TEXAS SALES AND USE TAX EXEMPTION ON NATURAL GAS AND ELECTRICITY

Category: State

Texas companies are exempt from paying state sales and use tax on electricity and natural gas used in manufacturing, processing, or fabricating tangible personal property. The company must complete a “predominant use study” that shows that at least 50% of the electricity or natural gas consumed by the business directly causes a physical change to a product.  Processing also includes the lighting, cooling and heating in the manufacturing area during the actual manufacturing or processing. Utility use in agriculture, including dairy or poultry operations and pumping for farm or ranch irrigation is also exempt.


Contacts

Russell Gallhan
Texas Comptroller of Public Accounts
111 E. 17th St.
Austin, TX 78774-0100 78774-0100
Phone: 512-463-6073

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