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Ezel / Tax Rulings / TX
TX 8409L0590E11 Sales and/or Use Tax (State,Local,MTA) 1984-09-27

Was electricity used to extract oil from the ground exempt from Texas sales tax, and what certificate was required?

Short answer: Yes. The Comptroller said electricity used to extract oil from the ground was specifically exempt, and the purchaser had to give the utility company an exemption certificate.

Apply this to your situation

This page answers the general question as of 1984. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1984
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Texas Comptroller said electricity used to extract oil from the ground was specifically exempt from sales tax.

The purchaser had to give the utility company an exemption certificate to claim the exemption.

The body header prints “September 27, 1934,” while STAR metadata dates the document September 27, 1984. This page uses the official metadata date in frontmatter and preserves the conflicting printed date in the original text.

What this means for you

Oil producers

The historical exemption required an exemption certificate delivered to the utility.

Utilities and accountants

Retain the certificate and verify current electricity-use and oil-production exemption requirements.

Common questions

Q: Was the electricity exempt?
A: Yes, for the oil-extraction use described.

Q: What documentation was required?
A: An exemption certificate issued to the utility company.

Q: Why does the page use a 1984 issued date?
A: STAR metadata says 1984; the body itself prints 1934.

Citations and references

  • The letter refers to an enclosed rule but does not identify it.

Source

Original ruling text

September 27, 1934

Dear **:

Thank you for your recent letter regarding electricity used to extract
oil from the ground.

Electricity used for this purpose is specifically exempt from Sales
Tax. You must issue an exemption certificate to the utility company
to claim the exemption.

I am enclosing an exemption certificate for your use and a copy of the
rule for your file.

This opinion is based upon the facts you presented. If there are
additional or different facts, this opinion may change.

Please feel free to contact me if you have additional questions. You
may write me, call toll free 1-300-252-5555 from anywhere in Texas or
phone 512/475-2931.

Sincerely,

Al Van Allen
Tax Administration Division

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