When was a manufacturer's waste removal nontaxable as industrial solid waste, and what certificate did the hauler need?

Plain-English summary

Removing industrial solid waste from manufacturing, mining, or agriculture was not taxable. The definition excluded liquid or semiliquid waste subject to the Water Quality Act and waste from service industries, retail establishments, offices, shipping, and manufacturing support.

The hauler was told to treat service as taxable unless the customer supplied a valid, completed exemption certificate. This certificate was too vague, and more invoice and waste-mixing facts were required for a refund.

What this means for you

A manufacturing customer did not make every waste stream exempt; waste type, mixing, and certificate detail mattered.

Common questions

Was office or shipping waste exempt? No.

What should the hauler do without a valid certificate? Treat the service as taxable.

Citations and references

• 34 Tex. Admin. Code Rule 3.356(a)(3)(E) and (h)
• Texas Solid Waste Disposal Act; Texas Water Quality Act

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9204L1164B11

Original ruling text

April 6, 1992

Dear ***:

Thank you for your letter of March 23, 1992, concerning the
validity of an exemption certificate from COMPANY ABC.

As I understand it, COMPANY X provides garbage and waste removal
services for several manufacturing operations, including
COMPANY ABC. COMPANY ABC has requested a refund of tax paid
on waste removal in regards to their manufacturing operation.
You question whether the hauling of waste for manufacturers
is exempt from tax and, if so, can all manufacturers qualify
for an exemption.

Section (a)(3)(E) of Rule 3.356, Real Property Services, excludes
industrial solid waste from the definition of garbage or other
solid waste. The removal of industrial solid waste is not a
taxable service.

The definition of industrial solid waste is found in the Texas
Solid Waste Disposal Act. Industrial solid waste is waste resulting
from any process of manufacturing, mining, or agriculture
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
stablishments, or manufacturing support activities such as office
waste and shipping refuse.

You should assume that your waste removal service is taxable
unless your customer issues you a valid and properly completed
exemption certificate. The reason for exemption on the exemption
certificate you received from COMPANY ABC is to vague to qualify
for exemption. Before we can authorize a refund of sales tax, it
will be necessary to have more information. For example, we do
not have copies of the "noted invoices" nor information whether
or not office waste is combined with industrial solid waste.
Please refer to Section (h) of Rule 3.356, Real Property Services,
for the proper procedures in accepting exemption certificates for
your services.

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

If you have any questions or need additional information, you may
call toll free 1-800-252-5555 or the regular Austin number is
512-463-4600. You may also write to Tax Administration Division.

Sincerely,

Lindey Osborne
Tax Administration Division