Texas Comptroller of Public Accounts    STAR System


200810228L



October 30, 2008

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RE: 07285880 Sales Tax Clarification

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

Thank you for your question regarding the taxability of the provision of FEMA 
Elevation Certificates. I apologize for the confusion and delay in responding 
to your question.

You stated that you provide FEMA Elevation Certificates as part of your 
engineering services and asked if you are required to collect tax on the charge 
for the certificate. You received a previous response to this question on 
November 8, 2007 from this office regarding the taxability of the certificates. 
This letter rescinds that letter. 

In order determine the uses of a FEMA Elevation Certificate, I reviewed your 
Web site and the other information you provided. 

Under the “All Services” tab of your Web site, it states, “Elevation 
certificates are used to determine flood insurance rates.” I was able to verify 
this statement in the FEMA publication “Floodplain Management Bulletin - 
Elevation Certificate - May 2004” which states: 

The Elevation Certificate (FEMA Form 81-31) is an important administrative tool 
of the NFIP. [National Flood Insurance Program] It is used to determine the 
proper flood insurance premium rate; . . .

Also, the certificate you submitted indicated in Line A6 that the certificate 
could be used to obtain flood insurance. 

Your charges for the provision of a FEMA Elevation Certificate for the purpose 
of determining flood insurance rates or obtaining flood insurance coverage are 
taxable insurance services.  

Insurance services are made taxable by Tax Code Section 151.0039 and are 
further defined in the attached Rule 3.355. This rule identifies a wide range 
of activities which are taxable as insurance services, including: 

Insurance or annuity actuarial analysis or research - Any activity performed in 
connection with the calculation of rates for a policy of insurance or annuity 
rates, reserves, refunds, dividends, insurance benefits, or other similar 
activities.  See Rule 3.355(a)(4).

Insurance inspection - Any activity performed to evaluate risks to property, to 
survey or value property in connection with the furnishing of insurance 
coverage, or any other similar activity. See Rule 3.355(a)(2).

Insurance investigation - Any activity performed to evaluate an individual's 
eligibility or qualifications for insurance coverage, or for the payment of 
benefits, or any other similar activity. For example, the assembly or 
evaluation of information for the purpose of determining whether to issue a 
life insurance policy to a specific individual would be considered an insurance 
investigation. See Rule 3.355(a)(3).

Your email also implied that the FEMA Elevation Certificates could be used for 
new construction permitting purposes. I was not able to verify this statement 
or determine how the certificate was used in this process. If a FEMA Elevation 
Certificate were provided for purposes other than obtaining flood insurance, 
determining that flood insurance is not required for a specific area, or 
determining premium rates, your charge for provision of the certificate would 
not be taxable as an insurance service. You should obtain an exemption 
certificate from your customer if the use of the certificate is for a 
nontaxable purpose. Although the exemption certificate is not required for the 
provision of a nontaxable service, it could be used to document the reason tax 
was not collected on the transaction. Sellers are required to maintain records 
of their gross receipts, including documentation in the form of receipts, 
invoices, and other pertinent sales records, as well as records substantiating 
any claimed deduction or exclusion from tax.

Shooting elevations is not a taxable real property surveying service. Taxable 
surveying occurs when a person is surveying to determine or confirm the 
boundaries of real property, or to determine or confirm the location of 
structures or other improvements in relation to the boundaries of the property 
by the use of relevant elements of law, research, measurement, analysis, 
computation, mapping and land description. Topographical surveying is not a 
taxable real property service.  See Rule 3.356(a)(9).

I am sharing this information with our audit and enforcement divisions as you 
requested. 

I hope this information is helpful. I'll be glad to help you if you have 
additional questions. You may e-mail your questions to 
lindey.osborne@cpa.state.tx.us. My direct telephone line is (512) 475-0037. The 
toll-free number is 1-800-531-5441, ext. 5-0037.

Sincerely,


Lindey Osborne
Tax Policy Division
Sales Tax Policy Section, Team Leader




ACCESSION NUMBER: 200810228L
SUPERSEDED: N
DOCUMENT TYPE: L
DATE: 10/30/2008
TAX TYPE: SALES