No, no, no. I don't care what state, the Feds will be exempt from all state taxes; not-for-profit private, quasi-governmental and government entities would also be exempt.

In Texas, sales tax is charged whenever there is an "end product" involved. The way the law reads, we are to not charge tax on work like discovery, project management and design, but actual development work is taxed if it produces an "end product."

-G