Is electricity used to run a mobile home community's shared sewer pump an exempt residential use, and does it matter that this letter corrects an earlier answer from the same Comptroller office?

Plain-English summary

This short letter is explicitly a correction to an earlier Comptroller letter (dated May 16, 2000, document number 200005305L) addressing the same electricity account for a mobile home community.

The specific electricity account in question powers a sewer pump serving the mobile home community as a whole. The Comptroller confirmed this is an exempt residential use of electricity: Tax Code § 151.317(a)(1) exempts residential use of electricity and natural gas, and § 151.317(c) defines "residential use" broadly to include use in a family dwelling, or in a multifamily apartment or housing complex or building (or part of a building) occupied as a home or residence, when the use is by the owner of that dwelling/complex/building. A mobile home community's shared sewer pump — serving the residential complex as a whole rather than a commercial use — fits that definition, so the electricity for this account is exempt, and the community may issue an exemption certificate to its utility company.

What this means for you

Mobile home community and apartment complex owners

Shared-infrastructure utility accounts (like a sewer pump serving the whole community) can qualify for the residential-use exemption, not just individual unit meters — the exemption follows the residential nature and ownership of the use, not whether the specific equipment is inside an individual dwelling.

Property managers correcting utility exemption determinations

This letter is a reminder that Comptroller letter rulings themselves sometimes need correction — if you received an earlier determination that seems off, it's worth asking the Tax Policy Division to revisit it, as happened here.

Accountants and tax professionals

Note the two-part residential-use test from § 151.317(c): the property type (dwelling/apartment/housing complex or building, or part of one) AND that the use is by the owner of that property — both elements matter when evaluating a utility exemption claim for shared or common-area infrastructure.

Common questions

Q: Does electricity for a mobile home community's shared sewer pump qualify for the residential use exemption?
A: Yes, per this letter — it fits the § 151.317(c) definition of residential use because it serves the residential complex and is used by the property owner.

Q: Why does this letter say it's a "correction"?
A: It explicitly supersedes an earlier May 16, 2000 letter (200005305L) on the same electricity account, changing the outcome to exempt.

Q: Can any mobile home community rely on this exact exemption for its own sewer pump account?
A: Not directly. This is a Texas STAR letter ruling binding on the Comptroller only for the taxpayer it addresses (34 Tex. Admin. Code Rules 3.1, 3.10); confirm your own account and ownership facts with a tax professional.

Citations and references

Statutes:

• Tex. Tax Code § 151.317(a)(1) (residential use exemption)
• Tex. Tax Code § 151.317(c) (definition of residential use)

Related prior letter (corrected by this one):

• STAR accession number 200005305L (May 16, 2000)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200010752L

Original ruling text

October 2, 2000

Dear **:

This is a correction to my May 16, 2000 letter (200005305L) concerning the taxability of
certain electricity purchased and used by a mobile home community.

The electricity used for account number ** (ELECTRIC COMPANY) is
for operating a sewer pump for the community. Texas Tax Code Section
151.317(a)(1) exempts residential use of electricity and natural gas used.
Texas Tax Code Section 151.317(c) defines residential use as use 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.

This is an exempt residential use of the electricity. You may issue an
exemption certificate to the utility company.

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

You may call me toll free at 1-800-531-5441, extension 3-4683, if you have any
questions or need more information. My email address is
[email protected]. You may write to Tax Policy Division, P.O.
Box 13528, Austin, Texas 78711-3825.

Sincerely,

Eddie C. Washington
Tax Policy Division