Tax Code
Title 2. State Taxation
Subtitle E. Sales, Excise and Use Taxes
Chapter 151. Limited Sales, Excise and Use Tax
Sec. 151.317. Gas and Electricity
Sec. 151.317. GAS AND ELECTRICITY. (a) Subject to Sections 151.1551, 151.359, and 151.3595 and Subsection (d) of this section, gas and electricity are exempted from the taxes imposed by this chapter when sold for:
(1) residential use;
(2) use in powering equipment exempt under Section 151.318 or 151.3185 by a person processing tangible personal property for sale as tangible personal property, other than preparation or storage of prepared food described by Section 151.314(c-2);
(3) use in lighting, cooling, and heating in the manufacturing area during the actual manufacturing or processing of tangible personal property for sale as tangible personal property, other than preparation or storage of prepared food described by Section 151.314(c-2);
(4) use directly in exploring for, producing, or transporting, a material extracted from the earth;
(5) use in agriculture, including dairy or poultry operations and pumping for farm or ranch irrigation;
(6) use directly in electrical processes, such as electroplating, electrolysis, and cathodic protection;
(7) use directly in the off-wing processing, overhaul, or repair of a jet turbine engine or its parts for a certificated or licensed carrier of persons or property;
(8) use directly in providing, under contracts with or on behalf of the United States government or foreign governments, defense or national security-related electronics, classified intelligence data processing and handling systems, or defense-related platform modifications or upgrades;
(9) use directly by a data center or large data center project that is certified by the comptroller as a qualifying data center under Section 151.359 or a qualifying large data center project under Section 151.3595 in the processing, storage, and distribution of data;
(10) a direct or indirect use, consumption, or loss of electricity by an electric utility engaged in the purchase of electricity for resale; or
(11) use in timber operations, including pumping for irrigation of timberland.
(b) The sale, production, distribution, lease, or rental of, and the use, storage, or other consumption in this state of, gas and electricity sold for the uses listed in Subsection (a), are exempted from the taxes imposed by a municipality under Chapter 321 except as provided by Sections 151.359(j) and 321.105.
(c) In this section, “residential use” means use:
(1) in a family dwelling or in a multifamily apartment or housing complex or building or in a part of a building occupied as a home or residence when the use is by the owner of the dwelling, apartment, complex, or building or part of the building occupied; or
(2) in a dwelling, apartment, house, or building or part of a building occupied as a home or residence when the use is by a tenant who occupies the dwelling, apartment, house, or building or part of a building under a contract for an express initial term for longer than 29 consecutive days.
(d) To qualify for the exemptions in Subsections (a)(2)-(9), the gas or electricity must be sold to the person using the gas or electricity in the exempt manner. For purposes of this subsection, the use of gas or electricity in an exempt manner by an independent contractor engaged by the purchaser of the gas or electricity to perform one or more of the exempt activities identified in Subsections (a)(2)-(9) is considered use by the purchaser of the gas or electricity.
(e) Natural gas or electricity used during a regular monthly billing period for both exempt and taxable purposes under a single meter is totally exempt or taxable based on the predominant use of the natural gas or electricity measured by that meter. The comptroller may prescribe by rule the procedures by which a purchaser must establish the predominant use of the natural gas or electricity.
Acts 1981, 67th Leg., p. 1563, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1987, 70th Leg., ch. 411, Sec. 1, eff. Oct. 1, 1987; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 25; Acts 1995, 74th Leg., ch. 1000, Sec. 16, eff. Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1040, Sec. 21, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 631, Sec. 15, eff. Oct. 1, 2001; Acts 1999, 76th Leg., ch. 1467, Sec. 2.18, eff. Oct. 1, 1999; Acts 2001, 77th Leg., ch. 1263, Sec. 21, eff. Oct. 1, 2001; Acts 2003, 78th Leg., ch. 1310, Sec. 104, 105, eff. Oct. 1, 2003.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 225 (H.B. 268), Sec. 6, eff. September 1, 2011.
Acts 2013, 83rd Leg., R.S., Ch. 1274 (H.B. 1223), Sec. 2, eff. September 1, 2013.
Acts 2015, 84th Leg., R.S., Ch. 412 (H.B. 2712), Sec. 2, eff. June 10, 2015.
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