Texas Court of Appeals Holds Oilfield Chemical Manufacturer's Porta-Feed Containers Qualify for Manufacturing Exemption from Sales Tax

ChampionX, a manufacturer of chemicals for oil and gas exploration, production, and refining, successfully claimed sales and use tax refunds on returnable porta-feed containers (ranging from 30 to 700 gallons) and associated cleaning and transportation services under Tax Code Section 151.318's manufacturing exemption. The Comptroller 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 rather than being used or consumed during actual manufacturing.