Ezel / Tax Rulings / TX
TX 8606L0742G10 Sales and/or Use Tax (State,Local,MTA) 1986-06-27

Was a minimum utility bill taxable when an apartment was vacant and the bill showed zero consumption?

Short answer: Yes. A zero-consumption minimum bill was a taxable sale whether charged to the individual utility customer or to the apartment owner or managing company.

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This page answers the general question as of 1986. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1986
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 utility collected local sales tax on residential utility use but had not collected it on minimum bills sent to an apartment owner or managing company when a unit was vacant.

The Comptroller said a minimum bill reflecting zero consumption was still a taxable sale. The result was the same whether the bill went to an individual or to the owner or managing company.

Common questions

Was a zero-use minimum bill taxable? Yes.

Did it matter that the apartment was vacant? No.

Did it matter whether the customer or property manager received the bill? No.

Source

Original ruling text

June 27, 1986

Dear ***:

Thank you for your letter of June 18, 1986, concerning the local sales
tax on minimum charges for utilities.

You said that local tax is collected on residential use of utilities
within the City of ***, but is not collected on minimum utility
billings made to the owner/managing company when an apartment unit is vacant.

A minimum bill reflecting zero consumption is a taxable sale upon which
tax is due whether billed to the individual or to the owner/managing company.

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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