Is a concrete pumping charge (using a primer to slick the pump's pipe) taxable, and is concrete sawing taxable on new construction versus a remodeling job?

Plain-English summary

A concrete services company asked two distinct questions, both answered cleanly:

1. Is concrete pumping taxable? The company uses a purchased primer to "slick" the concrete pump's pipe so concrete flows through smoothly -- functionally the same purpose as the water a concrete truck sprays on its metal chutes. The Comptroller's answer: a charge for pumping concrete that was sold by a third-party retailer to the foundation contractor is not subject to sales tax. (The letter doesn't need to reach the primer question directly -- the pumping service itself, applied to concrete supplied by someone else, isn't taxable.)

2. Is concrete sawing taxable, and does a resale certificate help on a remodel? This depends entirely on the type of job:

• Sawing concrete as part of a new construction contract is not taxable.
• Sawing concrete as part of a non-residential remodeling contract is taxable -- but the sawing contractor doesn't have to collect the tax if the general contractor provides a resale certificate in lieu of tax.

This tracks the same new-construction-vs.-remodeling distinction that runs throughout this corpus's real-property-service letters, plus a practical resale-certificate escape valve specific to this fact pattern: a subcontractor doing purely-remodel sawing work can avoid collecting tax directly if its customer (the general contractor) hands over a properly completed resale certificate instead.

What this means for you

Concrete pumping and sawing subcontractors

Pumping concrete supplied by a third party isn't taxable on its own. Sawing is taxable only on remodeling jobs (not new construction) -- and even then, you can skip collecting tax if the contractor you're working for gives you a resale certificate.

General contractors on remodeling jobs

If you want your concrete-sawing subcontractor to skip charging you tax on a remodel job, provide a resale certificate rather than assuming the "new construction" exemption applies -- remodeling and new construction get different default tax treatment.

Accountants and tax professionals

A practical companion to the other concrete-cutting letters in this corpus: this one specifically highlights the resale-certificate option as a way for a subcontractor to avoid direct tax collection on an otherwise-taxable remodeling-related sawing charge.

Common questions

Q: Is a concrete pumping charge taxable?
A: Not when it's pumping concrete that was sold by a third-party retailer to the contractor.

Q: Is concrete sawing taxable on a new construction job?
A: No.

Q: Is concrete sawing taxable on a nonresidential remodeling job?
A: Yes, unless the sawing contractor accepts a resale certificate from the general contractor instead of collecting tax.

Q: Can I rely on this letter for my own concrete business?
A: No. It is based on the specific facts presented and can only be relied on by the taxpayer to whom it was issued.

Citations and references

This letter applies general Comptroller policy on the new-construction/remodeling distinction and resale-certificate mechanics for real property services; it does not cite a specific numbered Tax Code section or rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9904416L

Original ruling text

April 19, 1999

Dear **:

Thank you for your recent letter which is restated in part with response below.

I need your assistance in determining the taxability of a service provided to
contractors. When pumping concrete we use a primer that we purchase. This
primer is used to simply slick the pipe of the concrete pump so the concrete
will flow through the pipes. Just as a concrete truck comes out to the job, he
sprays water on the metal shoots to let the concrete slide. We use primer to do
the same thing. Is my charge for concrete pumping taxable?

Response: Your charge for pumping concrete sold by a third-party retailer to
the foundation contractor is not subject to sales tax.

We also cut concrete. When is sawing concrete taxable on any new construction?
Is concrete sawing taxable on a remodel if we don't have a resale certificate?

Response: Charges for sawing concrete as part of a new construction contract
are not subject to sales tax. Charges for sawing concrete as part of a
non-residential remodeling contract are subject to sales tax. You are not
required to collect sales tax on your charge for concrete sawing on the
remodeling job if you accept a resale certificate from the contractor in lieu
of tax.

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

You may call me toll free at 1-800-531-5441, ext. 3-4680. The direct line is
512/463-4680. You may also write to Tax Policy, Comptroller of Public
Accounts. The email address is .

Sincerely,

Al Van Allen
Tax Policy Division