| Texas
Tax Code Section 151.007(a)(2) defines the sales price of a taxable
item as the total amount a taxable item is sold for without a deduction
for materials, labor or service employed, or other expenses. The disposal
fee is an expense the seller incurs for disposing of used tires.
The
fee for transporting the scrap tires from the dealers to the recyclers
is taxable as waste collection and removal [see Rule 3.356(a)(3)
concerning real property services].
The
sales tax is a transaction tax. The taxation of the fee as part
of the sales price of a new tire is a separate transaction from
the payment of a fee to the transporter removing scrap tires. The
consumer pays the tax on the purchase of new tires and the dealer
pays tax for the removal of the waste or scrap tires.
OTHER
IMPORTANT TAX ISSUES
- STATE
TAX COLLECTED BY TRANSPORTERS MUST BE CHARGED AT THE APPROPRIATE
RATE FOR THE GENERATOR LOCATION WHERE SERVICE IS PERFORMED.
- TEXAS
HAS HUNDREDS OF TAX JURISDICTIONS (LOCAL TAX DISTRICTS). A GENERATOR
LOCATION WILL BE IN ONE OR MORE OF THESE JURISDICTIONS. THE TAX
COLLECTED WILL BE A TOTAL OF ALL APPLICABLE JURISDICTIONS.
- STATE
LAW REQUIRES PAYMENT OF THE TAX COLLECTED FOR WASTE COLLECTION/TRANSPORTATION
BE FILED BY JURISDICTION. EACH LOCAL DISTRICT MUST BE SUBTOTALED
ON THE TAX REPORT (second page of the Texas Sales and Use Tax
Return [01-114]). FAILURE TO BREAK OUT ALL OF THE LOCAL TAX DISTRICTS
WHERE TAX IS COLLECTED IS A CRIMINAL OFFENSE.
- GATE
FEES AT A PROCESSOR LOCATION THAT SENDS MATERIAL TO A LANDFILL
IS TAXABLE (Rule 3.356 [g])
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