Texas sales tax on packaging billed by a 3PL
A Texas 3PL picks, packs, and ships clients' products. Fulfillment isn't a taxable service in Texas.
The 3PL buys packaging (boxes, mailers, poly bags, void fill) and pays sales tax to its suppliers. It then bills clients for that packaging as a separately stated line with a markup, and charges sales tax on it. Same materials taxed twice.
My read is that the 3PL is the consumer under Tax Code 151.302(c), so paying tax at purchase is right and the client-facing charge is part of a nontaxable service that shouldn't be taxed.
Supporting that (I think):
- Rule 3.314(f): the only exception is buying packaging for resale "as is," not as part of a packaged product. No standalone box sales here.
- STAR 9604L1407C12 (1996): letter to a furniture installer: where the provider performs a nontaxable moving service, the boxes aren't taxable to the client even if separately stated, and the provider pays tax at purchase.
- Comptroller's Decision 202408010H (2024): jewelry retailer lost the "boxes were purchased for resale" argument. Different facts, but the rule applied reaches anyone repacking tangible personal property prior to sale.
Is that the right read? Or is there a real argument the 3PL is reselling the packaging and should be issuing a resale certificate instead?