Is beaver trapping and dam removal on timberland taxable as a structural pest control service?

Subject

Beaver Trapping And Removal From Timberlands Not Taxable As A Structural Pest Control Service

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9306L1243G06

Plain-English Summary

This is a June 22, 1993 letter ruling from the Texas Comptroller's Tax Administration Division, responding to a June 7, 1993 letter from a timber company. The taxpayer's firm plants, grows, and harvests timber in East Texas. Beavers build dams in creeks on the property, which floods the timberland, so the company hires an outside firm to trap and remove the beavers and destroy the dams.

The Comptroller held that this beaver trapping and dam removal service is not taxable as a structural pest control service. Under Texas Tax Code Sec. 151.0048(6), a structural pest control service is only a taxable real property service if it is covered by Section 2 of the Texas Structural Pest Control Act. The letter explains that removing pests from timberlands is not covered by that Act, so the beaver trapping and removal service falls outside the taxable category. The letter also notes that 34 Tex. Admin. Code Rule 3.356, which governs the taxation of real property services (and whose subsection (a)(8) defines "structural pest control services" for sales and use tax purposes), was enclosed with the response.

The Comptroller cautioned that the opinion is based on the facts presented, and could change if additional or different facts were involved.

What This Means For You

If you own or manage timberland

Hiring a service to trap and remove beavers (or destroy their dams) to prevent flooding of timber-growing land is not, under this ruling, a taxable structural pest control service — because timberland pest removal isn't covered by the Texas Structural Pest Control Act, which is what Sec. 151.0048(6) uses to define taxable structural pest control.

If you provide wildlife trapping or pest removal services

Whether a pest removal service is taxable as a real property service turns on whether it's covered by the Texas Structural Pest Control Act. Services performed on timberland, like beaver trapping and dam removal, fall outside that Act's coverage and outside this taxable category, according to this ruling.

If you are an accountant or tax professional advising on real property services

This ruling illustrates that "structural pest control services" for sales tax purposes (Tax Code Sec. 151.0048(6) and Rule 3.356(a)(8)) is a defined, narrower category tied to the Texas Structural Pest Control Act — not every form of pest or wildlife removal qualifies, and the specific facts (what land, what activity, and what act governs it) matter to the outcome.

Limits of this letter

The Comptroller expressly noted this opinion is based on the facts presented and could change with additional or different facts. As a taxpayer-specific letter ruling, it also only provides reliance protection to the taxpayer who received it (see 34 Tex. Admin. Code Rules 3.1 and 3.10).

Q&A

Q: Is beaver trapping and dam removal on timberland taxable as a structural pest control service in Texas?
A: No. The Comptroller ruled it is not taxable, because pest removal from timberlands is not covered by the Texas Structural Pest Control Act, which Tax Code Sec. 151.0048(6) relies on to define taxable structural pest control services.

Q: What was the taxpayer's business?
A: A firm that plants, grows, and harvests timber in East Texas, where beavers were building dams in creeks and flooding the timberland.

Q: What statute governs whether pest control is a taxable real property service?
A: Texas Tax Code Sec. 151.0048(6), which treats structural pest control services as a taxable real property service only if they are covered by Section 2 of the Texas Structural Pest Control Act.

Q: What administrative rule was cited or provided?
A: Rule 3.356, concerning the taxation of real property services, with subsection (a)(8) defining "structural pest control services" for sales and use tax purposes.

Q: Could this outcome change with different facts?
A: Yes. The letter states the opinion is based on the facts presented, and the opinion may change if there are additional or different facts.

Q: Can other taxpayers rely on this letter?
A: Only the taxpayer who received it can treat it as the basis for detrimental reliance, per 34 Tex. Admin. Code Rules 3.1 and 3.10; it may also no longer reflect current Comptroller policy.

Original ruling text

June 22, 1993

Dear ***:

Thank you for your letter of June 7, 1993, concerning the taxability
of beaver trapping and removal services.

Your firm plants, grows, and harvests timber in East Texas. Beavers
build dams in creeks causing flooding of the timber land. An outside
firm is engaged to remove the beavers and destroy the dams.

Section 151.0048 (6) of the Texas Tax Code states that a structural
pest control service covered by section 2, Texas Structural Pest Control
Act is a real property service. The activity of removing pests from
timberlands is not covered by this act.

Rule 3.356 concerning the taxation of real property services is enclosed.
Section (a)(8) defines structural pest control services for sales and use tax
purposes.

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

You may call me toll free at 1-800-531-5441, ext. 5-0613. The direct
line is 512/475-0613. You may also write to Tax Administration Division,
Comptroller of Public Accounts.

Sincerely,

Kevin Koller
Tax Administration Division

NOTE: Previous Accession Number 9308008L.2 and/or 9308008L