Is cement — Portland or Masonry, including white cement — exempt from Texas sales tax, and what about concrete made from it?

Plain-English summary

The Texas Comptroller's Tax Policy Division responded to a taxpayer's question about the taxability of cement. The letter states that cement, whether it is Portland cement or Masonry cement, is exempt from sales tax because of the specific exemption found in Texas Tax Code Sec. 151.308(a)(4). Because of that exemption, the company was told not to collect sales tax on sales of cement.

The letter draws a clear line, however, between cement itself and products made from it: concrete, including concrete mixes, is taxable. The company was told it must collect sales tax on sales of concrete mixes, even though the underlying cement ingredient is exempt when sold on its own.

The letter also notes it is based on the facts submitted by the taxpayer, and that other, similar facts could yield different results.

What this means for you

Sellers of cement (including white cement)

If you sell Portland or Masonry cement — including cement in white form — this letter indicates that those sales are exempt from Texas sales tax under Tax Code Sec. 151.308(a)(4), and you should not collect sales tax on those sales.

Sellers of concrete or concrete mixes

Even though the cement that goes into concrete is exempt, this letter makes clear that concrete itself, including concrete mixes, is a taxable product. If your company sells concrete or concrete mixes, you must collect sales tax on those sales, separate from how you treat sales of plain cement.

Common questions

Q: Is white cement treated differently from regular Portland or Masonry cement?
A: No. The letter specifically states cement is exempt "whether it is Portland or Masonry," and the subject line of the letter confirms this applies "even in white form."

Q: If cement is exempt, is concrete also exempt?
A: No. The letter distinguishes between cement (exempt) and concrete or concrete mixes (taxable), and directs the company to collect sales tax on sales of concrete mixes.

Q: What is the legal basis for the cement exemption?
A: The letter cites the specific exemption found in Texas Tax Code Sec. 151.308(a)(4).

Citations and references

• Texas Tax Code Sec. 151.308(a)(4)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9503L1337B12

Original ruling text

March 7, 1995

Dear *****:

Thank you for your letter concerning the taxability of cement.

Cement, whether it is Portland or Masonry, is exempt from sales tax
because of the specific exemption found in enclosed Texas Tax Code
Sec. 151.308(a)(4). Do not collect sales tax on sales of cement.
However, products such as concrete are taxable. Your company must
collect sales tax on sales of concrete mixes.

This opinion is based on the facts you submitted. Other facts, though
similar, may yield different results.

You may call me toll free at 1-800-531-5441, ext. 5-0030. The direct
line is 512/475-0030. You may also write to Tax Administration,
Comptroller of Public Accounts.

Sincerely,

David Somerville
Tax Administration Division