How did Texas distinguish nontaxable industrial-solid-waste collection from taxable office-trash collection in a mixed container?

Plain-English summary

The Comptroller used the Texas Solid Waste Disposal Act to define industrial solid waste as waste resulting from manufacturing, mining, or agricultural operations. The letter excluded liquid or semi-liquid waste subject to the Texas Water Quality Act, plus waste from service industries, retail establishments, and manufacturing-support activities such as office waste and shipping refuse.

When industrial solid waste and taxable office trash shared one receptacle, the customer could give the collector an exemption certificate stating that it was buying both taxable and nontaxable waste collection and would pay tax directly to the Comptroller. The customer then had to determine the taxable-waste percentage and report tax on that portion of the charge.

What this means for you

The letter required a reasonable allocation when one collection charge covered both categories. It did not allow the presence of industrial waste to make the entire mixed collection nontaxable.

Common questions

What counted as industrial solid waste? Waste from manufacturing, mining, or agricultural operations, subject to the exclusions stated in the letter.

Did office trash count? No. The letter treated office waste as outside the industrial-solid-waste definition.

How was a mixed container handled? The customer could document the mixed purchase and report tax directly on the percentage representing taxable waste collection.

Citations and references

• Texas Solid Waste Disposal Act, used for the industrial-solid-waste definition.
• Texas Water Quality Act, referenced for excluded liquid or semi-liquid 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/9008L1038F01

Original ruling text

August 20, 1990

Dear **:

You wrote to us requesting more information about sales tax on waste removal.
More specifically, you asked about industrial solid waste. Thank you for your
patience as we've struggled to define that term.

As much as we hate to refer folks to another statute, it seems to be the most
reasonable way to define such a term. We will use the definition found in the
Texas Solid Waste Disposal Act.

That means industrial solid waste is waste resulting from any process of
manufacturing, mining or agricultural operations. But it does not include
liquid or semi-liquid waste which is subject to the Texas Water Quality Act.
And it does not include waste from service industries, retail establishments,
or manufacturing support activities such as office waste and shipping refuse.

If you have both office trash and industrial solid waste in the same
receptacle, you should give the collector an exemption certificate stating that
you are buying taxable and non-taxable waste collection and you will pay tax on
the taxable portion directly to the Comptroller.

You should then determine the percentage of waste that represents taxable waste
collection and report and pay tax to us on that portion of the charge.

Thanks again for your patience. If you have any questions or need more
information, please call me. The toll-free number is 1-800-531-5441. The
regular number is 512/463-4614 or you may write me at the Taxability Section of
Legal Division. [(Fax) 512-473-4617]

Sincerely,

Adina Whittemore
Taxability, Legal Division