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Ezel / Tax Rulings / TX
TX 8912L0969G13 Sales and/or Use Tax (State,Local,MTA) 1989-12-11

Were nursing-home natural gas and electricity exempt, and could utilities accept certificates and refund tax for prior qualifying periods?

Short answer: Yes for billing periods beginning on or after January 1, 1988. Nursing-home utilities were exempt from state, county, and transit taxes, while city tax could remain; utilities could accept completed certificates and refund qualifying periods.

Apply this to your situation

This page answers the general question as of 1989. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1989
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

Rule 3.295 treated nursing-home natural gas and electricity as exempt residential use for billing periods beginning on or after January 1, 1988.

The exemption covered state, county, and MTA/CTD sales taxes. City tax remained due in cities that retained or reimposed tax on residential utility use.

Utilities could accept properly completed exemption certificates to exempt customer accounts and could refund tax for the appropriate billing periods to customers who requested refunds.

Common questions

When did the exemption begin? Billing periods beginning on or after January 1, 1988.

Was city tax always exempt? No.

Could the utility refund prior qualifying tax? Yes.

Citations and references

  • 34 Tex. Admin. Code Rule 3.295

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

December 11, 1989

Dear ***:

Thank you for your letter regarding sales tax applicable to
natural gas and electricity for nursing homes.

Natural gas and electricity for nursing homes is exempt as
residential use. This amendment to Rule 3.295 - Natural Gas and
Electricity, allowing the exemption is effective only for billing
periods beginning on or after January 1, 1988. Residential use of
natural gas and electricity is exempt from the state, MTA/CTD, and
county sales taxes. City sales tax is due on natural gas and
electricity in those cities that retained or reimposed the city
tax on residential use.

You may accept properly completed exemption certificates to exempt
a customer's account from sales tax and refund the tax for the
appropriate billing periods to those customers requesting a re-
fund.

If you have any questions or need additional information, you may
call me toll free at 1-800-252-5555, extension 3-4666. You may
write to Tax Correspondence, Comptroller of Public Accounts.

Sincerely,
Jo Ann Dieck
Tax Correspondence

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