The place to find business sales tax information

— as well as solutions, services and jobs!

We are a service company. It is my understanding that you do not tax services? Is that correct?

Full Question: We are a grease trap service company which removes grease from underground/ above ground traps for restaurants. We also un-clog any debris that may be in their line. It is my understanding of tax laws that you do not tax a customer for a service provided. Sales tax only applies to goods (an item purchased). One of our customers asked why we do not tax, she wants to know where it is written (a law that pertains to this)we are not suppose to charge her sales tax.

Brought to you by:

NOTE: This site does NOT provide client-specific tax advice. Information provided is general and may NOT apply to your particular situation. Do NOT take any action based upon any site content until you have received advice from an independent, qualified tax practitioner with whom you have a professional-client relationship. All content is subject to our disclaimer.


Diane Yetter photoWhile many professional services are not subject to Texas sales and use tax, Texas tax code specifies that the removal of garbage, rubbish, or other solid waste is a taxable "real property service." Only the removal of the following types of waste is tax-exempt:
  • hazardous waste
  • industrial solid waste
  • waste material that results from an activity associated with the exploration, development, or production of oil, gas, geothermal resources, or any other substance or material regulated by the Railroad Commission of Texas under Section 91.101 NAT. RES., Natural Resources Code
  • domestic sewage or an irrigation return flow, to the extent the sewage or return flow does not constitute garbage or rubbish
  • industrial discharges subject to regulation by permit issued pursuant to Chapter 26, Water Code
As such, you should be collecting and remitting sales tax on the waste hauling services, unless the waste meets one of the above tax-exempt criteria. If the waste being collected is tax-exempt, you may accept an exemption certificate from the customer in lieu of tax. The exemption certification must state the type of waste being excluded, and whether the waste being collected is totally excludable or that the customer has both taxable and nontaxable waste and the customer will be responsible for accruing tax on the portion of the charge which is taxable. The customer may use any reasonable allocation for reporting tax on taxable services which is supportable by books and records. If the removal of the waste does qualify as an exempt type of waste, any services related to un-clogging debris is likely considered a taxable repair service and tax should be charged on that service.

(Not quite what you need? View SALES TAX QUESTIONS home page to access other topics or use site-wide SEARCH in upper right)


Access to any portion of is contingent upon your acceptance of our Terms of Use. This Web Site and content provided by STS Publishing, LLC and its third party content providers, including, but not limited to information, documents, forms, comments, advice and opinions, is for informational purposes only, and is not a substitute for professional advice, nor does the use of this Web Site constitute a professional-client relationship. The Web-Site also includes advertisements, directory listings, job postings and links to third party web sites, all of which are provided for your convenience only and in no way constitute a referral, endorsement, or warranty by of any product or service provided by such third parties. All content is provided “as is” with no guarantee regarding accuracy, suitability, or timeliness. Your reliance on any content accessed on or through the Web Site, or on any product or service provider is strictly at your own risk.