The Texas Comptroller recently published a private letter ruling (issued on June 10, 2022) concluding that access to a cloud-based online platform used by healthcare students while attending courses at accredited universities and colleges was not subject to sales tax. The platform was accessed exclusively via the Internet, and the students did not download any software to access the platform. Professors using the platform assign students modules, which provide various virtual patient simulations. Upon completion of the module, the students receive scores based on their performance and the scores are transmitted to the assigning professor for a follow-up debrief. The Comptroller concluded that the program was not a taxable information service since it was educational and interactive and not merely the sale of information. The Comptroller found that that the program did contain elements of taxable data processing—such as compiling students’ responses and generating scores based on student performance. However, Tex. Tax Code § 151.0101(d) grants the Comptroller exclusive jurisdiction to interpret whether services are taxable and the Comptroller utilized that jurisdiction to conclude that the educational instruction and evaluation would not be considered a taxable data processing service.
