Texas – Electricity Users Must Have a Registration Number to Claim Agricultural and Timber Exemptions

SALT Report 1257 – Beginning January 1, 2012, a person claiming a Texas sales tax exemption on the purchase of items used in the production of agricultural and timber products, including electricity, must provide a registration number issued by the Comptroller of Public Accounts on the exemption certificate.

Agriculture and timber producers may apply online to get a registration number which will be required on all exemption certificates for billing cycles beginning January 1, 2012. As of that date, utility providers will be required to either obtain a blanket exemption certificate with the customer’s registration number or collect tax.

If a purchaser fails to provide their registration number at the time of sale a retailer may later accept a refund claim from the purchaser provided the purchaser’s registration number was active when the sale was initially made.  If the number was active, the retailer may handle the refund or provide the purchaser with an Assignment of Right to Refund (Form 00-985).  If the number is invalid or was not active on the date of the sale, the retailer should direct the purchaser to file a refund claim directly with the comptroller’s office.

A new agricultural exemption certificate, Form 01-924, will be provided and must be used by purchasers claiming a tax exemption for electricity used in agriculture.  A new timber operations exemption certificate, Form 01-925, will be provided and must be used by purchasers claiming a tax exemption on electricity used in timber operations.  Exempt organizations and manufacturers will continue to use the current exemption certificate Form 01-339.

A retailer may verify the validity of a customer’s registration number through the comptroller’s online system.  However, verification is not required before accepting in good faith an exemption certificate with a registration number.

For Further Information:

Texas Comptroller of Public Accounts – Letter to Utility Providers Regarding Sales Tax Exemptions

Texas Taxes for Agriculture and Timber Industries