Ezel / Tax Rulings / TX
TX 9110L1137B08 Sales and/or Use Tax (State,Local,MTA) 1991-10-01

Could adhesive used to seal boxes be sold tax free in Texas as manufacturing or packaging material?

Short answer: Sometimes. Adhesive was tax free when sold to manufacturers packaging their own products or box manufacturers completing boxes, with an exemption certificate; other buyers owed tax.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 said box-sealing adhesive could be sold tax free in two situations: to manufacturers using it to box products they manufactured, and to box manufacturers using it to complete their boxes. In either case, the manufacturer had to give the adhesive seller an exemption certificate.

Sales to customers that were not manufacturers or processors remained taxable.

What this means for you

The same adhesive product could be exempt or taxable depending on the buyer's activity and use. The seller needed an exemption certificate for the qualifying manufacturing sales and had to collect tax from buyers outside the manufacturer-or-processor category described in the letter.

Common questions

Could a product manufacturer buy the adhesive tax free? Yes, when using it to box products the manufacturer made and providing an exemption certificate.

Could a box manufacturer buy it tax free? Yes, when using it to complete the boxes.

What about a customer that was not a manufacturer or processor? The seller had to collect sales tax.

Citations and references

  • The letter does not identify a numbered statute or administrative rule.

Source

Original ruling text

October 1, 1991

Dear **:

Thank you for your recent letter asking about the change in the law
regarding wrapping and packaging materials.

You stated that you sell adhesive products to customers that use
the product to seal their boxes for resale. Some customers may
manufacture these boxes, some may not.

If your adhesive products are sold to manufacturers to who box
the products they manufacture, or to box manufacturers to use in
the completion of their boxes, you may sell the adhesive products
tax free. The manufacturers must issue you an exemption certificate
in lieu of tax.

Should you sell the adhesive products to persons who are not
manufacturers or processors, you would be required to collect sales
tax on these sales.

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

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