Texas Comptroller Sets Sales Tax Holiday For Water And Energy Efficient Products

You can buy certain ENERGY STAR^® energy-efficient products tax-free during the annual Texas ENERGY STAR Sales Tax Holiday.

You can buy certain ENERGY STAR^® energy-efficient products tax-free 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.

This year’s tax-free ENERGY STAR Sales Tax Holiday begins Saturday, May 27, and goes through midnight on Monday, May 29 (Memorial Day).

Qualifying Products

You can buy, rent or lease only the following ENERGY STAR-labeled items tax free:

• air conditioners (with a sales price of $6,000 or less)
• refrigerators (with a sales price of $2,000 or less)
• ceiling fans
• incandescent and fluorescent light bulbs
• clothes washers
• dishwashers
• dehumidifiers
• programmable thermostats

 Non-Qualifying Products

Examples of items that do not qualify and are taxable, even if they are ENERGY STAR-labelled include:

• water heaters
• clothes dryers
• freezers
• stoves
• attic fans
• heat pumps
• wine refrigerators
• kegerators
• beverage chillers

Additional Charges Affect the Sales Price

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 if 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 be more than its price cap.

*Contractors and Taxable Service Providers

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.

Purchases: As a contractor or taxable service provider, you can buy qualifying ENERGY STAR products tax free to keep in your inventory. You do not need to give the seller an exemption or resale certificate.

Sales: During the holiday, contractors and taxable service providers can sell ENERGY STAR products tax free that 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.

More Information

For more information, contact us at Tax Help, or call 800-252-5555.

• Tax Code Section 151.333 – Energy Efficient Products

Rule 3.369 – Sales Tax Holiday-Certain Energy Star Products, Certain Water-Conserving