Which cleaning chemicals and supplies used in cattle slaughtering and meat processing were exempt?

Plain-English summary

The 1989 letter exempted denaturant used on inedible meat, soap used to clean or disinfect processing surfaces that directly contacted meat, and degreaser used on rendering surfaces directly contacting saleable by-products. Chemicals applied to cattle to remove lice qualified only if the hides were sold after slaughter.

Soap or degreaser used on floors, walls, surrounding areas, or equipment outside the direct-contact rule was taxable. So were soap or sanitizer for workers' gloves, boots, aprons, and other garments, and spray paint used to prevent equipment rust.

STAR warns that section 151.318 changed in 1997 and again in 1999, including later public-health provisions. This page reports the 1989 item-by-item holding and does not represent the current exemption test.

Common questions

Was soap for meat-contact tables and knives exempt? Yes.

Was soap for floors or worker clothing exempt? No.

Did lice-treatment chemicals always qualify? No. The hides had to be sold after slaughter.

Is the 1989 legal standard current? Not necessarily; STAR flags later statutory amendments.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8903L0934F13

Original ruling text

ALERT: Effective 10/01/1997 Tax Code Section 151.318 was amended (HB 1855, 75th Leg. Session (1997)) to limit the exemption to tangible personal property directly used in the manufacturing process, and that in addition to being necessary and essential, must now cause a chemical or physical change to the manufactured item. The available exemption discussed in this document was superseded by this change. Then, effective 10/01/1999 Tax Code Section 151.318 was amended (HB 3211. 76th Leg. Session (1999) to retroactively reinstate some provisions that had been dropped by the 1997 legislative change. In this case, 151.318 was amended to include subsection (a)(10) which exempted property consumed in the actual manufacturing operation that was necessary and essential to comply with federal, state, or local laws or rules that establish requirements related to public health.

COMPTROLLER OF PUBLIC ACCOUNTS

STATE OF TEXAS

AUSTIN, 78774

March 28, 1989

Dear ***:

Thank you for your letter of March 22, 1989 concerning the

taxability of various supply items used in the process of

slaughtering cattle and boning carcasses.

The following items may be purchased tax free with an exemp-

tion certificate:

1. Denaturant used on inedible meat to render and warn that

certain cuts of meat are unfit for human consumption

2. Soap to clean or disinfect surfaces on processing equipment

that come in direct contact with the meat, including boning

tables and knives

3. Chemicals used on cattle to eliminate lice on hides before

slaughter may qualify only if hides are sold after slaughter

4. Degreaser used to clean the grease from surfaces of rendering

equipment that come in direct contact with tallow, bone meal,

offal and suet that are sold as by-products

The following items are taxable:

1. Soap or degreaser used to clean floors, walls, equipment and

surrounding areas, including those immediately adjacent to the

actual manufacturing line

2. Soap or sanitizer to clean gloves, working boots, aprons or

other garments worn by workers

3. Spray paint to prevent rust from forming on the equipment

I have included a copy of Hearing 21,295 for your review, as well

as Rule 3.300 on manufacturing and Rule 3.287 on exemption

certificates.

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 any additional questions.

You may write me, call toll-free 1-800-531-441 from anywhere in the

United States or phone 512/463-4685.

Sincerely,

Julie Pesl

Tax Correspondence