Ezel / Tax Rulings / TX
TX 8506L0644B02 Sales and/or Use Tax (State,Local,MTA) 1985-06-06

How did Texas classify oilfield welding and determine the city tax rate?

Short answer: Oilfield welding was presumed to be performed on tangible personal property unless the invoice clearly showed real-property work. The local rate depended on where work orders were accepted; orders accepted at the stated city location required that city's tax.

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This page answers the general question as of 1985. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1985
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Comptroller presumed that welding performed in an oilfield was work on tangible personal property. To receive different treatment for work on real property, the billing had to state that real-property fact clearly.

The applicable city tax depended on where the welding business accepted work orders. If orders were accepted at its location inside the redacted city, the business had to collect that city's tax.

Common questions

What classification applied by default? Tangible-personal-property work. How could the billing support real-property treatment? It had to clearly identify the work as performed on real property. What determined the city tax in this letter? Where the business accepted the work order.

Citations and references

The letter says a welders' brochure was enclosed but cites no numbered statute or rule.

Source

Original ruling text

June 6, 1985

Dear ***:

Thank you for your letter of May 22, 1985 concerning the taxability of
welding in the oil fields with a truck mounted portable rig.

All welding performed in the oilfield is presumed to be done on tangible
personal property unless it is clearly indicated on the billing that the
work was done on real property.

The tax rate you use for the welding business depends on where you accept
work orders. If your husband takes work orders at the location inside CITY,
he must collect city tax for CITY.

I have enclosed our brochure for welders for your reference.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the
Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division

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