Ezel / Tax Rulings / TX
TX 8710L0846C12 Sales and/or Use Tax (State,Local,MTA) 1987-10-30

Was job-site electricity exempt when used directly to power tools and welding equipment on wastewater-treatment projects for exempt customers?

Short answer: Yes. Electricity used directly in construction for the listed exempt customers was exempt when the contractor gave the utility a certificate identifying the entity and project.

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 electricity used on wastewater-treatment construction projects for six redacted exempt customers. It says the opinion may change if the facts differ. Its exemption depended on direct construction use and a certificate identifying the exempt entity and project; verify current law, customer status, utility documentation, and actual use. STAR documents may no longer represent current policy even when not marked superseded.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 at the job site was exempt when it directly powered tools and equipment needed to construct wastewater-treatment plants for the listed exempt customers. The letter specifically mentioned power tools used to shape or fit materials, electric welding machines used on steel beams, and other tools and equipment used directly in construction.

To claim the exemption, the contractor had to give the utility supplier a completed exemption certificate identifying the exempt entity and the project for which the electricity was purchased.

What this means for you

The historical exemption followed the electricity's direct use on a qualifying exempt-customer project and required project-specific documentation.

Common questions

Was all electricity at a construction site exempt? The letter addressed electricity used directly to operate construction tools and equipment on the listed exempt projects.

Were welding-machine charges included? Electricity powering welding machines used on steel beams was included.

What documentation was required? A completed exemption certificate identifying the exempt entity and project.

Citations and references

  • No statute or rule number is cited in the ruling text.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

October 30, 1987

Dear *****:

Thank you for letter regarding sales tax exemption on electricity used on
various construction projects. Contracts to construct waste water
treatment
plants for the following are exempt jobs:

Electricity used at the job site to operate power tools necessary to
shape or
fit materials into the finished project; furnish power for electric
welding
machines used in welding steel beams; and furnish power for other tools
and
equipment used directly in the construction of a project of an exempt
customer is exempt from the sales tax.

A completed exemption certificate identifying the exempt entity and
project
for which the electricity is being purchased must be issued to the
utility
supplier to claim tax exemption.

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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