The Texas Comptroller discusses the taxability of charges made by a taxpayer who provides its customers a secure location within a building (a “co-location space”) to store the customer’s equipment or to utilize as a disaster workforce and recovery back-up facility.
The letter discusses the taxability of recurring, managed, and other services provided by the taxpayer including: (1) leasing rack or cabinet space to customers for customer-owned servers; (2) electricity charges; (3) cross-connection and bandwidth services; (4) monitoring network equipment; (5) repair, remodel, restoration, or maintenance of tangible personal property and the installation of monitoring software; (6) installation of fiber optic and copper cabling and power strips; (7) unpacking, moving, and installation of customer’s equipment; (8) tracing and labeling of data and power cables; (9) powering down equipment and then powering it up again; (10) installation of software patches and software modifications; (11) troubleshooting equipment or databases; (12) tape rotation and storage; (13) migration consultation and design and moving services; (14) different types of backup and storage services; (15) purchase and installation of software used to backup customer’s data; (16) shipping and receiving services; (17) physical inspection of customer’s space (Letter No. 200908438L, Texas Comptroller of Public Accounts, August 3, 2009)