Ezel / Tax Rulings / TX
TX 8908L0948F11 Sales and/or Use Tax (State,Local,MTA) 1989-08-18

Was electricity used by country-club pumps to extract well water and move it to fairways and greens exempt?

Short answer: Yes. The Comptroller said electricity used both to extract water from the earth and to transport the water after extraction was exempt from sales tax.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

Country clubs used electric pumps to draw water from wells and either store it or pump it directly to fairways and greens.

The Comptroller said electricity used to extract the water from the earth and electricity used to transport it after extraction were both exempt from sales tax.

Common questions

Was electricity for the well pump exempt? Yes.

Was electricity for later water transport also exempt? Yes.

Did the body decide treatment for rivers, lakes, or ponds? No. Despite the broader STAR subject label, the operative facts concerned water extracted from wells.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

August 18, 1989

Dear ****:

Thank you for your recent letter which is restated in part with
response below:

Facts: Country clubs use electric pumps to extract water from
wells. The water will be either stored or directly pumped by the
same pump or additional pumps to the fairways and greens. Rule
3.295 (a)(5)(A) states that exploration for or production or
transportation of material extracted from the earth is non
commercial use (and is therefore exempt). Please verify that
electricity used to produce or transport water extracted from the
earth is exempt from sales tax.

Response: The electricity used to extract water from the earth
and to transport it after it has been extracted is exempt from tax.

Feel free to call or write me if you have questions. You can
reach me by calling toll free 800-531-5441 or FAX (512) 475-0900.

Sincerely,
Al Van Allen
Taxability Section
Legal Services Division

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