Ezel / Tax Rulings / TX
TX 9104L1097G12 Sales and/or Use Tax (State,Local,MTA) 1991-04-02

Which handling of sand, dirt, and gravel counted as processing, and when was delivery nontaxable?

Short answer: Mixing or crushing was processing; sizing, screening, sorting, washing, or drying was not. Delivery of unprocessed material was nontaxable, while processed material was taxable.

Apply this to your situation

This page answers the general question as of 1991. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1991
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 Comptroller defined processing as modifying or changing tangible property's physical properties. Mixing sand, dirt, or gravel with other materials or crushing it counted as processing.

Sizing, screening, sorting, washing, and drying were identified as nonprocessing activities. Delivery of unprocessed sand, dirt, gravel, and similar material was a nontaxable service, while the same material sold in processed condition was taxable.

What this means for you

The operation performed before delivery controlled the result. The letter drew a specific line between physical modification and the five listed sorting or cleaning activities.

Common questions

Did crushing count as processing? Yes.

Did washing or screening count as processing? No, under the letter.

Was delivery taxable? Delivery of unprocessed material was nontaxable; processed material was taxable.

Citations and references

The letter did not cite a specific statute or rule.

Source

Original ruling text

April 2, 1991

Dear **:

Thank you for your recent letter. As I understand it, you wanted to know

how we define "processed" vs. "unprocessed" sand, dirt, gravel, etc., for

purposes of the exemption for the delivery of such materials in an unprocessed

state.

Processing involves modification or changing of the physical properties

of tangible personal property. Therefore, you are processing sand, dirt,

gravel, etc. when, for example, you mix it with other materials or crush it.

You are not processing such materials by sizing, screening, sorting,

washing, or drying them. These are the only nonprocessing activities we have

yet identified.

The delivery of unprocessed sand, dirt, gravel, and other such materials

is a nontaxable service. But the same materials, sold in a processed

condition, are taxable.

This opinion is based on the questions presented. Different questions,

though similar, might lead to different answers. If you have further questions,

feel free to write or call 1-800-252-5555. My direct extension is 3-3889.

Sincerely,

John Christian

Tax Administration

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