Ezel / Tax Rulings / TX
TX 9105L1111G08 Sales and/or Use Tax (State,Local,MTA) 1991-05-24

Did the Texas residential-use exemption cover electricity and natural gas for a mental hospital where patients stayed 30 to 90 days?

Short answer: No. Rule 3.295's residential-use exemption did not apply to health-care facilities, and the patients' 30-to-90-day stays did not make the hospital a residence.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 mental hospital asked about Texas tax on electricity and natural gas used at a facility where patients stayed for 30 to 90 days, depending on their programs.

The Comptroller said the "residential use" exemption in Rule 3.295(a)(8) did not apply to health-care facilities. Even though patients could be confined for 30 days or more, the hospital was not a residence.

The letter contrasted the hospital with nursing homes, where people generally reside permanently and do not require extensive health-care services.

What this means for you

Lengthy patient stays did not turn the mental hospital into residential property for the utility exemption described in this letter. Its status as a health-care facility controlled.

Common questions

Which utilities were at issue? Electricity and natural gas.

How long did patients stay? From 30 to 90 days, depending on the program.

Did those stays qualify as residential use? No.

Why did the letter mention nursing homes? To contrast permanent residence with the hospital's health-care setting.

Citations and references

  • 34 Tex. Admin. Code Rule 3.295(a)(8) — residential use of natural gas and electricity

Source

Original ruling text

May 24, 1991

Dear ****:

Thank you for your letter regarding taxability of electricity and
natural gas for a mental hospital where the patients stay in
residence for 30 to 90 days depending upon the program the
patients are in.

The exemption for "residential use" as defined in section (a) (8)
of Rule 3.295, Natural Gas and Electricity, does not apply to
health care facilities. While patients may be confined for thirty
or more days, these facilities are not residences. Patients in
nursing homes generally do not require extensive health care
services, but reside there permanently.

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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