Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 3 - TAX ADMINISTRATION › Subchapter O - STATE AND LOCAL SALES AND USE TAXES › Section 3.295 - Natural Gas and Electricity

Current through Reg. 49, No. 28; July 12, 2024
(a) Definitions.
				  The following words and terms, when used in this section, shall have the
				  following meanings, unless the context clearly indicates otherwise.
(1) Crime control and prevention district--A
				  district organized under Local Government Code, Chapter 363 (Crime Control and
				  Prevention Districts), located within the boundaries of a municipality that
				  imposes a sales and use tax on the residential use of natural gas and
				  electricity.
(2) Electric
				  utility--Any entity owning or operating for compensation in this state
				  equipment or facilities for producing, generating, transmitting, distributing,
				  selling, or furnishing electricity whose rates for the sale of electric power
				  are set by the Public Utilities Commission under the Public Utility Regulatory
				  Act. The term does not include:
(A) a
				  qualifying small power producer or qualifying co-generator, as defined in the
				  Federal Power Act, §3(17)(D) and §3(18)(C), as amended (
				  16
				  United States Code §
													796(17)(D) and §
												796(18)(C)
				  ); or
(B) any person not otherwise
				  a public utility that owns or operates in this state equipment or facilities
				  for producing, generating, transmitting, distributing, selling, or furnishing
				  electric energy to an electric utility, if the equipment or facilities are used
				  primarily for the production and generation of electric energy for the person's
				  own consumption.
(3)
				  Fabrication--To make, build, create, produce, or assemble components of
				  tangible personal property, or to make tangible personal property work in a new
				  or different manner.
(4) Fire
				  control, prevention, and emergency services district--A district organized
				  under Local Government Code, Chapter 344 (Fire Control, Prevention, and
				  Emergency Medical Services Districts), located within the boundaries of a
				  municipality that imposes a sales and use tax on the residential use of natural
				  gas and electricity.
(5)
				  Manufacturing--Every operation commencing with the first stage of production of
				  tangible personal property and ending with the completion of tangible personal
				  property. The first production stage means the first act of production and it
				  does not include acts in preparation for production. For example, a
				  manufacturer gathering, arranging, or sorting raw material or inventory is
				  preparing for production. When production is completed, maintaining the life of
				  tangible personal property or preventing its deterioration is not a part of the
				  manufacturing process. Tangible personal property is complete when it has the
				  physical properties, including packaging, if any, that it has when transferred
				  by the manufacturer to another. Also see §
											3.300
				  of this title (relating to Manufacturing; Custom Manufacturing; Fabricating;
				  Processing).
(6) Processing--The
				  physical application of the materials and labor necessary to modify or to
				  change the characteristics of tangible personal property. The property being
				  processed may belong either to the processor or the customer, the only tests
				  being whether the property is processed and whether it will ultimately be sold.
				  Direct use of natural gas or electricity in processing will be referred to as
				  exempt use. Processing does not include remodeling or any action taken to
				  prolong the life of tangible personal property or to prevent a deterioration of
				  the tangible personal property being held for sale. The repair of tangible
				  personal property belonging to another by restoring it to its original
				  condition is not considered processing of that property. The mere packing,
				  unpacking, or shelving of a product to be sold will not be considered to be
				  processing of that product.
(7)
				  Remodeling--To make tangible personal property belonging to another over again
				  without causing a loss of its identity, or without causing the property to work
				  in a new or different manner.
(8)
				  Residential use--Use of natural gas or electricity in a building or the portion
				  of a building occupied as a residence and includes:
(A) use by the owner of a home, apartment
				  complex, housing complex, condominium, campground, recreational vehicle park,
				  nursing home, or retirement home occupied by the owner as a
				  residence;
(B) use by a tenant in a
				  home , apartment complex, housing complex , condominium, campground,
				  recreational vehicle park, nursing home, or retirement home occupied by the
				  tenant as a residence under a contract for an express initial term of more than
				  29 consecutive days. Absent a contract, only the period exceeding 29
				  consecutive days will be considered residential use, when supported by valid
				  documentation (i.e., receipts, canceled checks, etc.); and
(C) use for common areas of an apartment
				  complex, housing complex, condominium, campground, recreational vehicle park,
				  nursing home, retirement home, or homeowners' association, such as use for a
				  recreation room, swimming pool, security gate, or for street lights and
				  exterior lighting in a walkway or parking area.
(D) Residential use does not include use in
				  health care or detention facilities, including hospitals, rehabilitation
				  centers, substance abuse treatment centers, psychiatric facilities, prisons,
				  jails, or other detention centers, or use by the owner or operator of a health
				  care or detention facility.
(9) Tenant--A person who is authorized by a
				  lease to occupy a dwelling to the exclusion of others and who is obligated
				  under the lease to pay rent. The term does not include a patient or inmate of a
				  health care or detention facility, including a hospital, rehabilitation center,
				  substance abuse treatment center, psychiatric facility, prison, jail, or other
				  detention center.