9707572L

July 10, 1997

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Dear *************:

Thank you for your letter of June 25, 1997, concerning the expiration of the scrap tire recycling program. Hayden asked me to respond to your letter.

The association and its members are in the process of forming policy and procedures that will keep the program alive and ethical. You anticipate the generators will continue to collect a fee to defray the cost of transportation to end users. You need to have clarification on the taxability of this fee effective January 1, 1998. You propose to continue the same amount of fee, but use the terminology of "disposal fee." You want to know whether the "disposal fee" will be taxable.

Response: The disposal fee will be taxable as part of the sales price of the tire. 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.

This opinion is based on the facts presented. If there are additional or different facts, the opinion may change.

You may call me at 463-4683. You may also write to Tax Policy Division, Comptroller of Public Accounts.

Sincerely,

Eddie C. Washington
Tax Policy Division

cc: Hayden Denham

ACCESSION NUMBER: 9707572L
SUPERSEDED: N
DOCUMENT TYPE: L
DATE: 07/10/97
TAX TYPE: SALES