Why did Texas require conservation districts to collect tax on farm erosion-control pipe?

Plain-English summary

The Comptroller upheld tax collection on corrugated steel pipe used for farm and ranch erosion control. Staff relied on a 1973 court decision treating a concrete irrigation ditch as non-equipment and its installer as a contractor; similarly, the pipe became real property rather than exempt agricultural machinery or equipment.

Common questions

Why was the pipe taxable? It was treated as real property. Was the cited case reproduced? No; the letter says it was enclosed.

Citations and references

The letter identifies an unnamed 1973 court decision but gives no citation.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8507L0651E14

Original ruling text

July 15, 1985

Dear **:

I was happy to look at our position requiring soil and water conservation
districts to collect sales tax on corrugated steel pipe used for erosion
control on farms and ranches.

As you know, the sales tax exemption for agriculture is for machinery and
equipment exclusively used on the farm in the production of food or the
building or maintaining of roads and water facilities. In 1973, there was a
court decision which held that a concrete irrigation ditch was not farm
equipment and the person who installed it was a contractor. My staff's decision
that the steel pipe was taxable was based on that court decision. They felt the
pipe did not meet the equipment test but became a part of real property.

A copy of the court case is enclosed for your review. Let me know if I may
provide additional information.

Sincerely

BOB BULLOCK
Comptroller of Public Accounts
of the State of Texas