Texas Comptroller Finds Taxpayer Liable for Sales and Use Tax Due to Use of Lump-Sum Contracts

The Texas Comptroller of Public Accounts Aug. 3 decided to adopt the Administrative Law Judge’s (ALJ) recommendation to affirm the Tax Division’s (staff) sales and use tax assessment. Taxpayer owned and operated an air conditioning repair, maintenance, and refrigeration service company. The staff issued the tax assessment with penalties and interest. Taxpayer requested a redetermination, contending the staff’s methodology to determine purchases and credits allowed was incorrect. The staff adjusted the assessment, but Taxpayer requested additional adjustments. The ALJ noted: 1) Taxpayer was considered the ultimate consumer of incorporated materials and required to pay tax, since it acted as a ...