A paranormal-research organization offers paid ghost investigations at homes/businesses, presentations to schools about ghost-theory research, and ghost-hunting classes (with optional textbooks). Are any of these services subject to Texas sales tax?

Plain-English summary

An organization dedicated to the scientific study of paranormal phenomena — featured on TV, radio, and in print — asked the Comptroller about the sales tax treatment of three of its services: paid ghost investigations (setting up data-collection equipment at a client's home or business to detect possible energy signatures associated with a haunting), presentations to schools and universities about scientific ghost-theory research, and ghost-hunting classes teaching participants how to find and photograph purported paranormal activity using accepted investigative methods (with optional textbooks).

The Comptroller ruled all three core activities — classes, seminars, presentations, and the ghost investigations themselves — are not taxable. Two things around the edges are taxable, though: any charge separately stated for books or literature sold to students/seminar participants requires collecting sales tax, and the organization itself must pay sales tax on equipment it purchases and uses to perform these nontaxable services (since that equipment is used by the organization, not sold to participants).

What this means for you

Paranormal research/investigation businesses, and similar niche service providers

The Comptroller evaluates unusual services (however novel or unconventional the subject matter) using the same basic taxable-services framework as any other business: investigation, teaching, and presentation activities that don't fall within a defined taxable-service category are not taxable, but any tangible goods (like books) sold alongside them are, and equipment used to perform the service is a taxable purchase for the provider.

Educators, seminar hosts, and presenters generally

If your seminar/class/presentation charges are for the instructional service itself, that revenue is likely nontaxable — but keep book/literature sales separately stated on invoices/receipts, since those specific charges do carry sales tax.

Accountants and tax professionals

This letter is a good illustration that novelty of subject matter doesn't change the analysis: the Comptroller applies the standard taxable-vs-nontaxable-service framework, plus the standard rule that a service provider owes tax on its own equipment purchases used to perform nontaxable services.

Common questions

Q: Are ghost investigation services taxable in Texas?
A: No — this letter confirms ghost investigations, along with related seminars, presentations, and classes, are not taxable services.

Q: Do I need to charge sales tax on textbooks sold alongside a class or seminar?
A: Yes — any separately stated charge for books or literature must have sales tax collected from students or participants.

Q: Does the organization owe tax on equipment it buys to perform these services?
A: Yes — the organization must pay sales tax on equipment purchased and used to perform the nontaxable services, since that equipment isn't sold to participants.

Q: Can I rely on this letter for my own paranormal-research or seminar business?
A: No. It's based on the facts presented, and the letter notes the opinion may change on additional or different facts.

Citations and references

No specific Tax Code section or rule number was cited in this letter; the Comptroller applied the general framework distinguishing taxable services from nontaxable investigation/education/presentation 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/9804235L

Original ruling text

April 2, 1998

Dear *** :

Thank you for your letter of March 27, 1998, concerning the taxability of ghost
investigations, seminars or presentations, and ghost hunts.

GROUP A is an organization that is active in the study of paranormal phenomena
from a scientific viewpoint. You have been featured on a number of TV shows,
radio shows, newspaper articles and were featured in MAGAZINE. You offer the
following services:

Ghost Investigations. You investigate the presence of certain types of energy
that is scientifically supported to be a possible indication that a spirit or
ghost may be present. You are hired by individuals, as well as businesses to
investigate the presence of ghosts in their home or place of business. You set
up equipment at the site that is used to collect data for evaluation purposes
and then the equipment is picked up and used on the next investigation, usually
after 90 days.

Presentations. You make presentations to high schools, colleges and
universities concerning the latest scientific research dealing with ghost
theory.

Ghost Hunts. You conduct ghost hunting classes for people that are interested
in learning more about the science of paranormal investigating. "Ghost hunts
include a history of the hauntings of the *** area as well as teach
participants how and where to have a ghostly experience. Participants will
learn where ghosts currently appear on a regular basis and find out how to find
and photograph them using scientifically accepted methods. Optional textbooks
and suggested reading are available at most bookstores."

Response. Classes, seminars, presentations, and ghost investigations are not
taxable. You would need to collect tax from students or seminar participants
for any separately stated charges for books or literature. In addition, your
firm must pay tax on any purchases of equipment used in the performance of non
taxable services and not sold to participants.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change. You may call me toll free at
1-800-531-5441, ext. 5-0613. The direct line is 512/475-0613. You may also
write to Tax Policy Division, Comptroller of Public Accounts.

Sincerely,

Kevin Koller
Tax Policy Division