Were unprocessed sand, dirt, gravel, and their transportation charges subject to Texas sales tax under the Comptroller's 1988 policy?

Plain-English summary

The Texas Comptroller asked an organization to pass updated sales-tax information to its members. The notice said tax was no longer due on purchases of unprocessed sand, dirt, gravel, or similar materials. Sellers and buyers should not collect or pay tax on those materials.

Transportation of the same unprocessed materials was also nontaxable. The notice explained that transportation charges were taxable when the seller billed for delivery of a taxable item; because these unprocessed materials were no longer taxable, their hauling charge was not taxable either.

What this means for you

Sellers and haulers of bulk materials

This historical notice tied the hauling charge to the tax status of the material. It covered unprocessed sand, dirt, gravel, and similar materials, not every processed aggregate or delivery transaction.

Buyers and contractors

Under the announced 1988 policy, neither the unprocessed material nor its transportation charge carried sales tax.

Common questions

Q: Was unprocessed sand, dirt, or gravel taxable?
A: No, under this notice.

Q: Was hauling those materials taxable?
A: No.

Q: Are all delivery charges nontaxable?
A: No. The notice says a seller's delivery charge for a taxable item is taxable.

Q: Can this be relied on as a taxpayer-specific ruling?
A: No. It is general 1988 industry guidance and may no longer reflect current law.

Citations and references

The notice announces the policy change but cites no specific Tax Code section or Comptroller rule by number.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8806L0884E01

Original ruling text

Bob Bullock
Comptroller of Public Accounts
Austin, Texas 78774

June 30, 1988

Dear **:

I need your help in passing along some information which will be helpful
to your members. I'd like you to let them know that the rules regarding sales
tax on sand, dirt, gravel and similar unprocessed materials have changed
recently.

First, sales tax is no longer due on the purchase price of unprocessed
sand, dirt, gravel or other similar materials. Second, sales tax is not due on
the charge for transportation of these materials.

So, if your members buy or sell these materials, they should not pay or
collect sales tax on them. If your members, or those who sell to your members,
haul these materials or have the materials hauled, they should not pay or
collect sales tax on the transportation of these materials, either.

Transportation charges are taxable only when the seller of a taxable item
charges and bills for that taxable item and its delivery. Since unprocessed
sand, dirt, gravel and other similar unprocessed materials are no longer
taxable, charges for hauling those materials are NOT taxable.

I hope this will straighten out any confusion your members may have
experienced in this area. If they still have questions regarding sales tax on
unprocessed sand, dirt, gravel, or other similar unprocessed materials, or if
they have questions about sales tax on transportation charges, they can call
1-800-252-5555 toll free from anywhere in Texas. Our regular number is
512-463-4600.

Sincerely,
BOB BULLOCK
Comptroller of Public Accounts