Ezel / Tax Rulings / TX
TX 8903L0926D13 Sales and/or Use Tax (State,Local,MTA) 1989-03-14

Was electricity used in separately metered apartment-style patient housing at a drug-rehabilitation or psychiatric center exempt residential use?

Short answer: No. Texas treated the electricity as taxable commercial use because the 60-day patient housing was not occupied as a home or residence.

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This page answers the general question as of 1989. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1989
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

A drug-rehabilitation or psychiatric center housed patients for an average of 60 days in apartment-style units and furnished utilities, food, and education. The units were separately metered from the facility's other uses.

The Comptroller nevertheless treated the electricity as taxable commercial use. The patient apartments were not “residential use” because they were not occupied as a home or residence, even though they resembled apartments and patients stayed for about two months.

Common questions

Did separate metering make the electricity residential? No.

Did the average 60-day stay make the patient units homes or residences? No, not under the facts presented.

How did the Comptroller classify the electricity? As taxable commercial use.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

BOB BULLOCK
Comptroller March 14, 1989

Dear ****:

Thank you for your letter regarding sales tax exemption on elec-
tricity for ****.

You described the facility as a drug rehabilitation/psychiatric
center whose patients are housed an average of 60 days. The
patients are given apartment type housing where utilities, food,
and education are furnished. The apartment units are separately
metered from other uses.

The electricity used at the **** is commercial use
and taxable. Although the patients stay an average of 60 days,
the electricity for the apartments is not residential use.
"Residential use" of electricity means use in a family dwelling
or in a multifamily apartment or housing complex or building or
a part of a building occupied as a home or residence.

This opinion is based on the facts presented. If there are addi-
tional or different facts, the opinion may change.

If you have any questions or need more information, please call me
at 463-4666. You may write to Tax Correspondence, Comptroller of
Public Accounts.

Sincerely,
Jo Ann Dieck
Tax Correspondence

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