Ezel / Tax Rulings / TX
TX 9910755L Sales and/or Use Tax (State,Local,MTA) 1999-10-05

Are towing-related charges like scene time and clean time taxable in Texas, and what about the gate fee for storing a towed vehicle?

Short answer: Scene time and clean time charges associated with towing a motor vehicle are not subject to Texas sales tax. But the gate fee charge, associated with motor vehicle storage, is subject to Texas sales tax.

Apply this to your situation

This page answers the general question as of 1999. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1999
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

A towing and vehicle-storage company asked the Comptroller about the sales tax treatment of several specific charges it bills: scene time, clean time, and a gate fee.

The Comptroller drew a clean line based on what each charge is for: scene time and clean time charges, which are associated with towing the vehicle itself, are not subject to Texas sales tax. But the gate fee, which is associated with storing the vehicle after it's towed, is subject to Texas sales tax. The letter invited the company to submit other specific charges for review if it had more questions.

What this means for you

Towing and vehicle-storage companies

Break your invoice into towing-related charges (scene time, clean time, and similar towing-service line items) versus storage-related charges (gate fees and other storage charges). The towing-service side of the business isn't taxed, but storage charges are — bundling them together on a single line risks over- or under-collecting tax.

Accountants and tax professionals

This is a short, useful precedent distinguishing the taxable "storage" component of a towing company's business from the nontaxable towing-service component — a distinction that likely applies to related line items (like the gate fee here) beyond just the two specifically named in this letter.

Common questions

Q: Are scene time and clean time charges for towing a vehicle taxable?
A: No — these towing-related charges are not subject to Texas sales tax.

Q: Is a gate fee for storing a towed vehicle taxable?
A: Yes — storage-related charges like a gate fee are subject to Texas sales tax.

Q: What about other charges my towing company bills that aren't covered here?
A: This letter's holding is limited to the specific charges discussed (scene time, clean time, gate fee); other charges would need their own review with the Comptroller.

Citations and references

No specific Tax Code section or Comptroller rule number is quoted in this letter.

Source

Original ruling text

October 5, 1999

Dear **:

Thank you for your recent letter regarding charges billed by your company in
connection with towing and storing motor vehicles and Texas sales tax.

The charges for scene time and clean time are associated with towing a motor
vehicle and are not subject to Texas sales tax. The gate fee charge is
associated with motor vehicle storage and is subject to Texas sales tax.

If there are other charges you would like reviewed, please let me know.

This opinion is based on the facts presented. Additional or different facts
may yield different results.

You may call me toll free 1-800-531-5441, extension 5-9787, if you have any
questions or need more information. The direct line is 512/305-9787. You may
also write to Tax Policy Division, Comptroller of Public Accounts.

Sincerely,

Philip Knisely
Tax Policy Division

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