200503300L

STAR SUPERSEDED INFORMATION
Accession No. - 200503300L
Supersede type - Complete
Document superseded on - April 30, 2008
Issue that caused the document to be superseded - Parking
Reason - Inaccurate statement of policy.  For current statement of policy please 
refer to Accession No. 200805091L. 


March 3, 2005

**************
**************
**************

Subject: 05018864 Texas Sales/Use Tax Letter Ruling Request Determination of 
Taxability of Parking Rate Agreement

Dear **************:

Thank you for your letter and please accept my apologies for the lateness of 
this response. I understand that your client has entered into an agreement with 
an independently owned parking facility. You have forwarded to us a copy of the 
contract between the parties covering parking rates for the period November 1, 
2002 through October 31, 2004. The contract allows the parking facility to be 
used for the parking of your client's patrons at specified discounted rates, 
which are obtained when your client validates their patron’s parking voucher. 
The parking facility is also available to the general public. Neither your 
client nor any of the tenants of your client's building are entitled to the 
discounted rates. In addition, the owner of the parking facility does not 
warrant the availability of the parking spaces to either your patrons or the 
general public.

You state that the patrons who park in the facility will pay tax on their 
parking charges. A look at the contract shows that the monthly charge to your 
client for the right to discounted parking by the patrons is $7,500.00 per 
month.  

You believe that this agreement is for a nontaxable intangible right for a 
third party to park at a reduced rate. Your client is under audit by the 
Comptroller's office, and you are in disagreement concerning the taxability of 
the contract.

Response: You are correct in your position that the charge for the right of 
your client's patrons to park at a discounted rate is a charge for an 
intangible right, and is therefore not taxable. The right is an intangible one 
because your client's patrons are not guaranteed a parking space and your 
client is required to pay the monthly charge even if no patrons presented 
validated parking vouchers for the discounted rates. If the patron were 
guaranteed a parking space (whether utilized or not), the $7,500 per month 
contract price would be taxable motor vehicle parking.

I hope this information answers your questions. The Texas Tax Code, rules, 
publications, and forms can be found on our website at 
http://window.state.tx.us/taxinfo/salestax.html. Click on the links for 
"Statutes," "Rules", "Publications" or "Forms" and then the appropriate 
statute, rule, publication or form number

This opinion is based on the information presented. If there are additional or 
different facts, the opinion could change.

If you have any questions or need additional information, you can reply to this 
email, call me at 1-800-531-5441 ext. 5-0701, or write to Tax Policy Division, 
P.O. Box 13528, Austin, Texas 78711-3528.

Our goal is to provide you with prompt, professional service. Please take a 
moment to complete our online survey at 
http://aixtcp.cpa.state.tx.us/surveys/tpsurv/.

Sincerely,


Jody Frierson
Tax Policy Division




ACCESSION NUMBER: 200503300L
SUPERSEDED: S  
DOCUMENT TYPE: L
DATE: 03/03/2005
TAX TYPE: SALES