Ezel / Tax Rulings / TX
TX 9105L1110F11 Sales and/or Use Tax (State,Local,MTA) 1991-05-20

Could sales tax be refunded on natural gas used by an apartment-complex boiler to provide residential hot water?

Short answer: Yes. State, city, and MTA tax paid within the limitations period could be refunded based on the stated residential-only use.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

A closed natural-gas account had run from 1974 through the end of November 1989. The gas operated a boiler that supplied hot water only for residential use, apparently at an apartment complex.

Based on those facts, the Comptroller said state, city, and MTA sales tax could be refunded for taxable billing periods within the statute of limitations.

The letter also recorded that Richardson repealed its city tax on residential use effective October 1, 1978, and reimposed it effective January 1, 1991.

What this means for you

The stated residential-only use supported a refund, but recovery was limited to billing periods still open under the applicable limitations period.

Common questions

What did the natural gas power? A boiler providing residential hot water only.

Which taxes could be refunded? State, city, and MTA sales tax paid on qualifying billing periods.

Was every payment since 1974 refundable? No. The letter limited refunds to periods within the statute of limitations.

When did the account close? At the end of November 1989.

Citations and references

  • The letter did not identify a numbered statute, regulation, or case.
  • Richardson city-tax dates stated in the letter: repeal effective October 1, 1978; reimposition effective January 1, 1991

Source

Original ruling text

May 20, 1991

Dear ****:

Thank you for your letter regarding a sales tax exemption and refund on
natural gas on a closed account.

The account was in the name of * and *, the service
address was *, and the account number was ***. The service
began in 1974 and ended the end of November 1989.

You stated that the natural gas was for operating a gas boiler system
that provided hot water for residential use only. It appears that the natural
gas was purchased for an apartment complex.

Based on the information presented, the state, city, and MTA sales tax
can be refunded for the billing periods within the statute of limitations on
which you paid the tax. The City of Richardson repealed the city tax on
residential use effective October 1, 1978, and reimposed it effective January
1, 1991.

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
toll free 1-800-252-5555 or the regular number 512/463-4600. My extension is
3-4666. You may write to Tax Administration Division.

Sincerely,

Jo Ann Dieck
Tax Administration Division

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