Did a city have to collect Texas sales tax on garbage collection and a separate alley-maintenance fee when it contracted with a private collector?

Plain-English summary

The city had to collect and report sales tax on garbage-collection services beginning on or after October 1, 1987. It collected residents' fees, forwarded them to a private collector after retaining a five-percent collection fee, and could give that collector a properly completed resale certificate.

The city's separate monthly alley-maintenance fee was also taxable. The described fee covered mowing and hauling away brush and other large items.

What this means for you

The historical letter treated the city as reselling the private collector's garbage service to residents and separately taxed the city's alley-maintenance charge.

Common questions

Did the city have to tax garbage collection? Yes, for services beginning on or after October 1, 1987.

What did the city give the private collector? A properly completed resale certificate.

Was the alley-maintenance fee taxable? Yes.

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/8710L0844C11

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

October 29, 1987

Dear ***:

Thank you for your recent letter concerning the taxability of garbage and
trash collections.

You state that the city of *** has a contract with COMPANY A
for gar-
bage collection which expires in August, 1988. You state that the city
of ***** collects the fee and sends it on to COMPANY A less a 5
percent
collection fee.

You further state that the City of *** has an alley maintenance
fee it
charges monthly for cost mowing, hauling off brush and other large items.
Your questions are:

1. Does the City need to start collecting sales tax on garbage
   collections? If so, when.

2. What, if anything, does the City of *** need to furnish to
   COMPANY A?

3. Does the City of *** need to collect sales tax on the alley
   maintenance fee?

Answer: 1. Yes. Garbage collection services beginning on or after
October 1, 1987, are taxable. The city must collect and report the
tax.

Answer: 2. The City of *** may issue COMPANY A a properly
completed
resale certificate.

Answer: 3. Yes.

This opinion is based on the facts presented. If there are additional or
different acts, 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,
(Mrs.) Jo Ann Dieck
Tax Policy Division