Which sewer, drain, septic-tank, grease-trap, transportation, and disposal charges did Texas treat as taxable for residential and nonresidential property?

Plain-English summary

Cleaning sewer and rain lines on nonresidential property was taxable, while the same work on residential property was not.

Septic-tank cleaning was nontaxable for both residential and nonresidential property, and the waste-transport charge for that service was also nontaxable.

Cleaning a nonresidential grease trap connected to sewer lines was taxable as real-property repair unless it was scheduled periodic work on operating and functioning property that qualified as maintenance under Rule 3.357. Disposal charges were taxable regardless of whether the waste came from a residence or business.

For a grease trap in an enclosed system not connected to sewer lines, the cleaning, transportation, and dumping charges were all taxable under Rule 3.356. Scheduled or periodic service did not create an exemption for that system.

Common questions

Residential sewer-line cleaning taxable? No.

Nonresidential sewer-line cleaning taxable? Yes.

Septic-tank cleaning taxable? No, whether residential or commercial.

Enclosed grease-trap service taxable? Yes, including cleaning, transport, and dumping.

Citations and references

• Comptroller Rules 3.356 and 3.357.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9008L1035A01

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

August 13, 1990

Dear **:

Thank you for your letter concerning the taxability of various
services you provide.

As of January 1, 1988, cleaning sewer and rain lines on nonres-
idential property became a taxable service. This service is
not taxable if the work is done on residential property.

Cleaning septic tanks on nonresidential or residential property
is not a taxable service. You should not charge tax on the trans-
portation of the waste materials.

Charges for cleaning non residential grease traps which are lo-
cated in the sewer lines are taxable as real property repair
unless the service qualifies as maintenance under the enclosed
Comptroller's Rule 3.357. In order to qualify as maintenance,
the service must be scheduled periodic work on operating and
functioning property (see section (a)(3). If your service quali-
fies as maintenance, the charge is not taxable. Otherwise, the
charges will be taxable as labor to repair nonresidential real
property. All charges to dispose of waste are taxable as a real
property service, regardless if the waste comes from a residence
or a business.

Charges to clean grease traps which are not connected to the
sewer lines (i.e., an enclosed system) are taxable. Your charges
for cleaning, transporting and, if applicable, dumping are all
taxable. These charges are taxable under the enclosed Comptrol-
ler's Rule 3.356. There is no exemption even if the service is
scheduled or periodic.

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, please contact Tax Correspondence or
you may write to me at the above address. You may call toll free
1/800/252-5555, or our regular number is 512/463-4600. My exten-
sion is 3-4278.

Sincerely,
Onofre Guerra
Tax Correspondence