Texas Exempts Colored Cement From Sales Tax

Tuesday, February 17th, 2015

A cement walkway in a park.

The Texas Comptroller of Public Accounts ("Comptroller") issued guidance on the taxability of colored cement.

A taxpayer asked whether adding pigment to a cement mix would change the taxability of the cement.

Texas imposes the cement production tax on a person who (1) manufactures, produces, or imports cement into the state and (2) distributes, sells, or uses cement in the state. Cement that is subject to the cement production tax is exempt from sales tax. The word "cement" is not defined in the law. When a term is not defined in the law, the dictionary definition applies. Webster's New Collegiate Dictionary defines "cement" as "a powder of alumina, silica, lime, iron oxide, and magnesia burned together in a kiln and finely pulverized and used as an ingredient of mortar and concrete."

The Comptroller concluded that colored cement was subject to the cement production tax. The definition of cement did not exclude cement with pigment added. Therefore, the cement was still subject to the cement production tax and exempt from sales tax.


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