Ezel / Tax Rulings / TX
TX 9107L1123F13 Sales and/or Use Tax (State,Local,MTA) 1991-07-30

Was a charge for underground-storage-tank vapor analysis and a confidential leak-detection report subject to Texas sales tax?

Short answer: No. The report and sample-analysis charge was not taxable, but the provider had to pay sales tax on the tubes, equipment, and other tangible property used to perform the service.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 requester installed accumulation tubes around underground storage tanks, collected vapor samples monthly, analyzed them, and sent confidential reports to tank owners. The tubes were collection points and were not sold.

The Comptroller said the analysis-and-report charge was not taxable. The provider instead had to pay sales tax on all tubes, equipment, and other tangible personal property used to provide the service.

What this means for you

The provider was the consumer of its testing inputs, while the customer-facing analysis and report were nontaxable on the stated facts.

Common questions

Was the report taxable? No.

Who paid tax on the equipment and materials? The service provider.

Citations and references

The letter mentioned EPA-required leak detection but cited no numbered tax or environmental provision.

Source

Original ruling text

July 30, 1991

Dear *****:

Thank you for your recent letter regarding the sales tax laws as they
apply to your system.

Your company manufactures accumulation tubes which are installed around
an underground storage tank and ancillary equipment. A vapor sample is
collected from the accumulation tubes each month and the analysis is
interpreted. This interpretation is generated into a report which is sent
to the tankholder. This information is confidential to the tankholder. The
accumulation tube is not sold to anyone but is installed merely as a
collection point. The tankowner is invoiced for the report generation and
analysis of the sample. The EPA requires underground storage tank owners
to provide leak detection in accordance with state and federal regulations.
These standards are stringent due to the environmental contamination an
undetected leak may cause.

Response: Your company's charge for the report invoiced to the tankholder
is not subject to sales tax. Your company should pay sales tax at the time
of purchase of all tubes, equipment, and other tangible personal property
used in providing this service.

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

If you have any questions or need more information, you may call me toll
free at 1-800-252-5555, extension 3-4633. The regular number is 512/463-4633.

Sincerely,

Wanda Hutcheson
Tax Administration Division

Get today's answer for your situation

You just read a 1991 ruling on this question. Ezel checks current Texas tax law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.