Tex.
Tax Code Section 151.317
Gas and Electricity
(a)
Subject to Sections 151.1551 (Registration Number Required for Timber and Certain Agricultural Items), 151.359 (Property Used in Certain Data Centers; Temporary Exemption), and 151.3595 (Property Used in Certain Large Data Center Projects; Temporary Exemption) and Subsection (d) of this section, gas and electricity are exempted from the taxes imposed by this chapter when sold for:(1)
residential use;(2)
use in powering equipment exempt under Section 151.318 (Property Used in Manufacturing) or 151.3185 (Property Used in the Production of Motion Picture, Video, or Audio Recordings and Broadcasts) by a person processing tangible personal property for sale as tangible personal property, other than preparation or storage of prepared food described by Section 151.314 (Food and Food Products)(c-2);(3)
use in lighting, cooling, and heating in the manufacturing area during the actual manufacturing or processing of tangible personal property for sale as tangible personal property, other than preparation or storage of prepared food described by Section 151.314 (Food and Food Products)(c-2);(4)
use directly in exploring for, producing, or transporting, a material extracted from the earth;(5)
use in agriculture, including dairy or poultry operations and pumping for farm or ranch irrigation;(6)
use directly in electrical processes, such as electroplating, electrolysis, and cathodic protection;(7)
use directly in the off-wing processing, overhaul, or repair of a jet turbine engine or its parts for a certificated or licensed carrier of persons or property;(8)
use directly in providing, under contracts with or on behalf of the United States government or foreign governments, defense or national security-related electronics, classified intelligence data processing and handling systems, or defense-related platform modifications or upgrades;(9)
use directly by a data center or large data center project that is certified by the comptroller as a qualifying data center under Section 151.359 (Property Used in Certain Data Centers; Temporary Exemption) or a qualifying large data center project under Section 151.3595 (Property Used in Certain Large Data Center Projects; Temporary Exemption) in the processing, storage, and distribution of data;(10)
a direct or indirect use, consumption, or loss of electricity by an electric utility engaged in the purchase of electricity for resale; or(11)
use in timber operations, including pumping for irrigation of timberland.(b)
The sale, production, distribution, lease, or rental of, and the use, storage, or other consumption in this state of, gas and electricity sold for the uses listed in Subsection (a), are exempted from the taxes imposed by a municipality under Chapter 321 (Municipal Sales and Use Tax Act) except as provided by Sections 151.359 (Property Used in Certain Data Centers; Temporary Exemption)(j) and 321.105 (Residential Use of Gas and Electricity).(c)
In this section, “residential use” means use:(1)
in a family dwelling or in a multifamily apartment or housing complex or building or in a part of a building occupied as a home or residence when the use is by the owner of the dwelling, apartment, complex, or building or part of the building occupied; or(2)
in a dwelling, apartment, house, or building or part of a building occupied as a home or residence when the use is by a tenant who occupies the dwelling, apartment, house, or building or part of a building under a contract for an express initial term for longer than 29 consecutive days.(d)
To qualify for the exemptions in Subsections (a)(2)-(9), the gas or electricity must be sold to the person using the gas or electricity in the exempt manner. For purposes of this subsection, the use of gas or electricity in an exempt manner by an independent contractor engaged by the purchaser of the gas or electricity to perform one or more of the exempt activities identified in Subsections (a)(2)-(9) is considered use by the purchaser of the gas or electricity.(e)
Natural gas or electricity used during a regular monthly billing period for both exempt and taxable purposes under a single meter is totally exempt or taxable based on the predominant use of the natural gas or electricity measured by that meter. The comptroller may prescribe by rule the procedures by which a purchaser must establish the predominant use of the natural gas or electricity.
Source:
Section 151.317 — Gas and Electricity, https://statutes.capitol.texas.gov/Docs/TX/htm/TX.151.htm#151.317
(accessed Apr. 13, 2024).