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Ezel / Tax Rulings / TX
TX 8501L0612E08 Sales and/or Use Tax (State,Local,MTA) 1985-01-04

Was cleaning the inside of a Texas well bore with hot oil taxable, and did the letter decide franchise-tax filing?

Short answer: The hot-oil well-bore cleaning service was taxable. The letter did not decide whether the New Mexico corporation owed a Texas franchise-tax report; that answer was deferred to separate correspondence.

Apply this to your situation

This page answers the general question as of 1985. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1985
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 ruled that cleaning the inside of a well bore with hot oil was taxable.

The requester also asked whether a New Mexico corporation doing business in Texas and holding a certificate to do so was subject to the Texas franchise-tax report. This letter did not answer that question; it said a separate response would follow.

What this means for you

Hot-oil and well-service businesses

The Comptroller treated the described hot-oil well-bore cleaning as a taxable service.

Multistate corporations

Do not use this letter as authority on Texas franchise-tax filing. The body expressly deferred that issue.

Accountants and tax professionals

The official STAR subject focuses on hot-oil treatment, which is the only issue actually decided in the letter.

Common questions

Q: Was cleaning a well bore with hot oil taxable?
A: Yes.

Q: Did payment of vehicle use tax on the trucks make the service exempt?
A: No exemption was stated; the Comptroller still held the cleaning service taxable.

Q: Did the letter decide the New Mexico corporation's franchise-tax obligation?
A: No. That question was reserved for a separate response not included in this STAR record.

Citations and references

The letter did not cite a specific statute or administrative rule.

Source

Original ruling text

January 4, 1985

Dear ***:

Thank you for your recent letter and fact situation restated below:

  1. A New Mexico Corporation does business in Texas and does have a
    certificate to do so.

Question: Is this Corporation subject to the Texas Franchise Tax Report?

Response: You will receive a response to this question under separate
cover.

  1. The Company is in the business of servicing wells using Hot Oil
    Units.A vehicle use tax is being paid on the trucks. Question Is the Hot Oil
    service subject to Texas sales tax?

Response: Cleaning the inside of the wellbore using hot oil is taxable.

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

You may write to the Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division

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