Ezel / Tax Rulings / TX
TX 8908L0952E13 Sales and/or Use Tax (State,Local,MTA) 1989-08-31

Were charges to test whether storage tanks held properly under EPA, Texas Water Commission, and Railroad Commission standards taxable?

Short answer: No. Storage-tank testing against those standards was a nontaxable service. The testing company remained responsible for tax on the supplies, materials, and other taxable items used to perform it.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

Testing storage tanks to determine whether they held properly under EPA, Texas Water Commission, and Railroad Commission standards was not a taxable service.

The testing company paid tax on all supplies, materials, and other taxable items used to perform the testing.

The ruling body addresses storage tanks only. It does not decide semiconductors, chips, metals, oil, equipment, or welds despite those items appearing in the broad STAR subject label.

Common questions

Was the storage-tank testing charge taxable? No.

Did the testing provider owe tax on supplies? Yes.

Did the body decide the other testing categories in STAR metadata? No.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

August 31, 1989

Dear ***:

Thank you for your letter questioning the testing of storage tanks.
Testing storage tanks to see if they are holding properly according to the EPA,
the Texas Water Commission, and the Railroad Commission standards is not a
taxable services for sales and use tax purposes. You will owe tax on all the
supplies, materials etc., that you use to perform the service.

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

If you have any questions, please contact Tax Correspondence. You may
call toll free 1-800-252-5555, or our regular number is 512/463-4600. My
extension is 3-4658.

Sincerely,
Sherry Buckley
Tax Correspondence

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