Which purchases for a bond-financed air-pollution-control facility were exempt from Texas sales tax?

Plain-English summary

Under Section 2 of the Clean Air Financing Act, the exemption covered the pollution-control facility or a part of it, not every item used around the project.

Materials and equipment financed with Clean Air Financing Act revenue bonds could be bought tax-free with an exemption certificate when incorporated into the facility. Items used on the project but not installed in the facility were taxable.

Certification as an air-pollution-control facility did not make the operating company generally tax-exempt. The letter also said the Regional Waste Disposal Act did not contain a comparable purchase exemption.

Common questions

Were installed materials and equipment exempt? Yes under the stated bond-financing facts.

Were tools or items used but not installed exempt? No.

Did facility certification exempt all company purchases? No.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8812L0923A01

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller December 19, 1988

Dear **:

Thank you for your letter regarding sales tax exemptions for air
pollution control facilities pursuant to the Clean Air Financing Act.

Art. 4477-5a Sec. 2 of the Clean Air Financing Act provides for an
exemption on the "control facilities, or any part thereof," and
not for personal property used but not incorporated into the facility.

Materials and equipment purchases financed by the issuance of revenue
bonds under the Clean Air Financing Act can be purchased tax free by
issuing an exemption certificate to the supplier. However, any mate-
rials or equipment used but not installed in the facility are taxable.

Granting a company certification as an air pollution control facility
does not make the company an exempt entity for sales tax purposes. The
companies are not entitled to purchase tax free any items other that
those outlined above.

The Regional Waste Disposal Act does not contain an exemption for
purchases such as is found in the Clean Air Financing Act.

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 feel free to
call me at 463-4666. You may write to Tax Correspondence, Comptroller
of Public Accounts.

Sincerely,
Jo Ann Dieck
Tax Correspondence