The Texas Comptroller of Public Accounts publishes this newsletter to keep you informed about Texas taxes. Tax Policy News provides general information and is not legal or professional advice.
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The Tax Policy Division is seeking candidates for the following positions:
As a member of the Tax Policy Division, you’ll help fulfill our mission to research and interpret tax policy and provide accurate, consistent and timely tax information to taxpayers, tax professionals, state officials, Texas citizens and agency personnel.
Our agency workforce is as diverse as the people of Texas we serve. We value our employees and take very seriously our collective commitment to public service. Personal development opportunities are strongly encouraged through available workshops, teambuilding exercises and on-the-job training. And, we also offer a flexible schedule that helps maintain a healthy work-life balance.
Coin-operated amusement machine owners and operators must file renewal applications for their 2023 general business license, registration certificate, import license or repair license by Nov. 30, 2022. A $60 occupation tax permit for each coin-operated amusement machine that is exhibited or displayed in this state is also due by Nov. 30. An occupation tax permit decal must be affixed to each machine in use.
Under Occupations Code Section 2153.154 and Section 2153.405, the Comptroller’s office may not refund the license fee once a license is issued, nor refund the occupation tax to an owner who ceases to exhibit or display a coin-operated machine before the end of the calendar year for which the tax is imposed.
The Comptroller's office mailed renewal application packets in early October. Coin-operated amusement machine owners and operators who have not received renewal packets by Oct. 31 should contact our office at 512-463-3731.
E-cigarette retailers, cigarette/tobacco retailers and cigarette/tobacco non-retailers may renew or apply for permits through the Comptroller’s Webfile system. With Webfile it’s easy to submit applications and fees electronically from the convenience of a home or office without the delays associated with mailing paper applications and checks.
A payment-only option has been added to greatly improve application processing time. You can submit a standalone payment via Webfile without having to mail a check or visit a field office, thereby avoiding delays in the issuance of a permit.
Motor carriers may apply for an IFTA license through the Comptroller’s Webfile system. With Webfile it’s easy to submit the application electronically from the convenience of a home or office without the delays associated with mailing paper applications.
A person in the business of selling, renting or leasing motor vehicles may deduct the fair market value of a retired vehicle that is titled in Texas from the total consideration paid for a replacement vehicle.
The FMVD reduces the motor vehicle tax liability due on the replacement vehicle. Currently, the FMVD from a retired vehicle must be used within 18 months after it is removed from service and offered for sale.
The Comptroller recognizes the current difficulty in finding replacement vehicles, and as a result, the Comptroller is extending the 18-month timeframe. A person in the business of selling, renting or leasing motor vehicles will now have an additional 12 months to purchase a replacement vehicle for vehicles retired in 2022.
For example, if a dealer retired a vehicle June 30, 2022, the dealer has until Dec. 30, 2024, to deduct the FMVD from the total consideration or purchase price paid for a replacement vehicle.
A person in the business of selling, renting or leasing motor vehicles must maintain records necessary to document when the vehicle was retired, the vehicle’s fair market value, and the time that the FMVD was used.
Insurance Taxes Frequently Asked Questions (FAQs)
Summary: The FAQs were updated with information on the purpose and collection of the Motor Vehicle Crime Prevention Authority Fee and the Volunteer Fire Department Assistance Fund Assessment.
The Comptroller’s office proposed the following rule for public comment through the Texas Register.
The Comptroller’s office filed the following rule for adoption with the Secretary of State. You may view the effective rules on the Texas Administrative Code webpage.
STAR provides viewing and downloading of redacted letter rulings, hearings, rules, Attorney General’s Opinions, etc. To see the latest items added to our State Tax Automated Research (STAR) system, use the New Documents link on the STAR home page in the blue menu bar.
The Monthly Updates Search Form defaults to the current month and "All Taxes." Use the pull-down menu to choose a different month or a particular tax. Selecting "All Taxes" brings up the documents organized by tax type.
Tax Policy issued a memo to the Audit Division summarizing agency policy regarding sales tax on wrapping and packaging supplies after the district court ruling in Dish Network, LLC v. Hegar (Cause No. D-1-GN-17-005821). The court held that Dish was not entitled to a refund of sales tax on its purchases of wrapping and packaging supplies. The packaged items were not "component part[s] of tangible personal property manufactured, processed, or fabricated for ultimate sale" as tangible personal property as required by Texas Tax Code Section 151.318(a)(1). Instead, the packaged items were used in providing a taxable service.
Additionally, the court confirmed that manufacturers would not be entitled to a refund of sales tax on items of wrapping and packaging "not transferred to the customer" because the items were not "component part[s] of tangible personal property manufactured, processed, or fabricated for ultimate sale" citing again to Section 151.318(a)(l). Dish did not appeal the decision; therefore, the decision is final.
Tax Policy issued a memo to the Audit Division on whether credit rating services are subject to Texas sales and use tax. Compiling credit history or other information bearing on a person’s credit worthiness, credit standing or credit capacity is a taxable credit reporting service.
Credit rating agencies assign ratings to entities or debt obligations indicating the likelihood that debts will be repaid. Agencies may rate the creditworthiness of issuers of debt obligations, such as business and governmental entities, or the debt obligations themselves, including corporate and government bonds or pools of loans issued as securitized debt instruments.
Under Chapter 311, Texas Government Code, "person" includes a "corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity." Developing a credit rating for these entities is the compilation of information bearing on a person’s credit worthiness and is a taxable credit reporting service.
Debt obligations such as bonds do not meet the definition of a person. Developing a credit rating for a debt obligation is therefore not a credit reporting service and is not taxable.
The Comptroller’s office responded to a private letter ruling request on issues related to the Texas miscellaneous gross receipts tax (MGRT) and sales tax.
The taxpayer asked whether certain receipts related to Winter Storm Uri are included in gross receipts for the MGRT. Additionally, the taxpayer requested guidance on collecting sales tax on a single charge that includes both taxable and nontaxable amounts and asked if the exclusion under Texas Tax Code Section 182.022(d) applies to the sale of natural gas to a public school district.
The Comptroller’s office concluded that the amounts in question are not included in gross receipts for the MGRT. Regarding sales tax, the taxpayer may collect sales tax on only the taxable portion; and only the taxable portion is included in gross receipts for the MGRT. The Comptroller further advised that Section 182.022(d) only applies to the receipts from the sale of electricity to public school districts.
The Comptroller’s office responded to a private letter ruling request regarding whether a peer-to-peer car sharing platform is responsible for collecting and remitting motor vehicle gross rental receipts tax imposed by Texas Tax Code Chapter 152.
An owner of a motor vehicle is responsible for collecting the tax on charges for the rental of its vehicle to another. The car-sharing platform is not the owner of the vehicles listed on the platform and is not responsible for collecting the tax. Instead, persons listing vehicles on the platform are the owners of the motor vehicles and are required to collect and remit tax on their gross rental receipts received for the rental of their motor vehicles.
A taxpayer requested a private letter ruling regarding the taxability of a cardiac monitor used by medical providers to diagnose and monitor patients who experience symptoms such as dizziness, palpitations, chest pain, syncope, and shortness of breath. The monitor is implanted under a patient’s skin to record the heart’s electrical activity and send the information to the medical provider for remote monitoring.
The Comptroller’s office determined the monitors are therapeutic appliances used during the treatment or cure of human sickness or disease. They are diagnostic tools used in the treatment of patients with heart conditions. Therapeutic appliances are exempt from sales and use tax when sold to a patient under a prescription of a licensed practitioner of the healing arts. However, the monitors are taxable when sold to health care providers for use in providing health care and medical services.
Help is just a click away! Use our website to take care of business.
The Taxes webpage has links to:
Our Account Update Tools make it easy for you to:
The Comptroller’s office offers video tutorials on filing and paying sales tax through Webfile. View them on our Video Tutorials webpage.
Our office also offers virtual Sales and Use Tax Seminars conducted via Webex Events. New taxpayers are especially encouraged to attend these overviews of tax responsibilities for buyers, sellers, and service providers. For more information, visit the Taxpayer Seminars webpage.
Visit our Tax Training Resources webpage to:
The Practitioners’ Corner is a one-stop resource for information about filing and paying taxes, links to tax research sources and searchable databases.