Ezel / Tax Rulings / TX
TX 8910L0964F05 Sales and/or Use Tax (State,Local,MTA) 1989-10-20

Were computer-assisted leak-detection testing services for underground petroleum and chemical storage tanks taxable?

Short answer: No. The testing charge was nontaxable even though the provider used a computer in its vehicle. As a nontaxable service provider, it paid tax on the computer and other taxable items used to perform the service.

Apply this to your situation

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 provider tested underground petroleum and chemical storage tanks for leaks using a computer installed in its testing vehicle.

The testing charges were not taxable. The provider instead paid tax on taxable items used in the service, including the computer.

Common questions

Was tank leak testing taxable? No.

Did using a computer change the result? No.

Who paid tax on the computer? The service provider.

Source

Original ruling text

October 20, 1989

Dear **:

Thank you for you inquiry regarding the taxability of testing services on
underground storage tanks.

You state that you test leaks in your client underground petroleum and chemical
storage tanks. Although many of your competitors provide these testing services
using manual methods, you utilize a computer located in your testing vehicle.

Your charges for testing underground storage tanks aren't taxable. However you
should pay tax on all taxable items used in providing these service. For
example, you should pay tax on your computer.

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
3-4662.

Sincerely,

Bob Jeffcoat
Tax Correspondence

Get today's answer for your situation

You just read a 1989 ruling on this question. Ezel checks current Texas tax law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.