Ezel / Tax Rulings / TX
TX 8503L0633E04 Sales and/or Use Tax (State,Local,MTA) 1985-03-27

When was condominium electricity exempt residential use versus taxable commercial use?

Short answer: Owner use and tenant stays of 30 days or more were exempt residential use; stays under 30 days were taxable commercial use. The association could claim exemption if it substantiated over 50% qualifying consumption, but shared facilities used by short-term tenants remained taxable.

Apply this to your situation

This page answers the general question as of 1985. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1985
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

Electricity consumed by condominium owners and by tenants staying at least 30 days was exempt residential use. Electricity used by tenants staying less than 30 days was taxable commercial use.

If the condominium association could substantiate that owners and tenants staying 30 days or more consumed more than 50% of the electricity, the association could claim an exemption on the electricity.

The Comptroller corrected an earlier telephone answer about common areas. Electricity used in laundry facilities, swimming pools, offices, hallways, and outdoor lighting was taxable commercial use because short-term tenants also used those facilities.

Common questions

What stay length counted as residential use? At least 30 days. What threshold allowed the association to claim exemption? More than 50% of consumption had to be substantiated as owner or qualifying long-term-tenant use. Were common-area utilities exempt? No under these mixed-use facts.

Citations and references

The reproduced letter cites no numbered statute or rule.

Source

Original ruling text

March 27, 1985

Dear ***:

Thank you for your recent letter requesting a ruling on the taxability of
utilities used in a condominium complex.

The electricity used by condominium owners and by tenants staying 30 days
or more is exempt as residential use. Electricity used by tenants staying
less than 30 days is taxable as commercial use.

If the condominium association can substantiate that more than 50 percent
of the electricity is consumed by owners and tenants staying 30 days or
more, the association may claim an exemption on the electricity.

I answered your question about electricity used in the common areas
incorrectly in our telephone conversation. Electricity used in laundry
facilities, swimming pools, offices, hallways and outdoor lighting is
taxable as commercial use since these facilities are also used by tenants
staying less than 30 days.

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

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the
Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division

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