Are replacement parts for shaker screens and sand screws, and a concrete reclaimer, exempt from Texas sales tax as manufacturing equipment at a sand/gravel processing plant?

Subject

Sand/Gravel/Aggregate/Concrete Processing Plant — Exempt/Non Exempt Equipment (Dredge Piping, Watering Recycling, Shakers, Washers, Classifiers, Crushing Equipment, Conveyors, Screening, Front End Loaders, Sand Screws, Reclaimer, Drill, Hopper

Plain-English summary

A trade association asked the Comptroller about the sales tax status of three specific pieces of equipment used at sand/gravel/aggregate/concrete processing plants. The Comptroller's answer draws a line based on where a part is used in the production process, not just what type of equipment it is:

• Shaker screen replacement parts -- exempt only when the shaker screens are used after the manufacturing process has begun (for example, after the material has already been crushed). If the shaker screens are used before manufacturing begins, replacement parts for them are taxable.
• Sand screw replacement parts -- exempt. Sand screws sort, separate, grind, crush, and clean materials, which the letter treats as part of the manufacturing process.
• Concrete reclaimer -- exempt manufacturing equipment. A concrete reclaimer separates the water, sand, and gravel in leftover concrete and routes each ingredient into separate holding areas.

What this means for you

Sand, gravel, and aggregate processors

Whether a shaker screen part is taxable turns on when in the process that particular screen operates -- screens doing pre-manufacturing work (e.g., initial separation before crushing) are treated differently from screens working on material after crushing/manufacturing has started. Track where each shaker screen sits in your production sequence when deciding how to handle sales tax on its replacement parts.

Concrete producers and recyclers

Concrete reclaimers used to separate and recover water, sand, and gravel from concrete are exempt manufacturing equipment, so replacement parts and (per the general manufacturing exemption this letter applies) the equipment itself should not be taxed.

Accountants and tax professionals

This letter is a useful, narrow data point on how the Comptroller applied the manufacturing exemption to specific aggregate/concrete-plant equipment in 1996: the controlling question for shaker screens is the stage of the process the screen operates in, while sand screws and concrete reclaimers were treated as categorically exempt based on their function (sorting/separating/grinding/crushing/cleaning, or separating concrete into its components).

Common questions

Q: Are all shaker screen replacement parts exempt from Texas sales tax?
A: No. Per this letter, they're exempt only when the shaker screens are used after the manufacturing process has begun (such as after crushing). Parts for shaker screens used before manufacturing begins are taxable.

Q: Are sand screw replacement parts exempt?
A: Yes. The letter states members may claim exemption from tax on replacement parts for sand screws, which sort, separate, grind, crush, and clean materials.

Q: Is a concrete reclaimer exempt equipment?
A: Yes. The letter identifies the concrete reclaimer as exempt manufacturing equipment because it separates water, sand, and gravel from concrete into separate holding areas.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9603229L

Original ruling text

March 20, 1996

Dear **:

You asked about the tax exempt status of the following:

Replacement parts for shaker screens-your members may claim exemption from tax
on replacement parts for shaker screens when the screens are used after the
manufacturing process has begun, e.g., crushing. Tax is due on replacement
parts for shaker screens that are used before the manufacturing process has
begun.

Replacement parts for sand screws-your members may claim an exemption from tax
on replacement parts for sand screws. For the record, sand screws sort,
separate, grind, crush and clean materials.

Concrete reclaimer-this equipment is exempt manufacturing equipment. A concrete
reclaimer separates the water, sand and gravel in concrete and puts these
ingredients in separate holding areas.

I hope this satisfactorily answers your questions. Should you have additional
questions, please contact me at 111 E. 17th Street, Austin, Texas 78774, or
call me at 1-800-531-5441, extension 3-4004.

Sincerely,

Wade Anderson
Director, Tax Policy