Texas Comptroller Determines Port Authority’s Lessee Can Issue Sales Tax Exemption Certificate to Construction Contractor

The Texas Comptroller of Public Accounts Dec. 1, 2023 determined in a letter ruling that improvements made to leased unimproved land owned by the Houston port authority are exempt from sales and use taxation. The port authority is a tax-exempt entity that entered into a lease agreement with Taxpayer. Taxpayer sought clarification on whether it could issue an exemption certificate to its contractor for tangible personal property, consumable items, and taxable services used for improvements on the property. The comptroller noted: 1) the primary purpose of the improvements benefited the port authority; 2) the improvements were necessary for the port ...