Private Letter Rulings and General Information Letters
Rule 3.1 describes how the Comptroller may respond to a written inquiry for taxability guidance related to Texas tax laws, rules, and policies. The Comptroller may issue:
- A general information letter, or
- A private letter ruling.
General Information Letters
A general information letter is advisory information provided by the Comptroller in response to any written inquiry about the taxability of an item or transaction. General information letters will typically refer requestors to existing resources, such as a rule, publication, or statute, to answer their questions. General information letters may provide a simple response to basic questions, but will not provide detailed information. These responses are not binding on the Comptroller and cannot be relied on for purposes of the agency’s policy regarding detrimental reliance relief. Any written inquiry regarding a taxability issue will be regarded as a general information letter request unless the inquiry meets the criteria for a private letter ruling request as outlined in the rule.
Private Letter Rulings
A private letter ruling (ruling) is the Comptroller’s written determination on the application of relevant tax laws, rules, and policies to a specific set of facts. It is binding on the Comptroller, except as noted below, and, provided the taxpayer’s identity is revealed, may be relied on for purposes of the agency’s detrimental reliance policy in Rule 3.10.
Please consult Rule 3.1 before submitting a private letter ruling request to make sure all requirements are met, as the information below is not a substitute for the rule.
A request for a ruling must be in writing, but no particular format is required. It must be clearly identified as a request for a private letter ruling and include a statement of the ruling requested from the Comptroller.
In order to receive detrimental reliance relief under Rule 3.10, a request for a private letter ruling must contain identifying information for the person or entity to whom or which the request relates, including:
- name and address;
- Texas taxpayer number, federal employer identification number, and state of formation as applicable;
- signature of the person making the request, or of the authorized representative of the person making the request, or of any third party authorized to represent the person before the Comptroller, accompanied by a power of attorney.
The reporting entity of a combined group requesting a private letter ruling relating to franchise tax must include identifying information for each member of the combined group that is a party to any transactions described in the ruling request.
A request for a ruling must contain disclosures as to whether or not:
- the issue is under consideration by the Comptroller in connection with an audit, refund request, hearing, voluntary disclosure agreement or litigation, for the person or entity to which the ruling request relates or to a related person; and
- a request on the same or a similar issue has been or will be submitted to a taxing jurisdiction of another state.
A request for a private letter ruling must include:
- a detailed statement of all relevant facts;
- a copy of all relevant documents;
- 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
- a statement of authorities contrary to the requested ruling.
Each person requesting a ruling is under an affirmative duty to identify any and all contrary authorities. If the requestor determines there are no contrary authorities, or is unable to locate such authorities, the request must include a statement that the requestor has identified all relevant authorities to the best of the requestor’s knowledge.
Relevant facts in documents should be detailed in the request and not merely be incorporated by reference in the detailed statement of relevant facts.
The Comptroller may request additional information as needed.
The Comptroller will promptly acknowledge receipt of all private letter ruling requests.
The Comptroller is not required to provide a response to a ruling request. For example, a general information letter may be issued in response to request for a ruling that does not meet the requirements for a private letter ruling request.
In addition, if the Comptroller requests additional information needed to issue a private letter ruling, including required information that was not provided in the original request, and that information is not provided, a private letter ruling will not be issued.
Also, if 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, a private letter ruling will not be issued.
A private letter ruling may 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 may 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.
Detrimental reliance applies to private letter rulings as provided in Rule 3.10, Taxpayer Bill of Rights, for the person or entity to which the ruling request relates. See also the Compact with Texans.
Nonetheless, 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.
Additionally, 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 final, non-appealable Texas or federal court decision that the Comptroller determines affects the ruling’s validity. And, a private letter ruling is not binding on the Comptroller prospectively if the Comptroller has modified or revoked the private letter ruling.
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 modification or revocation will not be applied retroactively to the person who received the private letter ruling, with respect to the particular issue and the person identified in the request for the ruling.
The Comptroller will provide written notice of a modification or revocation by mail to the taxpayer’s address as it appears in Comptroller records, or, if there are no Comptroller records, 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.
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 as applied to the Comptroller by the Attorney General’s office and court decisions.
All private letter rulings, redacted for confidentiality, will be published on the Comptroller’s State Tax Automated Research (STAR) System, including information regarding any modification or revocation of such rulings.