

Plain-English summary

A notary public wrote the Comptroller asking for a letter confirming the taxability of the services she performs, the specific statute behind any exemption, and whether she was now exempt from collecting sales tax altogether.

The Comptroller confirmed her document/record preparation services for lawsuit participants qualify for the same Tax Code Section 151.353 court reporting services exemption discussed in a companion letter in this corpus (9803400L, issued about two weeks later to a different notary with the same underlying question). That exemption covers documents prepared by a notary public (or licensed court reporter) for use by a suit participant or the court, and sold to a suit participant. Preparation of documents/records for civil or criminal lawsuit participants is therefore not taxable. But the Comptroller was careful to clarify the scope wasn't a blanket exemption from all sales tax obligations: if she performs OTHER, genuinely taxable services unrelated to lawsuit-document preparation — the letter names data processing, word processing, information services, and security services — she still needs to retain her sales tax permit and collect/report tax on those.

What this means for you

Notaries and litigation-document preparers

Preparing documents or records specifically for participants in a civil or criminal suit (or for the court) is exempt under Tax Code Section 151.353 — but that's a narrow, activity-specific exemption, not a blanket exemption from sales tax collection duties for your entire business.

Notaries who perform mixed services

If you also do data processing, word processing, information services, security services, or similar TAXABLE work outside the litigation-document context, you must keep your sales tax permit and collect/report tax on that other revenue, even while your lawsuit-document work stays exempt.

Accountants and tax professionals

This letter is a near-duplicate of 9803400L in this corpus (same exemption, same statute, different notary, issued about two weeks apart) — useful confirmation that the Comptroller applied Section 151.353 consistently across multiple similarly-situated taxpayers in the same period.

Common questions

Q: Is document/record preparation for lawsuit participants exempt from Texas sales tax?
A: Yes, under Tax Code Section 151.353's court reporting services exemption, when prepared by a notary public or licensed court reporter for a suit participant or the court, and sold to a suit participant.

Q: Does this mean I'm completely exempt from collecting sales tax?
A: No — only for the specific lawsuit-document preparation activity. Other taxable services (data processing, word processing, information services, security services, etc.) you perform remain taxable, and you'd need to keep your permit for those.

Q: Can I rely on this letter for my own notary business?
A: No. It's based on the facts presented, and the letter notes other facts, though similar, may provide a different result.

Citations and references

• Tex. Tax Code § 151.353 (court reporting services exemption)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9803322L

Original ruling text

March 12, 1998

Dear Ms. **:

This is in response to your letter to John Fitzgibbons, requesting a ruling
regarding the taxability of services that you perform. You are a Notary Public
and are requesting a letter that addresses the taxability of these services and
the applicable statute that covers this exemption. You are also are asking if
you are now exempt from the collection of sales tax.

Response: Section 151.353 of the Texas Tax Code exempts court reporting
services relating to the preparation of a document or other record in a civil
or criminal suit by a notary public or a court reporter licensed by the State
of Texas Court Reporters Certification Board if the document is:

(1) prepared for the use of a person participating in a suit or the court in
which a suit or administrative proceeding is brought; and
(2) sold to a person participating in the suit.

Therefore, services (preparation of documents or records) that you provide as a
notary public to participants in a civil or criminal lawsuit are not taxable.
You will still need to retain your sales tax permit and collect and report
sales tax if you perform taxable services (i.e., data processing, word
processing, information services security services, etc.) not related to the
preparation of a document or other record in a civil or criminal suit.

This opinion is based on the facts presented. Other facts though similar may
provide a different result. I hope this information answers your questions.
If you need additional information, please call me toll-free at 1-800-531-5441,
extension 3-4502. The direct line is 512/463-4502. You may also write to Tax
Policy Division, Comptroller of Public Accounts. You may also e-mail our tax
help section at:

Sincerely,

Gilbert Zamora
Tax Policy Division

cc: John Fitzgibbons