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Ezel / Tax Rulings / TX
TX 8411L0608B02 Sales and/or Use Tax (State,Local,MTA) 1984-11-02

Was a Texas steel seller's labor for flame cutting, sawing, and shearing its steel taxable?

Short answer: Yes. The Comptroller treated flame cutting, sawing, and shearing the seller's steel as taxable remodeling, even when the work changed only the item's size and not its function.

Apply this to your situation

This page answers the general question as of 1984. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1984
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 Texas Comptroller said a steel seller's flame cutting, sawing, and shearing work was taxable remodeling of tangible personal property.

The letter said that, effective October 2, labor to repair, restore, remodel, or maintain tangible personal property had become taxable. It rejected the idea that changing only the steel's size, without changing its function, kept the work outside the taxable category.

What this means for you

Steel sellers and fabricators

Under this 1984 letter, cutting sold steel to a customer's required size was taxable remodeling rather than a nontaxable size adjustment.

Customers purchasing cut steel

The Comptroller treated the cutting, sawing, or shearing function as taxable even if the steel's function stayed the same.

Accountants and tax professionals

The letter identifies an October 2 effective date but does not state the year or cite the underlying law. Verify current Texas law before applying this historical treatment.

Common questions

Q: Was flame cutting, sawing, or shearing the steel taxable?
A: Yes. The letter characterized the work as taxable remodeling.

Q: Did it matter that only the steel's size changed?
A: No. The letter said the lack of a functional change no longer made a difference.

Q: What effective date did the letter give?
A: It said October 2, without identifying a year.

Citations and references

  • The letter cites no statute or administrative rule.

Source

Original ruling text

November 2, 1984

Dear ***:

Thank you for your recent letter regarding flame cutting, sawing and
shearing the steel you sell.

Effective October 2, labor to repair, restore, remodel or maintain
tangible personal property became taxable.

The function you perform on the product is taxable remodeling. The fact
that you are merely changing the size of the item and not changing its
function would no longer make a difference.

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

Please feel free to contact us if you have additional questions.

Sincerely,

Tax Policy Section
Tax Administration Division

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