The judge explained that the Comptroller has no jurisdiction to rule on the constitutionality of a statute that the Comptroller is charged with administering. A taxpayer offers house-arrest monitoring for the State. Although security services are taxable, house-arrest monitoring as a condition of probation, parole, mandatory supervision or release on bail is excluded from the list of taxable security services. Because the taxpayer is providing a nontaxable service, it owes tax on all goods and services purchased to provide that service. Wrappers Are Not Eligible A company publishes two newsletters for churches throughout the country.
Newsletters are taxable information services.
Any issues mailed to subscribers outside of Texas are not subject to Texas tax, and the publisher may accept exemption certificates instead of collecting tax from the Texas churches. However, the publisher must pay tax on the envelopes used to mail the newsletters. That's because the envelopes are wrapping and packaging, and Tax Code section151.302 specifically excludes wrapping and packaging materials from the items that may be purchased tax free for resale. The sales tax law exempts chemicals that are necessary and essential to process tangible personal property held for sale. Natural gas is tangible personal property, and folks processing natural gas for sale may claim a tax exemption when buying chemicals that are used in processing the gas.