Is the labor to clean a non-residential septic tank or sewer holding tank taxable in Texas?

Plain-English summary

A taxpayer asked the Texas Comptroller's Tax Policy Division to confirm that cleaning non-residential septic tanks or sewer holding tanks is taxable if the cleaning isn't done on a scheduled basis. The Comptroller confirmed a two-part rule:

• Scheduled, periodic cleaning of non-residential septic tanks and sewer holding tanks is treated as maintenance labor, which is nontaxable.
• Cleaning performed when the tank is stopped up, or on a nonscheduled basis, is treated as repair labor, which is taxable.

The letter is short and does not cite any specific statute or administrative rule — it simply states the Comptroller's position on how the timing/regularity of the cleaning service determines whether the labor charge is subject to Texas sales tax.

What this means for you

Septic tank and sewer holding tank service providers

Whether you need to charge sales tax on your cleaning labor depends on how the service is scheduled, not on what the service physically involves. If you clean a customer's non-residential tank on a regular, pre-set schedule (for example, cleaning it every quarter regardless of its condition), that labor is nontaxable maintenance. If you're called out to clean a tank because it's stopped up, or you clean it on an as-needed/nonscheduled basis, that labor is taxable repair labor and you should collect sales tax on the charge.

Business owners and property managers who hire tank-cleaning services

Expect to pay sales tax on emergency or as-needed septic/sewer tank cleaning calls (i.e., when a tank is stopped up), but not on cleaning performed under a regular maintenance schedule. If you want to avoid tax on routine service, consider setting up a scheduled, periodic cleaning arrangement with your vendor.

Accountants and tax professionals

When reviewing invoices for tank-cleaning services, look at whether the service was performed under a standing schedule or in response to a specific problem (a stoppage) or on an ad hoc basis. That distinction — not the nature of the work itself — is what the Comptroller uses to classify the labor as nontaxable maintenance versus taxable repair.

Common questions

Q: Is cleaning a non-residential septic tank taxable in Texas?
A: It depends. If the tank is cleaned on a scheduled, periodic basis, the labor is nontaxable maintenance labor. If it's cleaned when stopped up or otherwise on a nonscheduled basis, the labor is taxable repair labor.

Q: What makes tank-cleaning labor "maintenance" instead of "repair" for tax purposes?
A: According to this letter, the key factor is whether the cleaning happens on a scheduled, periodic basis. Scheduled cleaning is maintenance (nontaxable); cleaning triggered by a stoppage or done on an unscheduled basis is repair (taxable).

Q: Does this ruling cite a specific statute or rule?
A: No. The letter as issued does not reference any Tax Code section or Comptroller rule by number — it simply states the Comptroller's position in response to the taxpayer's question.

Q: Does this ruling apply to residential septic tanks?
A: The letter specifically addresses non-residential septic tanks and sewer holding tanks; it does not address residential tanks.

Citations and references

No statutes, rules, or cases are cited in the original letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9507L1358E06

Original ruling text

July 24, 1995

Dear *****:

On July 20, 1995, you asked that I confirm that the cleaning
of non-residential septic tanks or sewer holding tanks is taxable if not
performed on a scheduled basis. If septic tanks and sewer holding tanks are
cleaned on a scheduled periodic basis the labor to do so is considered
maintenance labor which is nontaxable.

On the other hand, if the septic holding tanks are cleaned when stopped-up
or cleaned on a nonscheduled basis, the labor is taxable as repair labor.

I hope this confirms your understanding of the taxability of
these charges. Please feel free to contact me should you have any other
questions at 111 East 17th Street, Austin, Texas 78774 or call me at 1-800
531-5441, extension 3-4004.

Sincerely,

Wade Anderson
Assistant Director
Tax Administration

NOTE: Previous Accession Number 9507306L