Texas Administrative Code
Title 34 - PUBLIC FINANCE
Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS
Chapter 3 - TAX ADMINISTRATION
Subchapter A - GENERAL RULES
Section 3.1 - Private Letter Rulings and General Information Letters
Universal Citation: 34 TX Admin Code § 3.1
Current through Reg. 50, No. 13; March 28, 2025
(a) Definitions. The following terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
(1) General information letter--Information provided by the comptroller in response to any written inquiry about the taxability of an item or transaction, including a request for a private letter ruling that does not comply with the requirements necessary to request a private letter ruling.
(2) Private letter ruling--The comptroller's written determination on the application of relevant tax laws, rules, and policies to a specific set of facts submitted in a properly completed private letter ruling request.
(3) Related person--A person, corporation, or other legal entity, including an entity that is treated as a pass-through or disregarded entity for purposes of federal taxation, in which one person, corporation, or entity, or set of related persons, corporations, or entities, directly or indirectly owns or controls a greater than 50% interest in another entity.
(b) General information letters.
(1) General information letters are advisory in nature and are not binding on the comptroller for purposes of detrimental reliance under §
3.10 of this title (relating to Taxpayer Bill of Rights).
(2) The comptroller will respond to a request for a general information letter by issuing a general information letter, by requesting additional information necessary to complete the general information letter, by directing the requestor to the relevant authorities such as agency rules, or by communicating that the comptroller declines to issue a response.
(c) Private letter rulings.
(1) A request for a private letter ruling must be in writing, must be clearly identified as such, and must contain:
(A) identifying information for the person or entity to which the ruling request relates, to include the name, address, Texas taxpayer and federal employer identification numbers, and state of formation, as applicable. The reporting entity of a combined group may request a private letter ruling related to franchise tax reporting on behalf of a combined group by including identification information for each member of the combined group that seeks to rely on the ruling and including identifying information for each member of the combined group that is a party to any transactions described in the ruling request. The signature of the person making the request; the signature of an authorized representative of the person making the request; or the signature of any third party authorized to represent the person before the comptroller, accompanied by a power of attorney, must also be included. If a private letter ruling request does not contain the required identifying information, signature of the person making the request, signature of an authorized representative of the person making the request or a power of attorney if the request is submitted by a third party authorized to represent the taxpayer, the comptroller will still consider the request for a possible ruling; however, no detrimental reliance will be provided under §
3.10 of this title unless the identity of the person or entity to which the ruling request relates is revealed. If the identity of the person or entity is revealed during the comptroller's review of the request, the comptroller may take any actions necessary to ensure that accurate taxability information is provided;
(B) a detailed statement of all relevant facts relating to the request;
(C) a true and correct copy of all relevant documents relating to the request. Relevant facts in documents should be detailed in the request and not merely incorporated by reference in the detailed statement;
(D) a statement disclosing whether or not the issue is under consideration by the comptroller in connection with an audit examination of any type, a refund request, a voluntary disclosure agreement, an administrative hearing, or litigation for the person or entity to which the ruling request relates or for a related person;
(E) a statement disclosing whether or not a request on the same or a similar issue has been or will be submitted to a taxing jurisdiction of another state;
(F) a statement of the private letter ruling requested from the comptroller;
(G) a statement of authorities supporting the requested ruling, an explanation of the grounds for the ruling and the relevant authorities to support the ruling; and
(H) a statement of authorities contrary to the requested ruling. Each person is under an affirmative duty to identify any and all authorities contrary to the requested ruling. If the requestor determines that there are no contrary authorities, or is unable to locate such authority, the request must include a statement that the requestor has identified all relevant authorities to the best of the requestor's knowledge.
(2) The comptroller may request any additional information needed to issue a private letter ruling, including required information that was not provided in the original request. The comptroller will not issue a private letter ruling if the requested information is not provided.
(3) The comptroller will not issue a private letter ruling if the request relates to the same or similar issue that is before the comptroller in the following actions or proceedings for the same person or a related person and for the same or any prior tax period:
(A) an audit examination of any type;
(B) a refund request;
(C) a voluntary disclosure agreement;
(D) an administrative hearing; or
(E) litigation.
(4) The comptroller will promptly acknowledge receipt of all private letter rulings. Subject to paragraph (3) of this subsection, the comptroller will respond in writing to a request for a private letter ruling by issuing a private letter ruling, by issuing a request for additional information, by issuing a letter that declines the request for private letter ruling, or by issuing a general information letter. As part of the process of evaluating the ruling request and determining whether to issue a private letter ruling, the comptroller will consider the extent to which the ruling will promote voluntary compliance by the greatest number of taxpayers and provide information to other persons who have an interest in the subject matter.
(d) Binding effect of private letter rulings.
(1) A person who receives a private letter ruling may rely on it prospectively from the date that the private letter ruling is issued and with respect only to the particular issue and the person identified in the request for the private letter ruling, subject to the exception that, for purposes of the franchise tax, a member of a combined group may rely on a private letter ruling that is issued to the reporting entity of a combined group to the extent that the private letter ruling relates to that member. Detrimental reliance applies to private letter rulings as provided by §
3.10 of this title and subsection (c)(1)(A) of this section.
(2) Notwithstanding paragraph (1) of this subsection, a private letter ruling is not binding on the comptroller with respect to the person who requested the private letter ruling if:
(A) there has been a misstatement or omission of material facts in the request; or
(B) the facts subsequently developed are materially different from the facts on which the private letter ruling was based.
(3) Notwithstanding paragraph (1) of this subsection, a private letter ruling is not binding on the comptroller on a prospective basis if:
(A) there has been a change in the applicable laws, rules, or comptroller hearing decisions that the comptroller determines affects the validity of the ruling;
(B) there has been a final, non-appealable decision issued in a contested case or by a Texas or federal court that the comptroller determines affects the validity of the ruling; or
(C) the comptroller has modified or revoked the private letter ruling.
(e) Modification or revocation of a private letter ruling.
(1) The comptroller may 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 revocation or modification of a private letter ruling shall not be applied retroactively to a person identified in subsection (d) of this section, concerning private letter rulings that are binding on the comptroller.
(2) The comptroller will provide written notice by mail, and service by mail will be complete when the notice is deposited in a U.S. Post Office. The comptroller will address the notice to the taxpayer or other person at the taxpayer's address as it appears in the records of the comptroller. If there are no records of the comptroller for the person making the request or on whose behalf the request has been made, the comptroller will rely on the contact information provided in the private letter ruling request. The comptroller is under no duty to otherwise notify the requestor of the modification or revocation.
(3) A ruling that is modified or revoked due to a change in federal or state law, a final decision of a court of law, or a change in agency rule is effective on 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 which the request was made.
(f) Confidentiality. Information provided to the comptroller when requesting a general information letter or private letter ruling, and any general information letter or private letter ruling issued by the comptroller, remain confidential to the extent provided by the Public Information Act, Texas Government Code Ann., Chapter 552, and controlling interpretations as applied to the comptroller by the Attorney General's office and court decisions.
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