taxes

Water-Efficient Products Sales Tax Holiday

May 25-27, 2024

The Comptroller encourages all taxpayers to support and buy from Texas businesses while saving money on tax-free purchases of certain water-efficient and water-conserving products during the annual Texas Water-Efficient Products 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 2024 holiday begins Saturday, May 25, and goes through Monday, May 27 (Memorial Day).

WaterSense Products

During the holiday period, you can buy any product tax free that displays a WaterSense^® label or logo. These items can be bought for either personal or business purposes.

Water-Conserving Products

You can also buy certain water-conserving products tax free during the holiday period.

Unlike WaterSense^®-labeled items, these items are only exempt when you buy them for use at your residential property.

You can buy items tax free during the holiday that are used or planted for

• conserving or retaining groundwater;
• recharging water tables; or
• decreasing ambient air temperature, and so limiting water evaporation.

Examples of items that qualify for the exemption include

• a soaker or drip-irrigation hose
• a moisture control for a sprinkler or irrigation system
• mulch
• a rain barrel or an alternative rain and moisture collection system
• a permeable ground cover surface that allows water to reach underground basins, aquifers or water collection points
• plants, trees and grasses
• water-saving surfactants
• soil and compost

Examples of items that do not qualify for the exemption include

• construction/building materials
• awnings and other items used to create shade
• air conditioners*
• ceiling fans*
• sprinklers

*Certain air conditioners and ceiling fans can be bought tax free as part of the Energy Star Sales Tax Holiday during Memorial Day weekend.

Contractors, Landscapers and Other Service Providers

WaterSense Products

Purchases

Contractors, landscapers and other service providers can buy WaterSense^® products tax free to keep in inventory. An exemption or resale certificate is not required.

Sales

Contractors, landscapers and other service providers can sell WaterSense^® products tax free under a separated contract during the holiday period. This exemption applies to residential and business customers.

Water-Conserving Products

Purchases

Since the exemption does not apply to water-conserving products used for business, lump-sum contractors cannot buy water-conserving products tax free to keep in inventory until ready for use in new or existing residential property or in new commercial property. You must continue to pay tax on these items.

Service providers repairing and remodeling commercial property, and all separated contractors, must give a resale certificate to the seller for water-conserving products bought during the holiday period.

Sales

Separated contractors can sell water-conserving products tax free only to individual customers for their residences during the holiday period. Sales to businesses are taxable.

Online Purchases and Telephone Orders

During the holiday you can buy qualifying water-efficient and water-conserving 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 27, 2024 at 5:00 p.m.to purchase a qualifying rain barrel, but the rain barrel will not be shipped until Friday, May 31, 2024 and will not arrive until Tuesday, June 4, 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 27, 2024 and the purchaser does not resubmit payment until Tuesday, May 28, the purchase is taxable.

Sales Tax Holiday Refund Requests

Purchasers can buy certain water-efficient and water-conserving products during the annual Texas Water-Efficient Products 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) that 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.

98-1018
(05/2023)