Is an Eagle Sand Classifier — a machine that washes and sizes sand — exempt manufacturing/processing equipment under Texas sales tax law?

Plain-English summary

A sand and gravel operator asked whether an Eagle Sand Classifier — equipment that washes and sizes sand — qualified for Texas's manufacturing/processing sales tax exemption as "process equipment." The Comptroller said no, the classifier is taxable. For sales tax purposes, "processing" under Rule 3.300 means the physical application of materials and labor necessary to modify or change the characteristics of tangible personal property. Simply sizing, screening, sorting, washing, or drying sand doesn't change its characteristics — it's the same sand, just cleaned and separated by size — so equipment used only for that purpose doesn't qualify as exempt processing equipment.

What this means for you

Sand, gravel, and aggregate operators

Don't assume that "process equipment" marketing language on a piece of machinery, or the fact that it's part of your production line, automatically makes it tax-exempt. The Comptroller draws a line between equipment that actually changes a material's characteristics (which can qualify as exempt manufacturing/processing equipment) and equipment that merely sorts, cleans, or sizes an unchanged material (which doesn't). A classifier that washes and sizes sand falls on the taxable side of that line.

Equipment vendors serving the aggregates industry

If a customer asks about tax exemption for sizing, washing, or screening equipment, this letter is a useful data point that the Comptroller has specifically found that category of equipment taxable — worth flagging so buyers don't rely on an assumed exemption.

Accountants and tax professionals

The letter is a narrow, single-item application of Rule 3.300's processing definition. It doesn't address other equipment in a sand/gravel/aggregate operation (crushers, conveyors, front-end loaders, etc.) — each piece needs its own analysis of whether it changes the material's characteristics versus merely handling, sorting, or moving it.

Common questions

Q: Is a sand classifier that washes and sizes sand exempt from Texas sales tax?
A: No, according to this letter — washing and sizing sand doesn't change its characteristics, so it isn't "processing" under Rule 3.300, and the classifier is taxable.

Q: What does "processing" mean for the Texas manufacturing exemption?
A: Under Rule 3.300, processing is the physical application of materials and labor necessary to modify or change the characteristics of tangible personal property — not just sorting, screening, washing, or drying it.

Q: Does this letter address other sand/gravel plant equipment like crushers or conveyors?
A: No — this letter answers only the specific question asked about the Eagle Sand Classifier. Other equipment would need its own analysis under the same Rule 3.300 processing test.

Citations and references

Statutes and rules:

• 34 Tex. Admin. Code Rule 3.300 (Manufacturing; Custom Manufacturing; Fabricating; Processing)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200008571L

Original ruling text

August 8, 2000

<**>

Dear **:

I am responding to your e-mail regarding the sales tax exemption of an Eagle

Sand Classifier.

You state that you purchased a sand classifier that washes and sizes sand. You

consider this process equipment.

For sales tax purposes, processing is the physical application of the materials

and labor necessary to modify or to change the characteristics of tangible

personal property. You are not processing sand when you just size, screen,

sort, wash or dry sand. See Rule 3.300 concerning Manufacturing; Custom

Manufacturing; Fabricating; Processing. The sand classifier is taxable.

To view or down load Rule 3.300, please go to our web site address at

and scroll

to the specific rule.

This opinion is rendered based on the facts presented. Other facts though

similar, may yield different results.

If you have any questions or require additional information, you may submit

inquiries to our tax help Internet address at , call

1-800-531-5441, extension 6-5809 or write to Tax Policy Division, Post Office

Box 13825, Austin, Texas 78711-3825.

Sincerely

Emilio S. Lerma

Tax Policy Division