Does a waste transportation broker that arranges hauling of both hazardous and non-hazardous waste, and rents out roll-off boxes/tankers/vans as part of the job, need a Texas sales tax permit — and can it buy or rent that equipment tax-free?

Plain-English summary

A third-party waste transportation broker asked the Comptroller whether it needed a Texas sales tax permit, after being told by field office staff (informally, over the phone) that it didn't. The business: arranging transportation for generators of both hazardous and non-hazardous waste, sometimes renting equipment (tankers, vans, roll-off bins) from rental companies and re-renting it to its own customers, invoicing the shipper while the transporter invoices the broker, and sometimes sending equipment out for tank-washing billed at cost plus 15%.

The Comptroller's answer: yes, a sales tax permit is needed. The business is the seller of a transportation service — garbage/solid waste collection. But the tax treatment splits sharply by waste type:

• Nonhazardous waste: transportation charges ARE taxable under Rule 3.356. Roll-off boxes used to provide that taxable service may be purchased or RENTED tax-free with a resale certificate, as long as the boxes are left at the customer's premises as part of the taxable waste-removal service. The same resale-certificate treatment applies to other equipment (tankers, vans, roll-off bins) left with the customer during a taxable waste collection job.
• Hazardous waste: collecting or hauling it is a NONTAXABLE garbage collection service under the same Rule 3.356. Because that service isn't taxable, the broker must instead PAY tax on roll-off boxes and other taxable items used to provide it — no resale certificate is available for equipment used in nontaxable service.

"Hazardous waste" itself has a specific legal definition here: waste requiring licensing under Tex. Civ. Stat. Art. 4590f and Texas Board of Health rules, including materials identified as hazardous by the EPA or other appropriate federal/state agencies — generally, waste that because of quantity, concentration, or physical/chemical/infectious characteristics may pose a substantial hazard to health or the environment if improperly managed.

Separately, the letter confirms that charges for cleaning equipment (like tank-washing), billed at cost plus 15%, are taxable.

What this means for you

Waste transportation brokers and haulers

The hazardous/nonhazardous line matters more than you might expect: it flips whether your service is taxable AND whether you can use a resale certificate on the equipment (roll-off boxes, tankers, vans, bins) you leave with customers. Nonhazardous = taxable service + resale-certificate-eligible equipment; hazardous = nontaxable service + tax owed on your equipment.

Businesses renting or re-renting waste equipment (tankers, vans, roll-off bins)

Whether you can buy or rent that equipment tax-free depends entirely on whether it's used to provide a taxable (nonhazardous) or nontaxable (hazardous) waste service — track which waste stream each piece of equipment supports.

Accountants and tax professionals

This letter is a useful worked example of the hazardous/nonhazardous waste split under Rule 3.356, plus a reminder that informal verbal guidance from field office staff ("you don't need a permit") isn't reliable — the taxpayer here got a written ruling specifically because they suspected the verbal guidance was wrong, and it was.

Common questions

Q: Does a waste hauling/transportation business need a Texas sales tax permit?
A: Yes, if it's selling a transportation service for waste collection — this letter confirms the permit requirement even though the taxpayer was told otherwise by field office staff over the phone.

Q: Can I buy or rent roll-off boxes tax-free?
A: Only if they're used to provide a taxable service — i.e., nonhazardous waste collection — and are left at the customer's premises as part of that service. For hazardous waste work, you must pay tax on the equipment.

Q: Is hauling hazardous waste taxable in Texas?
A: No — collecting or hauling hazardous waste is a nontaxable garbage collection service under Rule 3.356, which means you can't use a resale certificate for equipment used in that work.

Citations and references

Statutes and rules:

• 34 Tex. Admin. Code Rule 3.356 (nonhazardous waste transportation taxable; hazardous waste collection nontaxable)
• Tex. Civ. Stat. Art. 4590f (hazardous waste licensing definition, per Texas Board of Health rules)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200006384L

Original ruling text

June 1, 2000

From: Bettie Peterson

To: **

Subject: Is it true! I don't need a State sales tax permit

Thank you for your recent email.

Based on the information provided, you are the seller of a transportation
service, also called garbage waste collection. You do need a sales tax permit.
Sometimes you buy these services from others for resale to your customers. You
may issue a resale certificate in lieu of tax on taxable transportation charges
you purchase for resale. Charges for transportation of nonhazardous waste is
taxable under Rule 3.356.

Roll-off boxes used in providing taxable waste removal services under Rule
3.356, may be purchased or rented tax-free by issuing a resale certificate to
suppliers as long as the boxes are left at the customer's premises as a part of
the taxable waste removal service.

The collection or hauling of hazardous waste is a nontaxable garbage collection
service under Rule 3.356. You should pay tax on roll-off boxes and other
taxable items used in nontaxable waste removal services.

Waste which requires specific licensing under Texas Civil Statutes, Article
4590f, and rules adopted by the Texas Board of Health under that law is
"hazardous waste." "Hazardous waste" includes materials listed or identified as
hazardous waste by the administrator of the United States Environmental
Protection Agency (EPA) or by other appropriate federal or state agency.

The term "hazardous waste" means a solid waste, or combination of solid wastes,
which because of its quantity, concentration, or physical, chemical, or
infectious characteristics may pose a substantial present or potential hazard
to human health or the environment when improperly treated, stored,
transported, or disposed of, or otherwise managed.

You may issue a resale certificate in lieu of tax on equipment such as tankers,
vans or roll-off bins that are left with the customer during the provision of
taxable waste collection services. You may not issue the certificate when the
equipment is for use in providing a nontaxable service.

You are responsible for collecting tax on the cost plus 15% for the cleaning of
equipment.

Referenced rules are available at
.

The State Tax Automated Research system, which provides viewing and downloading
of rules, edited letter rulings, hearings, AG Opinions, etc., may be accessed
on the Internet at: http://www.window.state.tx.us/

This opinion is based on the facts you submitted and current law. Other facts
though similar, may result in different answers.

If you have questions or need more information, I will be glad to help you. You
may call me toll free from anywhere in the United States at 1-800-531-5441,
extension 5-0330.

Date: Tue, 23 May 2000 15:37:29 -0600

Hello! My name is ** and I am the owner of a hazardous and
non-hazardous transportation broker company called: COMPANY A I visited one of
you all field services branch today located at **. After talking
with two officer's they told me that I did not need a taxpayer number for the
type of work that I do. They also told me to write to you all to make sure that
their decision was correct. This is my nature of business listed below. Please
respond and provide me with clarity.

1. I am a third party company that arrange the transportation to generators of
   hazardous and non-hazardous waste.

2. I will sometimes rent equipment or waste containers from rental companies
   such as tankers, vans, roll off bins, and such then re-rent these items to my
   customer's

3. I am a person who gets together everything required in order to make a
   shipment I invoice the shipper and the transporter invoices me.

4. I will sometimes send equipment to a tank-wash billing the customer cost
   plus 15%.