Ezel / Tax Rulings / TX
TX 9103L1089B11 Sales and/or Use Tax (State,Local,MTA) 1991-03-20

Could a utility credit an electricity sales-tax refund to the customer's account instead of paying the refund directly?

Short answer: Yes, but only with the customer's written consent to apply the sales-tax refund as an account credit rather than issue a refund.

Apply this to your situation

This page answers the general question as of 1991. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1991
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

Texas said a utility company needed the customer's written consent before applying an electricity sales-tax refund as a credit to the customer's account instead of refunding the tax directly.

What this means for you

The utility could not unilaterally substitute an account credit for the refund under the procedure described in this letter. Written customer consent was required.

Common questions

Could the utility use an account credit? Yes.

What documentation was required? The customer's written consent.

What refund did the letter address? A sales-tax refund on electricity.

Citations and references

  • 34 Tex. Admin. Code Rule 3.325(b)(2) — refunds, interest, and payments under protest.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

JOHN SHARP
Comptroller March 20, 1991

Dear **:

This is to follow up our telephone conversation regarding a sales
tax refund on electricity applied as a credit to the customer's
account rather than being refunded.

The utility company must obtain the customer's written consent to
apply the sales tax refund to the customer's account rather than
refunding the tax. Please see Section (b)(2) of Rule 3.325,
Refunds, Interest and Payments Under Protest.

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 Administration
Division.

Sincerely,
Jo Ann Dieck
Tax Administration Division

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