Which Texas sales taxes were refundable on natural gas and electricity billed to a nursing home after nursing homes became residential users?

Plain-English summary

Nursing homes were included in residential use for the natural-gas and electricity sales-tax exemption beginning with billing periods on or after January 1, 1988.

Residential utilities were exempt from state, county, and MTA/CTD sales taxes. City tax was also exempt unless the city had voted to retain it or had repealed and then reimposed it on residential use.

The redacted city in this letter retained its city tax, so only state and county tax could be refunded. The billing period that began December 18, 1987 did not qualify because it began before the effective date.

Common questions

When did the nursing-home exemption begin? For billing periods beginning on or after January 1, 1988.

Was city tax always exempt? No. It depended on the city's action.

Did the December 18, 1987 billing period qualify? No.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9003L0994C07

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller March 19, 1990

Dear ***:

The information you sent regarding a sales tax refund request you
received from ****, Texas, has been reviewed.

Nursing homes are now included in the definition of residential
use for purposes of exemption from sales tax on natural gas and
electricity. The exemption from sales tax is applicable only for
billing periods beginning on or after January 1, 1988.

Natural gas and electricity for residential use are exempt from
the state, county, and MTA/CTD sales taxes. They are also exempt
from city sales tax unless the city voted to retain the tax or the
city repealed the tax and reimposed it on residential use.

The city of ** retained the city tax on residential use.
Therefore, only the state and county taxes may be refunded to
customers within the city of **.

Based on the reason for exemption, state and county sales taxes
may be refunded to your customer. However, the tax for the
billing period beginning December 18, 1987, cannot be refunded.

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 additional information, you may
call me toll free at 1-800-252-5555, extension 3-4666, or the
regular number 512/463-4666. You may write to Tax Correspondence,
Comptroller of Public Accounts.

Sincerely,
Jo Ann Dieck
Tax Correspondence