Ezel / Tax Rulings / TX
TX 8909L0959C14 Sales and/or Use Tax (State,Local,MTA) 1989-09-26

Were labor charges to repair or recondition reusable steel drums exempt when the work was required by federal transportation rules?

Short answer: Yes. Tax Code § 151.338 applied to steel-drum repair or reconditioning performed as set out in the cited federal transportation regulation, so the labor charge for repairing the drums was exempt.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 requester bought services to repair or recondition steel drums for reuse in packaging materials it sold.

Tax Code § 151.338 applied when the drum work was performed as set out in the federal transportation regulation cited in the letter, 49 C.F.R. § 173.28(m).

The labor charge to repair the drums therefore was exempt.

Common questions

Was the drum-repair labor taxable? No.

What Texas authority did the letter cite? Tax Code § 151.338.

What federal provision did it identify? 49 C.F.R. § 173.28(m).

Citations and references

  • Tex. Tax Code § 151.338
  • 49 C.F.R. § 173.28(m)

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN 78774

September 26, 1989

Dear ***:

Thank you for your letter of August 2, 1989, concerning the tax-
ability of services to recondition steel drums for reuse in
packaging various materials that you sell.

Section 151.338 of the Texas Tax Code does apply to your purchase
of services to repair or recondition the drums as set out in CFR
49 SEC. 173.28(m) of the Federal Highway Administration, U.S. Depart-
ment of Transportation. Thus, the services (labor) to repair the
drums are exempt.

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 write me at Tax Correspondence, Comptroller of
Public Accounts.

Sincerely,
Eddie C. Washington
Tax Correspondence

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