Ezel / Tax Rulings / TX
TX 8712L0852A01 Sales and/or Use Tax (State,Local,MTA) 1987-12-29

Were services performed under an industrial-discharge permit issued under Texas Water Code Chapter 26 taxable?

Short answer: No. Based on the injection-well facts, the Comptroller confirmed that services performed under a permit issued under Texas Water Code Chapter 26 were not subject to sales tax under historical Rule 3.356.

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 an injection well operated under Texas Water Commission permit WDW-169. It says the opinion may change if the facts differ. Although the STAR caption names contaminated dirt, water, sludge, overexcavation, hauling, and disposal, the operative response confirms only the treatment of services under the described Chapter 26 permit. Rule 3.356, environmental regulation, and permit-based tax treatment may have changed substantially; verify current law and the actual permit. STAR documents may no longer represent current policy even when not marked superseded.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 operated an injection well under Texas Water Commission permit WDW-169 and said the industrial-discharge permit was issued and regulated under Texas Water Code Chapter 26.

The Comptroller confirmed that services performed under a permit issued under Chapter 26 were not subject to sales tax under Rule 3.356.

What this means for you

The historical answer rests on the services being performed under the described Chapter 26 permit. The letter does not separately decide the broader contaminated-material, excavation, hauling, or disposal activities named in the STAR caption.

Common questions

Were the injection-well services taxable? No, based on the described Chapter 26 permit.

What regulation supported the result? The letter cited Rule 3.356.

Did the letter decide every contaminated-soil or waste-hauling service? No. Its operative response is limited to permitted services under the facts presented.

Citations and references

  • Texas Water Code Chapter 26 — basis for the industrial-discharge permit described by the requester and the Comptroller.
  • 34 Tex. Admin. Code Rule 3.356 — historical rule cited for the nontaxable result.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
Austin, Texas 78774

December 29, 1987

Dear *:

Thank you for your inquiry relative to your operation of an injection
well
and the applicability of Texas sales and use tax law.

You were correct in your conclusion that the services performed under a
permit issued pursuant to Chapter 26 of the Texas Water Code would not
be subject to sales tax under Rule 3.356.

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

Please feel free to contact me if you have additional questions. You may
write me, call toll-free 1-800-252-5555 from anywhere in Texas or phone
512/463-4600.

Sincerely,
Tom Soto
Tax Policy Division

September 29, 1987

Ms. Wanda Hutcheson
Manager, Sales Tax and Policy
111 West 6th
Austin, TX 78701

REF: State Sales and Use Tax Real Property Service 3.356

Dear Ms. Hutcheson:

After having several conflicting conversations with you and other
members of your department concerning the application of subject
sales tax, we have researched the matter and determined that *
is exempt from the subject sales tax. *** operates an injection
well (Permit #WDW-169) which is regulated by the Texas Water Com-
mission. Our exemption is based on the fact that our permit for
industrial discharge was issued and is subject to regulation pur-
suant to Chapter 26 of the Texas Water Code. A copy of our permit
is attached for your review along with a cover letter of transmit-
tal. The attached cover letter and permit specifically reference
Chapter 26 of the Texas Water Code. A copy of the regulation with
the exemptions highlighted is also enclosed for your convenience.
Please review and send written confirmation of our exemption con-
cerning the new Tax Code for my files.

If you have any questions or comments, please do not hesitate to call.

Sincerely,

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