Texas Appellate Court Affirms Manufacturing Exemption for Oilfield Chemical Containers in Sales Tax Refund Dispute

ChampionX, a manufacturer of chemicals for oil and gas exploration, production, refining, and chemical processing, successfully claimed sales and use tax exemptions under Texas Tax Code Section 151.318 for returnable porta-feed containers ranging from 30 to 700 gallons used to transport hazardous chemicals to customers. The State argued the containers were taxable under the specific Container Exemption in Section 151.322 and were excluded from the Manufacturing Exemption under Section 151.318(c) because they were used to distribute, transport, maintain, and store chemicals.