Sales Tax Articles
Sales Tax State Activity Update - June 2008
Texas Protects Protective Gear from Tax
Upon the request of a Letter Ruling from a food processor, the Comptroller has provided clarification to its policy surrounding the exemption for protective clothing used in the manufacturing process.
The ruling outlines the available exemption for protective gear such as aprons, gloves, overalls/coveralls, shoe covers, sleeves, and smocks, per Texas Tax Code Section 151.318(a)(9). To claim exemption, companies must obtain an approval from the Comptroller's Sales Tax Policy Division, by demonstrating that the following conditions are met;
- the garments are specifically designed and marketed for, and suitable to, use in food processing operations in a manner that protects against the contamination of food, food-contact surfaces, or food-packaging materials;
- the garments are specifically identified as required protective clothing in the plant's Sanitation Standard Operating Procedures (SSOP) or federal, state, or local laws or rules;
- the clothing otherwise meets the exemption requirements in tax Code section 151.318(a)(9);
- the food processor has obtained confirmation or approval from the Texas Comptroller's office that the clothing items purchased meet these criteria.
The above guideline only applies to the purchase of the garment and does not apply to leases or rentals of clothing items by food processors. Furthermore, this policy does not apply retroactively because the provisions require food processors to obtain prior approval from the Comptroller's Tax Division. The burden of proof is placed upon the taxpayer to prove its exemption.
The full letter ruling can be accessed on the Texas STAR Website.
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