taxes

General Information Letters and Private Letter Rulings

Businesses with a question about how tax law and rules may apply to them can request a written response from the Comptroller. Most questions can be answered with a general response, but administrative rules detail a process by which a taxpayer can request a Private Letter Ruling.

General Information Letters

The Comptroller provides advisory information in response to a written inquiry about the taxability of an item or transaction in the form of a general information letter. General information letters will typically refer requestors to existing resources, such as a rule, publication or statute, to answer their questions.

The Comptroller views any written inquiry regarding a taxability issue as a general information letter request unless the inquiry meets the criteria for a private letter ruling request as outlined in Rule 3.1, General Information Letters and Private Letter Rulings. General Information Letter responses are not binding on the Comptroller and cannot be relied on for purposes of the agency’s policy regarding detrimental reliance relief.

Private Letter Rulings

A private letter ruling is the Comptroller’s written determination as to how relevant tax laws, rules and policies apply to a specific set of facts. It is binding on the Comptroller, except as noted below, and, provided the taxpayer’s identity is included in the request, the person or entity to whom or which the request relates can rely on it for purposes of the agency’s detrimental reliance policy in Rule 3.10.

Consult Rule 3.1 before submitting a private letter ruling request to make sure all requirements are met.

The Comptroller can request additional information as needed.

Acknowledgment of Receipt

The Comptroller will promptly acknowledge receipt of all private letter ruling requests.

When a Private Letter Ruling Will Not Be Issued

The Comptroller is not required to provide a response to a ruling request if:

  • the request for a ruling does not meet the requirements for a private letter ruling request;
  • additional information requested by the Comptroller including required information that was not provided in the original request, is not provided; or
  • the request relates to an audit examination of any type, a refund request, a voluntary disclosure agreement, an administrative hearing, or litigation before the Comptroller for the same person, or a related person, and for the same or any prior tax period.
Binding Effect

Detrimental reliance applies to private letter rulings as provided in Rule 3.10, Taxpayer Bill of Rights, for the person or entity to whom or which the ruling request relates.

A private letter ruling can be relied on by the person who receives it, prospectively from the date of its issuance, with respect only to the particular issue and the person identified in the request for the ruling. A member of a combined group can rely on a private letter ruling issued to the reporting entity of a combined group to the extent that the ruling relates to that member and that member was identified in the ruling request.

A private letter ruling is not binding on the Comptroller if material facts were omitted or misstated in the request, or if the facts subsequently developed are materially different from the facts on which the ruling was based. A ruling is not binding on the Comptroller on a prospective basis if there has been a change in the applicable laws, rules or Comptroller decisions; or, a Texas or federal court decision that the Comptroller determines affects the ruling’s validity becomes final and non-appealable. And, a private letter ruling is not binding on the Comptroller prospectively if the Comptroller has modified or revoked the private letter ruling.

Modification or Revocation

The Comptroller can modify or revoke a private letter ruling if the ruling is found to be in error or not in accordance with laws or current Comptroller policy or guidelines. The Comptroller will not apply the modification or revocation retroactively with respect only to the particular issue and the person identified in the request for the ruling.

The Comptroller will mail written notice of a modification or revocation to the taxpayer’s address as it appears in Comptroller records. If there are no Comptroller records, the notice will be mailed to the contact information provided in the private letter ruling request.

If the modification or revocation is due to a change in state or federal law, a final decision of a court of law, or a change in agency rule, the effective date of the modification or revocation is the date of the event requiring the modification or revocation.

If a ruling is modified or revoked due to a change in Comptroller policy that is not reflected in an agency rule, the ruling is effective until the date of the written notice sent to the requestor or person for whom the request was made.

Confidentiality and Publication

Information provided to the Comptroller when requesting a private letter ruling or a general information letter is confidential to the extent provided by the Public Information Act and controlling interpretations of the Attorney General’s office and court decisions that apply to the Comptroller.

The Comptroller will publish all private letter rulings, redacted for confidentiality, on the Comptroller’s State Tax Automated Research (STAR) system, including information regarding any modification or revocation of such rulings.