What certifications and records did Texas require for post-August 3, 1987 electricity studies supporting a sales-tax exemption or refund?

Plain-English summary

Electricity studies submitted after August 3, 1987 had to meet Rule 3.295. A registered engineer or a person with an engineering degree from an accredited engineering college had to certify the kilowatts, duty factors, and computations.

If the electricity qualified, the customer could issue an exemption certificate and refund request to the utility. The certification could be the registered engineer's original stamp or seal and signature on the certificate, or an attachment bearing both the client's original signature confirming the listed items and hours and the engineer's certification and original signature. The client had to retain copies of the documents and studies for audit.

The letter also warned that electricity used by support equipment—such as lights, refrigerators, freezers, heat lamps, and equipment maintaining a product in a heated or cooled state—was taxable as of August 3, 1987. Electricity used to prepare food for immediate consumption became commercial use and ceased qualifying for exemption on October 1, 1987.

What this means for you

The historical letter addressed proof, not just energy use. A potentially exempt process still required technical certification, original signatures, customer confirmation, and audit records.

Common questions

Who could certify the study? A registered engineer or a person with an engineering degree from an accredited engineering college.

What had to be certified? Kilowatts, duty factors, and computations.

Did the letter approve the submitted studies? It does not state an approval or exemption result.

Did all food-business electricity qualify? No. The letter excluded support equipment and, effective October 1, 1987, electricity used to prepare food for immediate consumption.

Citations and references

• 34 Tex. Admin. Code Rule 3.295 (electricity studies and exemption requirements)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8711L0847F14

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

November 19, 1987

Dear **:

Enclosed are the electricity studies for ** dba ****
that
you recently sent to us for review.

Electricity studies submitted after August 3, 1987, are subject to the
requirements outlined in Ruse 3.295, copy enclosed.

The studies must be certified by a registered engineer or a person with
an
engineering degree from an accredited engineering college. The engineer
must
certify the kilowatts, duty factors and computations.

If the electricity qualifies for exemption, an exemption certificate and
refund request can be issued to the utility company to claim exemption
and
refund. Be advised that electricity for support equipment (lights,
refrigerators, freezers, heat lamps, and any other equipment to maintain
the
product in a heated or cooled state) is taxable as of august 3, 1987.
Effective October 1, 1987, the electricity used in preparation of food
for
immediate consumption is commercial use and no longer qualifies for
exemption.

The engineer's certification to accompany the exemption certificate can
be
the registered engineer's original stamp or seal and signature on the
exemption certificate or an attachment to the certificate bearing your
client's original signature and statement that the all items are listed
in
the study and the hours are correct and also bearing the engineers
certification and original signature.

Copies of the documents an studies must be kept in your clients files for
review in case of an audit.

If you have any questions or need more information, please call me at
1-800-252-5555 toll free from any where 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