Texas Taxes Advisory Services

A taxpayer’s sales of advisory services were subject to Texas sales tax as part of the sales price of data processing services. Customers who purchased taxable customer relationship management (CRM) platform services from the taxpayer also received advisory services. The advisory services were part of the sale of the taxable CRM platform services.

According to the taxpayer, the CRM platform was both software as a service (SaaS) and a taxable data processing service.  Arguably, the advisory services qualified as nontaxable consulting services. However, the taxpayer sold advisory services to customers who already bought a top-tiered subscription to the taxpayer’s cloud-based CRM platform. In short, the taxpayer did not sell the advisory services on a stand-alone basis.

Also of note, the advisory services focused on how to best use the CRM platform, and an advisory subscription generally ended when the CRM platform agreement ended.

Letter No. 201709026L, Texas Comptroller of Public Accounts, September 25, 2017, released November 2017, ¶404-304

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