When was furnishing a trash dumpster part of a nontaxable waste-removal service, and when was it a taxable equipment rental?

Plain-English summary

A dumpster supplied to carry out regular trash-removal service was not a separate taxable rental, but a dumpster retained for a separately priced period was.

In the first two scenarios, the waste company scheduled regular trash pickup and placed compatible dumpsters at customer sites to perform that service. Whether the invoice combined the charges or separately listed dumpster and removal amounts, the “true object” was nontaxable trash removal. The customer charge was not subject to state sales tax.

In the third scenario, a customer such as a construction contractor kept a dumpster for an uncertain period and paid a daily, weekly, or monthly possession charge. That charge was a taxable rental. A separate trash-pickup charge remained nontaxable.

The three scenarios

Regular service with one combined charge

The dumpster facilitated regularly scheduled waste removal. No sales tax was collected on the customer charge.

Regular service with separately stated charges

Separately labeling a dumpster amount did not change the true object. The arrangement remained a nontaxable trash-removal service.

Separately priced possession of a dumpster

The customer specifically wanted possession of the dumpster and paid by day, week, or month. That periodic amount was a taxable lease or rental; the additional trash-pickup charge was not.

Tax treatment when the provider bought dumpsters

Dumpsters acquired exclusively for taxable lease or rental could be purchased tax-free under La. R.S. 47:301(10)(a)(iii).

Dumpsters acquired for use in providing the nontaxable trash-removal service were taxable to the provider when purchased.

Common questions

Q: Did separately stating a dumpster charge always make it taxable?

A: No. In a regular trash-removal arrangement, separate invoice lines did not change the service's true object.

Q: When was the dumpster charge taxable?

A: When the customer contracted for possession and paid a daily, weekly, or monthly retention charge.

Q: Was trash pickup itself taxable?

A: No. Waste removal was not one of the taxable services discussed in the ruling.

Q: Why were portable toilets treated differently?

A: The ruling says the true object of the portable-toilet transaction was the facility itself, while the dumpsters in the regular-service scenarios merely facilitated trash removal.

Citations and references

• La. R.S. 47:301(7)(a), (10)(a)(iii), and (16)(a)
• La. R.S. 47:302(B), 47:321(B), and 47:331(B)
• LAC 61:III.101.C — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 06-012

Original ruling text

Revenue Ruling
No. 06-012
August 23, 2006
Sales and Use Tax
Furnishing of Commercial Trash Containers and Trash Collection Services
The purpose of this Revenue Ruling is to discuss the state sales tax treatment of transactions for
the furnishing of trash dumpsters and the associated service of trash and refuse removal.
Facts
Scenario No. 1. A trash removal company (“company”) contracts with customers for the
regularly scheduled periodic disposal of the customers’ trash. To facilitate the trash removal,
trash dumpsters compatible with the company’s trash removal vehicles are placed on customers’
sites. Among the factors used in determining charges to customers are the frequencies of trash
pick-up and the volume, weight, and/or type or refuse to be removed from customers’ sites.
Invoices to customers provide a single periodic charge, and do not separately delineate amounts
for the furnishing of dumpsters and amounts for trash removal.
Scenario No. 2. Same as Scenario No 1, except that charges for the furnishing of dumpsters and
for trash removal are separately delineated on invoices.
Scenario No. 3. The trash removal company furnishes dumpsters to customers (construction
contractors on job sites, for example) who cannot anticipate the regular intervals at which they
will need trash pick-up. Such customers are charged separately for the delivery of the
dumpsters, for each day, week, or month of their retention of the dumpsters, and for the pick-up
of the dumpsters and removal of waste.
Issue
Is the state sales tax due on the furnishing of the trash dumpsters under the above scenarios? If
so, are any separately stated charges for trash pick-up within the taxable base? Will sales tax be
due on the single charge for the furnishing of dumpsters and trash pick-up? Is sales tax due on
charges for the furnishing and retention of dumpsters that are contracted and arranged separately
from the trash removal service?
Analysis
With respect to service transactions, the Louisiana sales tax law levies the tax only upon the
eight services defined in the sales tax law, which do not include the service of waste removal or
trash pick-up. The law does, however, levy the sales tax on transactions for the lease or rental of
tangible personal property. 1 La. Rev. Stat. Ann. § 47:301(16)(a) defines the term “tangible

1

La. Rev. Stat. Ann. § 47:302(B), 321(B), 331(B), and the sales tax ordinance of the Louisiana Tourism Promotion
District each levy a tax on “the gross proceeds derived from the lease or rental of tangible personal property …
where the lease or rental of such property is an established business, or part of an established business, or the same is
incidental or germane to the said business” and upon “the monthly lease or rental price paid by lessee or rentee, or
contracted or agreed to be paid by lessee or rentee to the owner of the tangible personal property.” La. Rev. Stat.
Ann. § 47:301(7)(a) defines the term “lease or rental,” in pertinent part, as “the leasing or renting of tangible
personal property and the possession or use thereof by the lessee or renter, for a consideration, without transfer of
the title of such property”.

Revenue Ruling No. 06-012
Page 2 of 2

personal property,” in pertinent part, as “personal property which may be seen, weighed,
measured, felt or touched, or is in any other manner perceptible to the senses.” Movable trash
dumpsters are clearly “tangible personal property” under this definition. The question is, then,
whether the furnishing of the dumpsters to customers under the above scenarios would be
considered separate lease or rental transactions or, alternatively, whether the furnishing of the
dumpsters is so integrated into the providing of the service of trash removal that the furnishing of
the dumpsters would be a part of that non-taxable service, rather than separate leases or rentals of
tangible personal property.
The department concludes that, in Scenarios 1 and 2, above, the “true object” of the transactions
is the furnishing of the trash removal service, and the providing to customers of the dumpsters is
done to facilitate the furnishing of the service. In these two scenarios, the sales tax is not
collected on the charges to customers.
In Scenario No. 3, the customer specifically desires to have possession of a dumpster for a period
of time, and the customer is charged a daily, weekly, or monthly rate for the duration of his/her
possession of the dumpster. In this scenario, the sales tax will be collected on the periodic
charges for the customer’s possession of the dumpster. The additional charges for the trash pickup are not subject to sales tax.
The trash dumpsters and other durable tangible personal property that providers acquire for the
exclusive purpose of lease or rental as tangible personal property, as in scenario No. 3 above, are
eligible for tax-free purchase, as provided by La. Rev. Stat. Ann. § 47:301(10)(a)(iii). Trash
dumpsters that the purchasers will acquire to provide a trash pick-up service, as in Scenarios 1
and 2 above, will be taxable to the purchasers.
Comparison to the Furnishing of Portable Toilet Facilities
In a separate Revenue Ruling, the department has ruled that the furnishing to customers of
portable toilet facilities, along with the services needed for those facilities, constitute taxable
leases and rentals. The reason that the sales tax treatment of transactions for the furnishing of
trash dumpsters and associated services, as in Scenarios 1 and 2 above, is different from the tax
treatment of transactions for the furnishing of portable toilet facilities and associated services, as
discussed in that other Revenue Ruling, is that the “true object” of the transactions for the
dumpsters and trash pick-up is the trash removal service. In the case of the transactions for the
portable toilet facilities, the “true object” of the transactions is the furnishing of the facilities
themselves.
For more information regarding this topic, taxpayers should contact the Taxpayer Services
Division at 225.219.7356.
Cynthia Bridges
Secretary
By:

Raymond E. Tangney
Senior Policy Consultant
Policy Services Division

A Revenue Ruling is written to provide guidance to the public and to Department of Revenue employees. It is
issued under LAC 61:III.101.C to apply principles of law to a specific set of facts. A Revenue Ruling does not
have the force and effect of law and is not binding on the public. It is a statement of the Department's
position and is binding on the department until superseded or modified by a subsequent change in statute,
regulation, declaratory ruling, or court decision.