When were grease-trap pumping and sewer cleaning taxable, and which local rate applied to carpet routed through San Antonio for Houston installation?

Plain-English summary

The letter answered two unrelated questions.

For a grease trap located directly in a sewer line, cleaning was not taxed under Rule 3.356 as a real-property service. Pumping the tank and cleaning the inlet or related plumbing instead fell under Rule 3.357. Those charges were not taxable only if the work met Rule 3.357(a)(3)'s maintenance definition and the service provider kept the documentation required by subsection (c)(2). Otherwise, the charges were taxable labor to repair nonresidential real property.

For carpet purchased from Pennsylvania, shipped to San Antonio for binding and preparation, then delivered and installed at a Houston cafeteria, the Comptroller said the San Antonio rate applied.

What this means for you

Under the historical rules, the tax result for grease-trap work depended on whether the job was documented maintenance or a repair. The separate carpet answer used the San Antonio ship-to location shown on the manufacturer's invoice.

Common questions

Was pumping a grease trap always nontaxable? No. It had to qualify as documented maintenance.

What if the work did not meet the maintenance test? The letter treated it as taxable labor to repair nonresidential real property.

Which local rate applied to the carpet? The San Antonio rate.

Citations and references

• 34 Tex. Admin. Code Rule 3.356 — historical real-property-services rule.
• 34 Tex. Admin. Code Rule 3.357(a)(3), (c)(2) — historical maintenance definition and documentation provisions.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8802L0860G09

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

February 4, 1988

Dear *:

Thank you for your recent letter which is restated with responses below.

Per our recent telephone conversation concerning the taxing of
grease trap pumping service, I am enclosing a "Detail of Grease
Trap". It shows how the grease trap is constructed and how it
works. The inlet comes from the building and the clean water
passes through the outlet into the utility company's sewer system.
My question is: Is the service taxable to pump out the layer of
coagulated grease and the layer of sediment and haul it to an
appropriate dump site? Also, if the serviceman cleans out the
inlet pipe either with water or with a machine is this considered
to be like any commercial plumbing service?

Response: Because the grease trap is directly in the sewer line, your
charges
for cleaning it out will not be taxed as a real property service under
Rule 3.356 (enclosed). However, I am of the opinion that the service of
pumping the tank and cleaning the inlet or other related plumbing would
be
covered under Rule 3.357 which is also enclosed.

If the pumping and/or sewer clean out meets the definition of
maintenance.
As defined in Rule 3.357(a)(3) and the serviceman has the documentation
required in Section (c)(2) of the rule, the charge will not be taxable.
Otherwise, the charges will be taxable as labor to repair nonresidential
real property.

My second question concerns the following example: *****'s
purchases carpet from a manufacturer in Pennsylvania for
installation in a cafeteria in Houston. The carpet is shipped to
a company in San Antonio which binds the carpet, prepares it for
installation, and then delivers and installs the carpet in
Houston. The manufacturer's invoice show the "ship to" location
as San Antonio. Are we required to pay sales/use tax at the San
Antonio rate or the rate at the cafeteria location in Houston?

Response: The San Antonio rate would apply.

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 our
toll-free
number 1-800-531-5441. The regular number is 512/463-4600. You may
write me
at the Tax Policy Division.

Sincerely,
Al Van Allen
Tax Policy Division