Which electric-utility billing periods first used the temporary 1987 Texas sales-tax increase and the later rate decrease?

Plain-English summary

An electric utility asked how billing periods would cross the temporary state sales-tax rate increase effective January 1, 1987 and its scheduled expiration on September 1, 1987.

The Comptroller confirmed two different transition rules. The increased rate first applied to a billing period that began on or after January 1. When the temporary increase expired, the decreased rate first applied to a billing period that ended on or after September 1.

Common questions

When did the higher rate first apply? To a billing period beginning on or after January 1, 1987.

When did the lower rate first apply? To a billing period ending on or after September 1, 1987.

Did the letter discuss city or county taxes? No. Despite the broader STAR subject caption, the body only answered how the temporary state rate increase and decrease applied to electric billing periods.

Citations and references

• The letter cited no numbered statute or Comptroller rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8610L0773G13

Original ruling text

October 20, 1986

Dear ***:

Thank you for your recent letter which is restated with response below.

The state sales tax increase recently passed by the Texas
Legislature to be effective for the period January 1, 1987
through August 31, 1987 will of course impact certain of our
electric customers. On other occasions of sales tax rate
increases, it has been the state's policy that the increased
sales tax should be initially applied to a billing period
which begins on or after the effective date of such increase.
Will the same policy apply on this occasions?

Response: Yes.

The subject tax rate increase is temporary and is scheduled to
expire on September 1, 1987. Therefore, will the state's
policy be to decrease the tax rate initially on a billing
period which ends or after the effective date of the tax
rate decrease?

Response: Yes.

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. The regular number is
512/463-4600. You may write us at the Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division