Were charges taxable for moving finished steel within a manufacturer's yard and for separately stated collection and disposal of its industrial waste?

Plain-English summary

A trucking company's fee for moving finished steel from one point to another within the manufacturer's yard before the steel was sold was not subject to sales tax.

A separately stated fee to collect and dispose of industrial solid waste from steel manufacturing was also not taxable. But the exemption did not cover waste that met the definition of garbage or municipal solid waste, so collecting office rubbish or garbage remained taxable.

If office trash and industrial solid waste were commingled, the company could issue the service provider the certificate described in Rule 3.356(h).

Common questions

Was moving finished steel around the plant yard taxable? No, when the movement occurred before the steel was sold.

Was industrial-waste collection taxable? Not when separately stated and limited to qualifying industrial solid waste.

What about office trash mixed with industrial waste? Office rubbish or garbage was taxable, and the letter pointed to Rule 3.356(h)'s certificate procedure for commingled waste.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9004L1018B06

Original ruling text

April 20, 1990

Dear *****:

Thank you for your letters dated April 11, 1990 concerning the taxability of
transporting COMPANY'S finished steel products to various areas of COMPANY'S
yard, and the taxability of the collection and disposal of slag and other waste
products resulting from your steel manufacturing operations.

The fee charged by a trucking company to move finished steel from one point to
another within COMPANY'S yard prior to the sale of the steel to a customer is
not subject to sales tax.

A separately-stated fee for the collection and disposal of industrial solid
waste is not taxable. Please note that industrial solid waste which meets the
definition of garbage or municipal solid waste is excluded from this exemption.
In other words, collection and disposal of office rubbish or garbage is
taxable. Companies that commingle office trash with industrial solid waste may
issue a certificate to the service provider as outlined in section (h) of the
enclosed Rule 3.356 on real property services.

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

Please feel free to contact me if you have any additional questions. You may
write me, call toll free 1-800-252-5555 (ext. 3-4685) from anywhere in the
United States or phone 512/463-4685.

Sincerely,

Julie Pesl
Tax Correspondence