200805091L



May 27, 2008

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

RE: Sales Tax on the Right to Park

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

Thank you for your e-mail about sales tax, and please accept my apologies for 
the lateness of this response.

************** (“COMPANY”) has entered into a lease agreement with 
************** (“LANDLORD”) for office space.  The lease agreement requires 
COMPANY to be allocated some unreserved parking spaces in the building where 
the offices are located and in an off-site garage.  COMPANY pays a monthly 
charge, plus sales tax, for each unreserved space in both the on-site and 
off-site garages.

The lease agreement states that the parking spaces are not assigned parking 
spaces, but it allows for the right to park in stalls on a first-come 
first-served basis in areas of the parking garage designated by the LANDLORD.  
The LANDLORD does not warrant the availability of the parking spaces.

You believe this right to parking as per the lease agreement is a nontaxable 
intangible right because you are not guaranteed a parking space, and you are 
required to pay the monthly charge even if the spaces are unused during the 
month.  Therefore, you believe the sales tax charged for this service is not 
applicable, and all sales tax charged should be refunded.  You reference STAR 
Letter 200503300L in support of your refund claim.

In STAR Letter 200503300L, the taxpayer was told by this agency that the charge 
of $************** for the right of its patrons to park at a discounted rate 
was a charge for an intangible right, and was, therefore, not taxable.  Our 
letter stated the reason for the determination as follows: “If the patron were 
guaranteed a parking space (whether utilized or not), the $************** per 
month contract price would be taxable motor vehicle parking.”

Upon further examination of STAR Letter 200503300L, we conclude that our 
analysis was incorrect in that the lack of guarantee of a parking space should 
not have been a consideration in determining whether the right to discounted 
parking was an intangible right.  The purchase of discounted parking in STAR 
letter 200503300L is taxable as the purchase of motor vehicle parking, under 
Tax Code Section 151.0101(a)(4).  STAR letter 200503300L has been superseded, 
accordingly, as an incorrect statement of policy.  Similarly, the parking 
provided for in your lease is subject to tax as the purchase of motor vehicle 
parking.

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

I hope this information answers your question.  If you need more information, 
please call me toll-free at (800) 531-5441, extension 50701, or you may e-mail 
us at tax.help@cpa.state.tx.us.

Sincerely,


Jody Frierson
Tax Policy Division
Texas Comptroller of Public Accounts




ACCESSION NUMBER: 200805091L
SUPERSEDED: N
DOCUMENT TYPE: L
DATE: 05/27/2008
TAX TYPE: SALES