State of Texas

Texas Utility Sales Tax Exemption

Texas allows businesses to claim exemption on the portion of their utility used in the processing of tangible personal property for sale. 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.

Texas Sales and Use Tax – Section 151.314

Texas Sales Tax Exemption Certificate

The Form 01-339 Exemption Certificate is the document that must be filed in Texas in order for a business to claim the Utility Sales Tax Exemption.

Energy Study Requirement

In Texas, a detailed energy study must be performed to identify the exact percentage of utility that is exempt from sales tax. This includes calculating the annual consumption for each device that is consuming the utility and then distinguishing between production devices and non-production devices. This study must be certified by a qualified engineer.

Our Process
01. Discovery

SmartSave investigates client’s current utility situation, and quickly identifies if the company is eligible to save on its utility sales tax through the exemption.

02. Energy Study

A SmartSave energy specialist performs an in-depth study at the business location to determine the exact proportion of energy use that is exempt from taxation.

03. Request

All necessary information is compiled into a report and submitted to the required utility companies and state agencies. SmartSave works hand-in-hand with these entities to ensure that all reports are accurate and compliant with statute.

04. Certification

Once the exemption request is approved, your company receives a refund on the past 2-4 years of overpaid utility sales tax, and stops paying sales tax on all certified production items, generating significant savings for the business each month moving forward.

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