Ezel / Tax Rulings / TX
TX 9005L1019D07 Sales and/or Use Tax (State,Local,MTA) 1990-05-11

Was removing and draining an underground fuel tank and replacing it with another tank taxable, and what if the same tank was repaired and reinstalled?

Short answer: Removing an underground fuel tank, draining it, and replacing it with another tank was nontaxable. Repairing the same tank and placing it back was taxable.

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This page answers the general question as of 1990. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1990
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 Taxability Division had reevaluated underground fuel-tank work. Removing a tank, draining it, and replacing it with another tank was nontaxable.

If the same tank was repaired and then placed back, the job was taxable.

Common questions

Was removal, draining, and replacement with another tank taxable? No.

Was repair and reinstallation of the same tank taxable? Yes.

Source

Original ruling text

May 11, 1990

Dear ***:

We received your letter concerning removal and/or replacement of
underground fuel storage tanks.

This issue has been reevaluated by our Taxability Division.

The charge for removing an underground fuel storage tank, draining
it and replacing it with another is not taxable. However, if the
same tank is repaired and placed back, the job is taxable.

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

If you have any questions you may call or write 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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