Skip navigation
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts


Tax Policy News

November 2017

The Comptroller's office publishes this online newsletter to keep you informed about Texas taxes. Tax Policy News provides general information and is not a substitute for legal or other professional advice.

Previous issues are available through the Tax Policy News Index.

In This Issue...


Declared Natural Disasters and Texas Taxes

As communities continue to deal with the effects of Hurricanes Harvey and Irma, we want to remind you the Comptroller’s office provides tax help information and resources on our Declared Natural Disasters and Emergencies Tax Help webpage.

Sales Tax

Fishing and Hunting Guide Services

Texas is home to some of the best fishing and hunting spots in the country. Many Texans use guide services to enhance their fishing and hunting experiences.

Guide Services

A fishing or hunting guide service refers to someone who provides expertise in finding preferred fishing or hunting locations. A guide may also teach customers how to improve their skills.

Charges for fishing and hunting guide services are not taxable.

Guides must pay sales tax when buying equipment and supplies they use to provide their services when these items are not resold to their clients.

These items include, but are not limited to:

Perishable bait (both live and frozen) and feed for wildlife are exempt from tax.

Hunting Leases

Tax is not due on the amount a guide or hunter pays a property owner for rights to use their land for hunting, typically referred to as a hunting lease.

Sales or Rentals of Taxable Items

When a guide sells or rents taxable equipment or supplies (such as fishing gear, firearms, ammunition and clothing) to their customers, or sells hunting or fishing package deals that include lodging or other services, how the guide bills (invoices) the customer determines the guide’s overall state tax responsibilities.

Separated Invoices

When a guide separately charges for sales or rentals of equipment and supplies, the guide must have a Texas Sales and Use Tax Permit and must charge sales tax on sales or rentals of equipment and supplies.

The guide can give Form 01-339, Texas Sales and Use Tax Resale Certificate (PDF), to the supplier instead of paying tax when buying items they sell or rent to customers.

Lump-Sum Invoices

When a guide charges a lump-sum amount for the guide service and for sales or rental of equipment and supplies, the guide is considered the end consumer of the equipment and supplies and must pay sales tax to the seller on their purchases. The guide does not charge tax to their customer. Additionally, a guide cannot give a resale certificate to the seller and does not need to have a Texas Sales and Use Tax Permit for lump-sum invoicing.

Package Deals That Include Lodging

There are additional tax responsibilities for guides who offer package deals that include lodging. Texas charges a 6 percent state hotel occupancy tax (hotel tax) on lodging charges for fewer than 30 consecutive days.

Guides who are responsible for charging hotel tax must submit a Form AP-102, Texas Questionnaire for Hotel Occupancy Tax (PDF), to the Comptroller’s office to register to collect the 6 percent state hotel tax.

Some local taxing jurisdictions collect their own local hotel occupancy tax. Local hotel taxes are not paid or reported to the Comptroller’s office. Guides should contact their county and municipal officials to determine their local hotel tax responsibilities.

Separated Invoices

Hotel tax is due on:

  • a charge for lodging; and
  • a single charge for lodging and meals.

Sales tax is due on:

  • a separate charge for meals; and
  • a charge for equipment or supplies sold or rented to the customer.

Tax is not due on:

  • a charge for fishing or hunting guide service; or
  • a charge for a hunting lease.
Lump-Sum Invoices

Hotel tax is due on the total charge for a lump-sum hunting or fishing package that includes lodging. A guide who provides lodging must pay sales tax on the purchase of items that are provided to customers as part of a lump-sum charge.

More Information

Spa Services and Sales – What is Taxable?

Many spas offer more than just relaxing services – they also provide retail areas offering everything from body care items to gifts. Spa services are generally not taxable, but most of the products a spa sells are taxable.

Nontaxable Spa Services

These services include spa treatments, such as:

  • facials
  • scalp and hair treatments
  • body wraps
  • massages
  • waxing
  • tanning
  • makeup application
  • hair styling
  • manicures and pedicures

Taxable Items Used in Nontaxable Spa Services

When providing nontaxable services, a spa owes tax when buying the items it uses to provide those nontaxable services, such as:

  • hair care items
  • lotions and oils
  • wax
  • nail care products
  • makeup
  • paper products
  • towels
  • gowns

Taxable Items Sold to Customers

If a spa sells items separately to its customers, the spa must collect sales and use tax on those items.

These items include, but are not limited to:

  • candles
  • jewelry
  • gift items
  • false eyelashes
  • hair/body products
  • makeup
  • makeup brushes
  • clothing

When buying items to resell to its customers, a spa can give Form 01-339, Texas Sales and Use Tax Resale Certificate (PDF), to its suppliers instead of paying tax.

Food and Beverages – Taxable and Nontaxable

Food and beverages a spa sells may be taxable.

Taxable items include:

  • items that are sold in a cup (smoothies, coffee, tea, juice)
  • prepared or heated food (sandwiches, salads, tacos)
  • bakery items sold heated or with utensils (plates, forks, spoons)
  • bottled sodas, energy drinks, flavored water or sports drinks
  • candy
  • snack items (chips, nuts, crackers) when less than 2.5 ounces or not more than one serving

Nontaxable food items include:

  • packaged whole bean or ground coffee
  • tea bags or loose leaf tea
  • unflavored water (including spring, sparkling or mineral water)


Memberships to a spa that provides nontaxable services are not taxable. For example, a $50 monthly spa membership provides you one massage and a discount on other spa services, such as facials or waxes. Another example is a $60 membership to a tanning facility that offers unlimited tanning sessions.

A health club or spa with amusement facilities, such as exercise equipment, saunas, pools and hot tubs, is required to collect sales tax on its membership charges. The memberships are taxable sales of amusement services. A health club or spa, however, does not collect sales tax from its members on separate charges for nontaxable services such as a haircut, facial, manicure or massage.

More Information

Private Letter Rulings

Sales and Use Tax

Taxability of a Ground Lease for Motor Vehicle Inventory by a Franchised Motor Vehicle Dealer
May 12, 2017

The Comptroller’s office ruled that a franchised motor vehicle dealer licensed by the Texas Department of Motor Vehicles (TxDMV) does not owe sales and use tax on a ground lease of real property that the dealer uses to store motor vehicles held in inventory.

When a franchised motor vehicle dealer licensed by the TxDMV leases or rents real property on which it operates its dealership, no part of the charge is attributable to a parking or storage service. Although the dealer stores inventory on the leased property, the dealer is not leasing or renting a parking facility; the leased premises are not a location where parking is provided for a fee. In addition, the lessor does not provide any “element of service.” The lessor does not provide parking attendants, security, cleaning or maintenance. In this case, the dealer is responsible for the operation and maintenance of the premises.

A lease of real property and improvements (including a parking lot or garage) is only taxable if some part of the rental amount is attributable to a motor vehicle parking and storage service. The ground lease between the dealer and the lessor is the lease of real property and is not subject to Texas sales and use tax.

See State Tax Automated Research (STAR) System letter 201705004L.

Taxability of Charges for the Use of Mobile Point-Of-Sale Devices and Fees for Premium Content Paid For by Restaurant Patrons
May 16, 2017

A taxpayer operates casual dining establishments with locations in Texas. The taxpayer contracts with a vendor to provide mobile point-of-sale devices (devices) to be used in the taxpayer’s restaurants. The vendor charges the taxpayer a per-unit monthly charge for use of the devices.

In addition, premium content, which includes games, videos, news, sports and music, is stored on the devices. The taxpayer’s patrons pay to access the premium content and the taxpayer collects a fee.

The taxpayer asked if the monthly per-unit charge it pays to the vendor for use of the devices is a nontaxable service or the rental of a taxable item. The Comptroller’s office ruled the monthly per-unit charges the vendor bills to the taxpayer for use of the mobile point-of- sale devices are taxable as payments for the rental of tangible personal property.

In this case, the taxpayer is contracting with the vendor to rent the devices. The primary purpose of the taxpayer’s rental is to have the devices at its tables to facilitate patrons’ order placement and payment. Any services that the vendor provides are minor to the rental of the property.

Additionally, the taxpayer asked if the premium content fees the taxpayer’s patrons pay are the rental of a taxable item, an internet access service or a telecommunication service. The Comptroller’s office ruled the fees patrons pay for access to the premium content on the mobile point-of-sale devices are taxable as amusement services.

Patrons pay the premium content fee to access premium content including games, videos, news, sports and music, which are stored on the device. The fees for access to electronic games and associated content meet the definition of amusement services, and are subject to Texas sales and use tax.

See State Tax Automated Research (STAR) System letter 201705005L.

Public Notice

Breastfeeding Rights

As required by the 84th Legislature's House Bill 1, the Comptroller's office is reminding readers that all mothers have the right to breastfeed their babies without interference or restriction of that right.

Online Marketplace Seller Voluntary Disclosure Initiative – Application Deadline Extended

In the October issue of Tax Policy News, we told you about Texas participating in a voluntary disclosure program for online marketplace sellers through the Multistate Tax Commission (MTC).

The deadline for qualifying taxpayers to apply to participate in this limited-time program has been extended to Nov. 1, 2017.

For more information, see our website and the MTC website.



The Comptroller's office proposed the following rule for public comment through the Texas Register:

State and Local Sales and Use Tax

Rule 3.287 – Exemption Certificates
Publication date – Nov. 10, 2017
Comment period ends – Dec. 10, 2017


The Comptroller's office filed the following rule for adoption with the Secretary of State:

State and Local Sales and Use Tax

Rule 3.285 – Resale Certificates; Sales for Resale
Publication date – Oct. 27, 2017
Effective date – Nov. 1, 2017

More Information

Help is just a click away! Use our website to take care of business.


The Taxes webpage has links to

  • all Texas taxes and fees
  • resources for taxpayers
  • filing and paying taxes
  • tax laws and rules
Taxpayer Seminars and Videos

We host free taxpayer seminars across the state about the tax responsibilities of buyers, sellers and service providers.

Our Video Library has online tutorials on tax-related topics as well as information about our office.

Practitioners’ Corner

The Practitioners’ Corner is a one-stop resource for information about filing and paying taxes, links to tax research sources and searchable databases.

HB855 Browser Statement

In 2015, the Texas Legislature passed House Bill 855, which requires state agencies to publish a list of the three most commonly used Web browsers on their websites. The Texas Comptroller’s most commonly used Web browsers are Google Chrome, Microsoft Internet Explorer and Apple Safari.

We support: