Were statutory solid-waste disposal fees included in the taxable price of garbage collection and hauling?

Plain-English summary

Senate Bill 1519 imposed solid-waste disposal fees. The Comptroller said municipal and commercial garbage or waste collectors and haulers had to include those fees in the taxable sales price of their garbage or solid-waste collection and removal services.

The letter relied on the Tax Code's treatment of garbage collection and removal as a taxable real-property service and its broad definition of sales price, which did not allow deductions for materials, labor, services, interest, losses, or other expenses. Neither the Tax Code nor Senate Bill 1519 excluded the disposal fees from the tax base.

The preserved letter addresses disposal fees charged as part of garbage collection and hauling. It does not separately decide every standalone landfill or tipping-fee arrangement suggested by the broader STAR subject label.

Common questions

Could a garbage hauler deduct the statutory disposal fee before calculating tax? No.

Why was the fee included? It was part of the total amount charged for the taxable collection and removal service.

Did the letter decide standalone landfill fees? Not in the operative body.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8907L0948E13

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

July 7, 1989

Dear *:

Thank you for your letter of June 26, 1989, concerning the inclus-
ion or exclusion of the recently enacted solid waste disposal fees
imposed on the disposal of solid waste in landfills.

The solid waste disposal fees imposed by S.B. 1519 are to be
included in the sales tax base as part of the sales price of gar-
bage collection and hauling.

Sections 151.051 and 151.101 of the Texas Tax Code impose a sales
and use tax respectively on the sales price of a taxable item.
Section 151.010 of the code defines a taxable item to mean taxable
services and tangible personal property. Section 151.0048 defines
garbage collection and removal as a taxable real property service.
Section 151.007 (a) 92) of the code defines the "sales price" or
"Purchase price" of a taxable item as "the total amount for which
a taxable item is sold...valued in money, without a deduction for
the cost of....the materials used, labor or service employed,
interest, losses, or other expenses...." (Emphasis added.)

The Texas Tax Code was not amended to exclude these fees from the
tax base, nor does S.B. 1519 provide any language excluding the
fees from the sales tax base or exempting any person from these
fees. Municipal and commercial garbage or waste collectors and
haulers must include these fees as part of the taxable sales price
of garbage or solid waste collection and removal services. See
sections (b), ((f), and (g) of Rule 3.356-Real Property Services.

This opinion is based on the facts presented. If there are addi-
tional or different facts, the opinion may change.

If you have any questions or need more information, you may call
toll-free 1-800-252-5555, ext. 3-4683. The regular number is 512/
463-4600. You may write me at Tax Correspondence, Comptroller of
Public Accounts.

Sincerely,
Eddie C. Washington
Tax Correspondence