When could buyers of trash containers or compactors give a resale or exemption certificate instead of paying Texas sales tax?

Plain-English summary

Garbage collection or removal became taxable October 1, 1987. A customer buying equipment could issue a resale certificate if it transferred the equipment to its own customer in performing that taxable service, or if it bought for resale, lease, or rental. A buyer using the equipment itself could not. A municipality buying for its own use could issue an exemption certificate.

What this means for you

The certificate depended on the equipment's disposition, not merely the buyer's waste-hauling business. Transfer or resale supported a resale certificate; the buyer's own use generally did not.

Common questions

Could a hauler issue a resale certificate for its own-use equipment? No.

What if the equipment was transferred to the service customer? A resale certificate could be used.

What about later resale, lease, or rental? A resale certificate could be used.

Could a municipality claim exemption for own use? Yes, by exemption certificate.

Citations and references

• No statute or rule number is cited in the ruling text.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8709L0831G10

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

September 3, 1987

Dear ***:

Thank you for your letter requesting information regarding your tax
responsibility on the sales of trash containers, compactors, etc. to
municipalities and garbage haulers.

Effective October 1, 1987, garbage or other solid waste collection or
removal
will become a taxable real property service. Your are required to either
collect tax or accept a valid resale exemption certificate in lieu of the
tax. Please find below a list of various situations and how the tax
should
be handled in each:

1) If your customer will be transferring the equipment purchased from
you
to its customers in the performance of the taxable service, he may issue
a resale certificate in lieu of paying the tax. If the equipment is not
transferred to his customer, he may not issue a resale certificate.

2) If your customer is purchasing equipment from you for his own use he
may
not issue a resale certificate in lieu of paying the tax.

3) If your customer purchases the equipment for subsequent resale, lease
or
rental he may issue a resale certificate in lieu of the tax.

4) If a municipality purchases the equipment for its own use, an
exemption
certificate may be issued in lieu of the tax.

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

If you have any questions or need more information, please call me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Policy Division.

Sincerely,
Jo Ann Dieck
Tax Policy Division