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When Texas customers purchased information services over the Internet from companies that sold their information on a nation wide basis, 80% of the transaction was considered taxable. In Texas, 20% of the value of the sale of information services is exempt from state and local tax. However, if these were out-of-state customers, but still accessed information both within and outside Texas, they would be only exempt from Texas sales and use tax if they provided an exemption certificate. (Texas Comptroller of Public Accounts, TX—Letter 200202787L, February 28, 2002)

(02/15/2002)

This occurred because the manufacturing process was not completed until the papers were packaged for shipping. The conveyor that delivered the newspapers for packaging was not a taxable intraplant transportation system. Instead, it was an integrated component of the exempt manufacturing process of a completed newspaper. (Decision of the Texas Comptroller of Public Accounts, Hearing No.37,858, November 1, 1999)

(06/15/2000)

The method by which a fabric company transformed finished second quality fabric, purchased from fabric mills, into first quality fabric constituted processing rather than remodeling and, thus the electricity used at its facility, of which more than 50% was consumed in processing, was exempt from Texas sales tax. The company's process qualified for the manufacturing exemption because it turned unmarketable fabric unsuitable for any retail use into fabric sold in the consumer market. The fact Tthat the area in which processing occurred took up less than 50% of the facility was of no consequence since processing areas normally consume more electricity than office or retail space and the company's utility study confirmed that its processing area used more than 50% of the total electricity consumed in the building. (Haber Fabrics Corp., Texas Court of Appeals, Third District No. 03-99-00272-CV, March 2, 2000.)

(06/15/2000)

The rolling stock exemption applies only to conventional railroad equipment or equipment mounted on rails that connect to traditional railroads. (Decision of the Texas Comptroller of Public Accounts, Hearing No. 36, 869)

(06/15/2000)

In a ruling by the Texas Comptroller’s office, an out of state business whose only presence in Texas was software licensed to customers, was deemed to maintain a sufficient presence or nexus such that it is required to collect Texas use tax on it license fees. The state argued that the software is tangible personal property and the licenses are akin to leases and therefore the software company maintained property within the state. The number of licenses and the fact that they were not perpetual "shrink-wrap" licenses provided a sufficient presence in the Comptroller’s opinion. (Texas Comptroller of Public Accounts, Hearing No. 36,237, July 21, 1998)

(08/15/1998)

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