Ezel / Tax Rulings / TX
TX 8802L0863G01 Sales and/or Use Tax (State,Local,MTA) 1988-02-05

Which claimed exemptions made garbage collection or waste-removal services nontaxable under Texas's 1988 rules?

Short answer: Residential and car-wash garbage collection remained taxable. Project-specific work for an exempt entity could qualify with an exemption certificate, and hazardous-waste removal could qualify if an appropriate agency classified the waste as hazardous. Ordinary manufacturing waste did not qualify.

Apply this to your situation

This page answers the general question as of 1988. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1988
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 February 1988 Texas Comptroller letter applying the then-current garbage-removal and real-property-service rules. It says the opinion may change if the facts differ. The listed residential, exempt-entity, hazardous-waste, and manufacturing results are historical; verify current taxability and certificate requirements. STAR documents may no longer represent current policy even when not marked superseded. Taxpayer-identifying details 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 service provider submitted five exemption claims. The Comptroller answered each one:

  • Garbage collection from a condominium association's residential dwellings was taxable; “multi-family dwellings” was not a valid exemption.
  • Trash removal from a self-service car wash was taxable.
  • Job-site garbage disposal while working for an exempt entity could qualify, but the customer had to give an exemption certificate—not a resale certificate—for each project identified by name or number.
  • Ordinary waste disposal as a cost of production was taxable. Removal could be exempt if an appropriate state or federal agency classified the waste as hazardous.
  • Circuit-board-manufacturing byproduct waste did not qualify for a manufacturing exemption; the same hazardous-waste condition applied.

What this means for you

The historical letter required the exemption to match the particular service and project. A customer's general status or the fact that waste arose from manufacturing did not by itself make removal exempt.

Common questions

Was residential garbage collection exempt? No.

Could work for an exempt government entity qualify? Yes, for a specifically identified exempt project supported by an exemption certificate.

Was manufacturing waste automatically exempt? No.

Could hazardous-waste removal qualify? Yes, if an appropriate state or federal agency classified the waste as hazardous.

Citations and references

  • 34 Tex. Admin. Code Rule 3.356 — historical real-property-services rule enclosed with the letter.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

February 5, 1988

Dear *:

On behalf of Mr. Bullock, I hope you'll accept my apology for the delay
in
answering your question involving changes in the sales tax law. This
isn't
the way we normally do business.

Our people were, and still are, swamped by a deluge of inquiries as they
attempted to interpret provisions of the new law and draft rules which
would
not adversely impact businesses. In many instances, an answer to a
question
just wasn't available when the question arrived.

In your letter of November 17, 1987, you enclosed exemption certificates
and
asked for assistance in determining their validity in relation to garbage
collection and removal services. To assist you, each customer is listed
below with their reason for exemption and our appropriate response.

1) ** Condominium Association
Exemption claimed: "Multi-family dwellings"

Response: Invalid. Garbage collection or removal from residential
dwellings
is subject to sales tax.

2) ** Car Wash
Exemption claimed: "Self-service car wash - Public service"

Response: Invalid. Garbage collection or trash removal from a car wash
is
subject to the sales tax.

3)CORP ABC
Exemption claimed: "State Highway Department work"

Response: An exemption could be claimed on job site garbage disposal
charges
while performing work for an exempt entity. An exemption certificate and
not
a resale certificate should be issued on each exempt project, identified
by
project name or number.

4) CORP DEF
Exemption claimed: "Waste disposal is part of the cost of producing the
product"

Response:This certificate is invalid. If the waste is classified as
hazardous by an appropriate state or federal agency then the waste
removal is
exempt.

5) **
Exemption claimed: "Trash is a by-product of circuit board manufacturing"

Response: Invalid. No manufacturing exemption available for
waste disposal
services. See answer #4.

A copy of Rule 3.356, Real Property Services, is enclosed for your
reference.

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,
Julie Pesl
Tax Policy Division

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