Social Security Representation Not A Taxable Insurance Service in Texas

Jan 19th, 2015

The Texas Comptroller of Public Accounts ("Comptroller") ruled that social security disability representation was not a taxable insurance service.

The taxpayer provided social security representation services to claimants. The taxpayer found clients through referrals from insurance carriers, self-insured employers, and third-party administrators.

Insurance services are taxable in Texas. "Insurance services" means (1) insurance loss or damage appraisal, (2) insurance inspection, (3) insurance investigation, (4) insurance actuarial analysis or research, (5) insurance claims adjustment or processing, and (6) insurance loss prevention service. Insurance services are taxable when performed in relation to an insurance policy.

Social security disability representation services are not insurance services. Social security representation services are more like non-taxable professional legal services. As the representation was not an insurance service, the Comptroller did not need to address whether the services were non-taxable for other reasons.