Ezel / Tax Rulings / TX
TX 8710L0839E13 Sales and/or Use Tax (State,Local,MTA)

Who had to collect and report Texas sales tax when a city bought garbage-collection service from a private company and provided it to residents?

Short answer: The city. It was providing the service to residents and buying the private collector's service for resale, so it also had to obtain a sales tax permit.

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

Disclaimer: This is a taxpayer-specific Texas Comptroller letter about a city purchasing private garbage-collection service for resale to residents. The body contains no issue date and refers to an October 14, 1987 phone conversation, so this page does not repeat STAR's contradictory generic October 1 metadata date. The letter says the opinion may change if the facts differ. Its permit and collection instructions are historical; verify current law. STAR documents may no longer represent current policy even when not marked superseded. Identities are redacted. This summary is informational only and is not legal or tax advice.
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 city was responsible for collecting and reporting sales tax on garbage collection provided to its residents. It bought the underlying service from a private company for resale and therefore also had to hold a sales tax permit.

The letter relied on the requester's August 31 letter and an October 14, 1987 phone conversation. It does not state an issue date.

What this means for you

The historical letter treated the city, not the private collector, as the retailer to residents because the city bought the service for resale.

Common questions

Who collected tax from residents? The city.

How was the private collector's service characterized? As a service purchased by the city for resale.

Did the city need a sales tax permit? Yes.

Citations and references

  • No statute or rule number is cited in the ruling text.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

Dear ***:

Thank you for your letter of August 31, 1987, concerning the city's sales
tax responsibilities for garbage collection and disposal services.

Based on the information provided in your letter and in our October 14,
1987
telephone conversation, the city is responsible for collecting and
reporting
the sales tax. The city is providing garbage collection services to its
residents. The city is buying the service from COMPANY ABC for resale.
The city is required to have a sales tax permit.

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 me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Policy Division.

Sincerely,
Eddie C. Washington
Tax Policy Division

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