Ezel / Tax Rulings / TX
TX 8712L0849A12 Sales and/or Use Tax (State,Local,MTA) 1987-12-10

Was disposal of salt water and other waste resulting from oil-and-gas exploration, development, or production taxable in Texas?

Short answer: No. The letter said disposal of waste materials resulting from oil-and-gas exploration, development, or production was exempt from sales tax under historical Rule 3.356(4)(B).

Apply this to your situation

This page answers the general question as of 1987. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1987
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 a taxpayer-specific December 1987 Texas Comptroller letter based on disposal of salt water from an oil well. It says the opinion may change if the facts differ. Rule 3.356(4)(B), oil-and-gas waste classifications, and disposal-service rules are historical and may have changed substantially; verify current tax and environmental law and whether the material actually results from qualifying exploration, development, or production. STAR documents may no longer represent current policy even when not marked superseded.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 requester asked about disposal of salt water from an oil well. The Comptroller said disposal of waste materials resulting from activities associated with oil-and-gas exploration, development, or production was exempt from sales tax under Rule 3.356(4)(B).

What this means for you

The historical exemption depended on the waste resulting from the specified oil-and-gas activities. The short letter does not address unrelated industrial waste or every service at an oil-lease site.

Common questions

Was oil-well salt-water disposal taxable? No, under the described facts.

What other waste did the letter cover? Waste materials resulting from oil-and-gas exploration, development, or production.

Citations and references

  • 34 Tex. Admin. Code Rule 3.356(4)(B) — historical real-property-services provision cited for the exemption.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller December 10, 1987

Dear *:

Thank you for your letter concerning the taxability of disposal of salt
water
from an oil well.

Disposal of waste materials which result from activities associated with
the
exploration, development, or production of oil and gas is exempted from
sales
tax. Please see Section (4)(B) of the enclosed Rule 3.356 Real Property
Service.

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,
Julie Pesl
Tax Policy Division

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