Is a ready-mix concrete producer that delivers to job sites a taxable 'ready mix concrete contractor,' and where does it source local sales tax on its sales — the plant or the delivery site?

Plain-English summary

A company runs three ready-mix concrete plants and delivers concrete to construction job sites by truck. It asked the Texas Comptroller two questions: (1) is it a "ready mix concrete contractor" under Tex. Tax Code § 151.056(g), and (2) where should it source local sales tax on its sales?

The Comptroller ruled it is not a "ready mix concrete contractor" — that label is reserved for a business that both manufactures the concrete and incorporates it into the property being improved (pours, spreads, and finishes it at the job site). Here, once the truck driver connects the delivery chute and starts the flow, it's the customer's own concrete finishers who build the forms, direct the pour, and smooth/spread the concrete. Because the company only makes and delivers the concrete, it's a seller of materials instead.

That classification decides where local sales tax gets sourced: local sales tax for a multi-location seller goes to whichever "place of business" actually fulfills the order (here, the specific plant, since each receives three or more orders a year and independently qualifies as a place of business) — not to the job site. If that plant's own local tax rate is under the general 2% local-tax cap, the company may separately owe local use tax at the delivery location to fill the gap, up to the cap.

What this means for you

Ready-mix concrete producers (and similar delivery-only material suppliers)

Whether your own crew pours, finishes, and incorporates the material into real property — not just delivers it — is the dividing line between being a taxable "contractor" (§ 151.056(g)) and being a materials seller. If the customer's own crew does the finishing work, you're likely a seller, and you source local sales tax to the plant/location that fulfills the order, not to each job site.

Businesses with multiple locations selling tangible personal property in Texas

The core sourcing rule here isn't concrete-specific: local sales tax for a seller with more than one place of business sources to the location that actually fulfills the order (Tex. Tax Code § 321.203(c)(1)), as long as that location independently qualifies as a "place of business" (three-plus orders a year, per § 321.002(a)(3)(A)). You may still owe local use tax at the delivery jurisdiction if your fulfilling location's rate doesn't reach the 2% local cap.

Accountants and tax professionals

Watch the two-part test in § 151.056(g): manufacture AND incorporate into real property. A producer that only delivers and starts the pour but leaves finishing to the customer's crew fails the "incorporate" half, per this ruling's application of STAR Accession No. 200810188L (2008). Then apply § 321.203(c)(1) and Rule 3.334(c)(1)(B)(i) for sourcing, and check Rule 3.334(c)-(d) for the local-use-tax gap-filling mechanic up to the 2% cap.

Common questions

Q: If my delivery driver starts the concrete flowing from the truck, does that count as "incorporating" it into the property?
A: Not by itself, per this ruling — what mattered was that the customer's crew (not the seller's) built the forms, directed the pour, and finished the concrete. Starting the flow at the chute wasn't enough to make the seller a "ready mix concrete contractor."

Q: Do I source local sales tax to my customer's job site or to my own plant?
A: To your own place of business that fulfills the order (here, the specific plant), as long as that location independently qualifies as a "place of business" under § 321.002(a)(3)(A). You may owe additional local use tax at the job site only if your plant's local rate doesn't already reach the 2% cap.

Q: Can other ready-mix producers rely on this ruling?
A: No. It binds the Comptroller only for the taxpayer and facts in the request. A producer whose own crew pours and finishes concrete at the job site would likely be a "ready mix concrete contractor" under a different analysis.

Citations and references

Statutes and rules:

• Tex. Tax Code § 151.051 (Sales Tax Imposed); § 151.010 (Taxable Item); § 151.009 (Tangible Personal Property)
• Tex. Tax Code § 151.056(g) (definition of "ready mix concrete contractor")
• Tex. Tax Code § 321.002(a)(3)(A) (place of business of the retailer); § 321.203(c)(1) (consummation of sale/sourcing)
• 34 Tex. Admin. Code § 3.334(c)(1)(B)(i), (c), (d) (Local Sales and Use Taxes)

Cited prior guidance:

• STAR Accession No. 200810188L (Oct. 17, 2008) — describes what a "ready mix concrete contractor" actually does at the job site

Source

• Landing page (STAR search): https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/202509034L

Original ruling text

September 5, 2025

RE: Private Letter Ruling No. PLR20250328150753

Dear **:

We issue this private letter ruling in accordance with Rule 3.1, Private Letter Rulings and General Information Letters. [ENDNOTE 1] We are responding to your request dated March 20, 2025 as well as additional information you provided in a telephone call on May 1, 2025.

Detrimental reliance relief is provided in accordance with Rule 3.10, Taxpayer Bill of Rights.

You requested guidance regarding local tax sourcing for your three ready mix concrete fabrication plants.

Facts Presented

** (Taxpayer) manufactures ready mix concrete at three plants in Texas – CITY A, CITY B, and CITY C. Each of the plants has a separate phone number that contractors call to place concrete orders. No local jurisdictions impose local sales and use tax at the CITY A location. County sales and use taxes at rate of 0.5% are imposed at the CITY B AND CITY C locations.

After receiving an order, Taxpayer prepares the concrete aggregate, places it in a mixing truck, and delivers it to the job site. At the job site the truck driver attaches the delivery chute to the truck. Once the client’s concrete finishers are ready, Taxpayer starts the concrete flow. The client’s concrete finishers are responsible for preparing the concrete forms, smoothing out the concrete, and directing the concrete chute to areas where they want the concrete deposited. Occasionally, Taxpayer's driver delivers the concrete to the contractor's pumping truck and the concrete finishers pump the concrete from the pumping truck to the desired final location at the job site.

Questions, Rulings, and Analysis

Our restatement of your questions is shown below, followed by our responses and analysis.

Question One: Is Taxpayer a “ready mix concrete contractor” under Section 151.056(g)?

Ruling One: Taxpayer is a seller of materials and is not a “ready mix concrete contractor.”

Question Two: Where should Taxpayer source local sales and use taxes on its sales?

Ruling Two: Taxpayer should source local sales taxes to the plant location that fulfills an order for concrete. Taxpayer may be responsible for collecting additional local use taxes at the job site.

Analysis: Texas imposes sales tax on each sale of a taxable item in this state. Section 151.051 (Sales Tax Imposed). Taxable items are tangible personal property and taxable services. Section 151.010 (Taxable Item). Section 151.009 (Tangible Personal Property) defines tangible personal property as personal property that can be seen, weighed, measured, felt, or touched or that is perceptible to the senses in any other manner.

Section 151.056(g) (Property Consumed in Contracts to Improve Real Property) defines a “ready mix concrete contractor” as a “person who manufactures or produces ready mixed concrete for construction purposes and incorporates the ready mixed concrete into the property improved.”

Although Taxpayer manufactures concrete and starts the pouring process with its delivery truck, it does not meet the statutory definition of a “ready mix concrete contractor” in Section 151.056(g). Ready mix concrete contractors are those who, for example, produce, pour, and spread concrete at job sites for the slabs and floors of a building and the parking lots surrounding the building. See STAR Accession No. 200810188L (Oct. 17, 2008).

Once Taxpayer produces the concrete at its concrete plants, it delivers the concrete to a contractor at the job site. The contractor’s concrete finisher builds the concrete forms, directs the concrete truck chute to control the pour, and spreads the poured concrete at the job site to incorporate the ready mix concrete into the property. Taxpayer is not both producing and incorporating concrete into real property as described by Section 151.056(g) and is therefore not a ready mix concrete contractor.

Local sales taxes are generally sourced based on the place of business of the retailer that receives or fulfills orders. A “place of business of the retailer” is an established outlet, office, or location that receives three or more orders during a calendar year. Section 321.002(a)(3)(A) (Definitions). Sellers with more than one place of business source local sales tax to the place of business from which the seller fulfills the order. Section 321.203(c)(1) (Consummation of Sale). See also Rule 3.334(c)(1)(B)(i) (Local Sales and Use Taxes).

Taxpayer sells concrete, which is tangible personal property. Each of Taxpayer's three ready mix concrete plant locations receive three or more orders during a calendar year and are therefore “places of business” under Section 321.002(a)(3)(A). As each ready mix concrete plant is a place of business and fulfills orders, local taxes are sourced to the location of the ready mix concrete plant where the order was fulfilled. Section 321.203(c)(1) and Rule 3.334(c)(1)(B)(i).

Taxpayer is required to collect all local sales taxes in effect at the location of its place of business up to a maximum rate of two percent. If the local sales tax in effect at the place of business does not reach two percent, Taxpayer may be required to collect and remit additional local use taxes for those jurisdictions that impose a tax at the delivery location. See Rule 3.334(c) and (d).

Taxpayer can look up all local tax rates by entering the address on the Comptroller’s Sales Tax Rate Locator website: https://gis.cpa.texas.gov/search/. For additional guidance on local sales and use taxes please refer to Publication 94-105 Local Sales and Use Tax Collection- A Guide for Sellers.

Comptroller’s Decisions and STAR documents cited can be found on the Comptroller’s State Tax Automated Research (STAR) system. The Texas Tax Code, Texas Administrative Code, and the STAR system are accessible at www.comptroller.texas.gov/taxes/.

If you have questions about this private letter ruling, please email us through our website at https://comptroller.texas.gov/web-forms/tax-help/ and reference Private Letter Ruling No. 20250328150753.

Sincerely,

Tax Policy Division – Indirect Taxes

Texas Comptroller of Public Accounts

ENDNOTE

1 Unless otherwise indicated, all references to “Section” are to the Texas Tax Code, and all references to “Rule” are to Title 34 of the Texas Administrative Code.