Ezel / Tax Rulings / TX
TX 8710L0844B08 Sales and/or Use Tax (State,Local,MTA) 1987-10-28

Could a restaurant obtain a refund of sales tax paid on electricity bought before October 1, 1987, when food-preparation electricity became taxable?

Short answer: Yes, if the prior electricity use was predominantly exempt based on the preceding 12 months and Rule 3.295's requirements were met.

Apply this to your situation

This page answers the general question as of 1987. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1987
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 a taxpayer-specific October 1987 Texas Comptroller letter about restaurant electricity and a refund for earlier purchases. It says the opinion may change if the facts differ. Its October 1, 1987 effective date and 12-month predominant-use test are historical; verify current utility-tax and refund law. STAR documents may no longer represent current policy even when not marked superseded. Identities are redacted. This summary is informational only and is not legal or tax advice.
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 used to prepare or store food for immediate consumption became taxable on October 1, 1987.

The Comptroller said a food-preparation business could obtain a refund of sales tax paid on electricity purchased before that date if the electricity was predominantly exempt based on the 12 months of use before October 1 and the business met Rule 3.295's exemption requirements.

What this means for you

The historical refund depended on the restaurant's actual electricity use during the preceding 12 months and compliance with Rule 3.295. The letter did not grant an automatic refund to every restaurant.

Common questions

When did food-preparation electricity become taxable under the letter? October 1, 1987.

Could tax paid on earlier electricity be refunded? Yes, if the electricity was predominantly exempt based on the preceding 12 months and Rule 3.295 was satisfied.

Did the letter specify a shorter measurement period? No. It expressly used 12 months before October 1.

Citations and references

  • Texas Comptroller Rule 3.295, exemption requirements referenced by the letter

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

October 28, 1987

Dear ****:

This is to follow up our telephone conversation regarding sales tax
exemption and refund on electricity used by restaurants.

Effective October 1, 1987, electricity used in the preparation or storage
of food for immediate consumption became taxable.

Persons in the business of preparing food for immediate consumption would
be entitled to a refund of sales tax on electricity purchased prior to October
1, 1987, if the electricity is predominately exempt based on twelve months use
prior to October 1 and the requirements for exemption as outlined in Rule 3.295
are met.

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 me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Policy Division.

Sincerely,
(Mrs.) Jo Ann Dieck
Tax Policy Division

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