If the company installs the liner in a new pipeline after the pipe has been attached to the realty, then the company is improving real property. The labor to attach the liner is new construction labor and not taxable. Tax is due on separately stated charges for the liner. If the liner is installed in an existing pipeline, the total charge will be taxable as remodeling non-residential real property. It's a Dirty Job A commercial waste water treatment company asked about its sales tax responsibilities.
Water is transported and stored at the company's facilities.
Oil and other contaminants are removed using an ultra-filter treatment process. The treated waste water is discharged into a municipal waste facility, and any recovered oil is sold to an oil recycling center. This process is the restoration of water. Because water is exempt under Tax Code 151.315, the restoration is also exempt. The charge to pick up the water is taxable unless the discharge is subject to regulation by permit issued pursuant to the Texas Water Code, Chapter 26.