Texas Sales and Use Tax News for Telecommunications, Oil and Gas
Refunds Available to Cable TV, Internet Access and Telecommunications Providers
Cable television, Internet access and telecommunications providers have until Sept. 2, 2014, to claim a 6.25 percent refund for state sales and use taxes paid on qualifying purchases made Sept. 1, 2013, through Dec. 31, 2013. Read more about qualifying purchase and the process for requesting a refund on the state comptroller website.
Oil and Gas Extraction Equipment Not Eligible for Manufacturing Exemption
The Texas Court of Appeals recently ruled that a taxpayer was not entitled to a manufacturing exemption from Texas sales tax for equipment used in extracting natural gas and oil and for services pertaining to that equipment. According to the court, the taxpayer was not able to claim purchases such as casing, tubing, pumps and related parts for any of the available exemptions, which include:
Property that directly made or caused a chemical or physical change to the product being manufactured
Property that was necessary and essential to a pollution control process
Property that was necessary and essential to comply with governmental public health requirements
Under all three exemptions, the property had to be used or consumed in the actual manufacturing, processing, or fabrication of tangible personal property for ultimate sale, and the court held that the extraction of oil and gas did not qualify.
Sources: Texas State Comptroller, Wolters Kluwer CCH
For more information on how these Texas sales and use tax updates impact your business, contact Doeren Mayhew’s Houston CPAs.