Is the sale of sand, dirt, and gravel taxable in Texas, and does washing, sorting, or mixing change the answer?

Plain-English summary

A taxpayer asked the Comptroller about the taxability of unprocessed sand, dirt, and gravel. The answer draws a bright line around processing:

• The sale of unprocessed sand, dirt, and gravel is exempt from Texas sales and use tax.
• Washing and sorting these materials is not processing — so washed or sorted material stays exempt.
• Crushing, mixing, or cutting is processing — and processed material is taxable.

Because mixing counts as processing, a mixture of unprocessed sand and gravel is taxable, even though each material would be exempt on its own. Combining the materials is itself the taxable step.

What this means for you

Sellers of sand, dirt, and gravel

If you sell the material in its natural state — at most washed or sorted — the sale is exempt and you do not collect sales tax. The moment you crush, cut, or mix it, it becomes processed and taxable.

Watch the mixing trap

Blending two exempt materials (for example, sand and gravel) produces a taxable product. Do not assume a combination of exempt materials is itself exempt — the act of mixing is processing.

Common questions

Q: Is unprocessed sand, dirt, or gravel taxable in Texas?
A: No. The sale of unprocessed sand, dirt, and gravel is exempt from sales and use tax.

Q: Does washing or sorting the material make it taxable?
A: No. Washing and sorting are not considered processing, so the material remains exempt.

Q: What makes the material taxable?
A: Processing — crushing, mixing, or cutting. Processed material is taxable.

Q: Is a mixture of sand and gravel taxable?
A: Yes. Mixing is a form of processing, so a mixture of otherwise-unprocessed materials is taxable.

Q: Can I rely on this 1988 letter today?
A: Treat it as guidance only. It is based on the facts presented and can change with different facts; on the STAR system it binds the Comptroller only as to the taxpayer it was issued to and may no longer reflect current policy.

Citations and references

Rules and statutes: The letter states the Comptroller's position on processed versus unprocessed aggregate but does not cite a specific rule or Tax Code section 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/8809L0894B13

Original ruling text

September 6, 1988

Dear **:

Thank you for your letter regarding the taxability of unprocessed sand,

dirt and gravel.

The sale of unprocessed sand, dirt, and gravel is exempt from the sales

and use tax. Washing and sorting these materials is not considered

processing. Crushing, mixing, or cutting is processing. A mixture of

unprocessed sand and gravel is therefore taxable.

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 Tax Correspondence, Comptroller of Public Accounts.

Sincerely,

Julie Pesl

Tax Correspondence Division