Ezel / Tax Rulings / TX
TX 8907L0944B04 Sales and/or Use Tax (State,Local,MTA) 1989-06-18

Did Texas apply the manufacturing exemption for rock-breaking explosives only prospectively?

Short answer: No. The Tax Policy Committee changed its prior position and applied the exemption retroactively, allowing the seller to refund sales tax collected in error.

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This page answers the general question as of 1989. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1989
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 an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
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 Comptroller's Tax Policy Committee reconsidered its treatment of explosives used to break rock in a manufacturing process. Its earlier decision had allowed the exemption prospectively from October 14, 1988.

The committee changed that position and said the exemption should apply retroactively. The seller could refund sales tax collected in error by following the refund instructions it had already received.

Common questions

What property did the letter address? Explosives used to break rock in a manufacturing process.

Was the exemption limited to purchases after October 14, 1988? No. The committee changed the treatment from prospective to retroactive.

Could collected tax be returned? Yes, following the previously supplied refund instructions.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

June 18, 1989

Dear *:

The Comptroller's Tax Policy Committee has taken another look at the exemption
or explosives used to break up rock in a manufacturing process. As you are aware,
our prior decision was to allow this exemption prospectively from October 14, 1988.
The committee has now decided that the exemption should be applied retroactively.

You may refund sales tax collected in error from your customers
following the instructions you have previously been sent.

If you have any additional questions on this issue, please contact
Ledford Kelly in our Audit Division by telephone at
1-800-252-5555, extension 3-3940.

Sincerely,
Dan Pearson
Deputy Comptroller

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