The Comptroller's office publishes this newsletter to keep you informed about Texas taxes. Tax Policy News provides general information and is not a substitute for legal or other professional advice.
Texas taxpayers can save money on tax-free purchases of certain ENERGY STAR® energy-efficient products and certain water-efficient and water-conserving products during the annual Texas ENERGY STAR® Sales Tax Holiday and Water-Efficient Products Sales Tax Holiday. The 2022 holidays begin Saturday, May 28, and go through Memorial Day (Monday, May 30, ending at midnight). 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.
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 ENERGY STAR®-labeled, include:
Contractors and taxable service providers can buy qualifying ENERGY STAR® energy-efficient products tax free to keep in inventory. An exemption or resale certificate is not required.
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 that might be considered 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 non-residential customers.
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. 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:
Examples of items that qualify for the exemption include:
Examples of items that do not qualify for the exemption include:
WaterSense® Products Purchases
Contractors and other taxable service providers can buy WaterSense® products tax free to keep in inventory. An exemption or resale certificate is not required.
WaterSense® Products Sales
Contractors and other taxable 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, contractors and taxable service providers cannot buy water-conserving products tax free to keep in inventory using the sales tax holiday exemption even if the item will be used in new or existing residential property.
Taxable service providers repairing and remodeling commercial property, and all contractors using separated contracts, can purchase items tax free with a resale certificate just as they would outside of the holiday period.
Water-Conserving Products Sales
Contractors using separated contracts 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 ENERGY STAR® energy-efficient products and certain 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 holiday period (beginning Saturday, May 28, and ending at midnight on Monday, May 30).
The purchase date is easy to determine when the purchase is made in-store but becomes more complicated with remote purchases. The purchaser must give the consideration for the item during the holiday period even if the item may not be delivered until after the holiday period is over.
For example, if a purchaser enters their credit card information in an online shopping website on Monday, May 30, at 5:00 p.m. to purchase a qualifying rain barrel, but the rain barrel will not be shipped until Friday, June 3, and will not arrive until Tuesday, June 7, the purchase will still qualify for the exemption. However, if the charge to credit card is declined by the payment processor at 11 p.m. on Monday, May 30, and the purchaser does not resubmit payment until Tuesday, May 31, the purchase is taxable.
Additional Charges Affect Purchase Price
Some items listed are only exempt during these holidays depending on their price. Delivery, shipping, handling and transportation charges by the seller are part of the item’s sales price. Consider these charges when determining whether an item can be purchased tax free during the holiday.
For example, you purchase 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 price cap for refrigerators, tax is due on the entire $2,045 sales price.
Sales Tax Holiday Refund Requests
During these annual sales tax holidays, purchasers can buy certain items tax free. However, if a purchaser pays sales on these items during the sales tax holiday, they 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 our Refunds Department at 800-531-5441, ext. 34545, or visit our Sales Tax Refunds web page for further details on filing a refund claim.
The Comptroller’s office will mail invoices to insurers by the end of May for the Volunteer Fire Department Assistance Fund Assessment, and payment is due Aug. 1, 2022.
This assessment applies to property and casualty insurers writing homeowners insurance, fire insurance, farm and ranch owners insurance, private passenger auto physical damage insurance, commercial auto physical damage insurance and the non-liability portion of commercial multi-peril insurance.
A new webpage is available online:
The Comptroller’s office proposed the following rule for public comment through the Texas Register:
Rule 3.9 – Electronic Filing of Returns and Reports; Electronic Transfer of Certain Payments by Certain Taxpayers
Publication date – May 27, 2022
Comment period end date – June 26, 2022
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The Comptroller’s office offers video tutorials on filing and paying sales tax through Webfile. View them on our Video Tutorials webpage.
Our office also offers virtual Sales and Use Tax Seminars conducted via Webex Events. New taxpayers are especially encouraged to attend these overviews of tax responsibilities for buyers, sellers, and service providers. For more information, visit the Taxpayer Seminars webpage.
Visit our Tax Training Resources webpage to:
The Practitioners’ Corner is a one-stop resource for information about filing and paying taxes, links to tax research sources and searchable databases.