The Comptroller encourages all taxpayers to support Texas businesses while saving money on tax-free purchases of certain ENERGY STAR® energy-efficient products during the annual Texas ENERGY STAR Sales Tax Holiday. There is no limit on the number of qualifying items you can buy, and you do not need to give the seller an exemption certificate to buy items tax free.
The 2023 tax-free ENERGY STAR Sales Tax Holiday begins Saturday, May 27, and goes through midnight on Monday, May 29 (Memorial Day).
You can buy, rent or lease only the following ENERGY STAR®-labeled items tax free:
Examples of items that do not qualify and are taxable, even if they are ENERGY STAR®-labeled include:
If you perform new construction or residential repair and remodeling contract work, you are a contractor. If you repair or remodel nonresidential real property, you are a taxable service provider.
As a contractor or taxable service provider, you can buy qualifying ENERGY STAR® energy-efficient products tax free to keep in your inventory. You do not need to give the seller an exemption or resale certificate.
During the holiday, contractors and taxable service providers can sell ENERGY STAR® energy-efficient products tax free if they are incorporated into real property under a separated contract.
Examples of products incorporated into real property are central air conditioning units, ceiling fans and built-in appliances such as dishwashers. This exemption applies to both residential and business customers.
During the holiday you can buy qualifying ENERGY STAR® energy-efficient products in-store, online, by telephone, mail, custom order, or any other means. The sale of the item must take place during the specific period. The purchase date is easy to determine when the purchase is made in-store but becomes more complicated with remote purchases. The purchaser must have given the consideration for the item during the period even if the item may not be delivered until after the period is over.
For example, if a purchaser enters their credit card information in an online shopping website on Monday, May 29, 2023 at 5:00 p.m.to purchase qualifying incandescent light bulbs, but the incandescent light bulbs will not be shipped until Friday, June 2, 2023 and will not arrive until Tuesday June 6, the purchase will still qualify for the exemption. However, if the charge to your credit card is declined by the payment processor at 11:00 p.m. on Monday, May 29, 2023 and the purchaser does not resubmit payment until Tuesday, May 30, the purchase is taxable.
Delivery, shipping, handling, and transportation charges by the seller are part of the item's sales price. Charges for installing free-standing items are also part of the item's sales price. If the item you buy is not taxable, then these charges are not taxable.
For air conditioners and refrigerators (because they have a price cap), you have to look at the item's total sales price to determine whether you can buy it tax free.
For example, you buy an ENERGY STAR® refrigerator for $1,995 with a $50 delivery charge for a total sales price of $2,045. Because the refrigerator's total sales price is more than the $2,000 cap for refrigerators, tax is due on the entire $2,045 sales price.
If a delivery charge is billed per item, and an invoice has both exempt and taxable items, only the qualifying exempt item's delivery charge is exempt.
For a flat-rate delivery charge, the total delivery charge is applied to the tax-exempt items and is exempt if it does not cause the item's sales price to exceed its price cap.
Purchasers can buy certain ENERGY STAR® energy-efficient products during the annual Texas ENERGY STAR Sales Tax Holiday. If you pay sales tax on these items during the sales tax holiday, you can ask the seller for a refund of the tax paid. The seller can either grant the refund or provide their customer with Form 00-985, Assignment of Right to Refund (PDF), which allows the purchaser to file the refund claim directly with the Comptroller’s office.
Should you have additional questions about refund requests, please contact us at 800-531-5441, ext. 34545, or visit our Sales Tax Refunds web page for further details on filing a refund claim.
For more information, contact us at Tax Help, or call 800-252-5555.