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Data work and professional judgement are different
The Comptroller describes entering, storing, manipulating or retrieving customer data as data processing. Merely using a computer to provide a professional service is different; the guidance contrasts data tasks with engineering or bookkeeping judgement and interpretation.
The statutory category has exclusions. A contract containing data entry, storage and advice needs its actual deliverables considered. Renaming the whole invoice consulting does not explain the work.
Fictional example: $1,000 becomes an $800 base
The named Texas sections include data processing among taxable services and exempt 20% of the value of information services and data processing services. If $1,000 is otherwise-taxable qualifying data-processing value, $200 is exempt and $800 remains before other applicable adjustments.
That does not calculate the tax itself. The actual rate and other facts still matter; nor does this arithmetic establish that your service belongs in the category.
Mixed services and use outside Texas need evidence
The Comptroller publication addresses distinct, identifiable nontaxable services, reasonable separate charges and supporting documentation for mixed bundles. It also addresses use inside and outside Texas. Describe the work, charges and customer use rather than changing only an invoice heading.
Service classification, taxable value, the seller’s tax connection or registration, sourcing and final rate are separate questions.
Scope
- Texas example only, using the named statutory sections and Comptroller guidance revision 03/2022. No actual allocation, exemption, permit, sourcing or collection obligation is determined.
Next step
Describe the actual invoice lines and customer use, then apply any supported value exemption separately from the tax rate.
Sources & review notes
Texas Comptroller of Public Accounts
Passage, dates and research notes
official-guidance · Taxable/Nontaxable Services; Collecting Tax; multistate use
merely using the computer as a tool
Read complete main body of publication 94-127 (revision 03/2022), including service-category distinctions, mixed-service documentation and multistate use allocation. Do not treat bookkeeping as universally exempt or quote a final effective tax percentage. Official statute HTML/PDF routes returned a JS shell; current statutory exemption/rate completeness remains unverified.
Texas Legislature
Passage, dates and research notes
primary · §§ 151.0035,151.0101(a)(12),151.351
20 percent of the value of information services and data processing services.
Recovered through the Legislature public app GetStatute API, which returned this official resources-server full-text chapter URL. Read §§ 151.0035,151.0101 and 151.351; chapter contains 2025 amendments. The 20% provision exempts value, not a 20% tax rate and not every service labelled IT. Remaining nexus, sourcing, local tax, actual bundle and exemption facts are not determined.
Detailed rule records (1)
Texas Tax Code § 151.0101(a)(12) includes data processing services, as defined with exclusions in § 151.0035, among taxable services. Section 151.351 exempts 20 percent of the value of information services and data processing services; Comptroller guidance distinguishes professional-service computer use, mixed services and multistate use.
Data Processing Services are Taxable: professional-service and allocation distinctions Texas Tax Code chapter 151: data processing, taxable services and 20% value exemptionKeep this reading in your learning library.
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