If you own an RV or mobile home park in Texas, you may be unknowingly paying sales tax on electricity—when you don’t have to.
Texas law provides a sales tax exemption on electricity for properties where the majority of electricity is used for long-term residential purposes. This exemption can reduce your monthly utility expenses and even allow you to recoup years of overpaid taxes. Here’s how it works—and how to take advantage of it.
What Is the Sales Tax Exemption for Electricity?
Under Texas Administrative Code § 3.295, electricity used for residential purposes is exempt from sales tax if:
- Tenants stay for more than 30 consecutive days, and
- More than 50% of the electricity (measured through a single meter) is consumed by these long-term residents.
This is known as the “predominant use” exemption.
If your RV or mobile home park qualifies, you can eliminate sales tax on your electricity bills going forward—and potentially request a refund for up to four years of previously paid taxes.
Who Qualifies?
Your park may qualify if:
- You have long-term guests (30+ day stays).
- Your utility meter serves both long-term and short-term tenants, but the majority of electricity is used by long-term residents.
- You’re the utility account holder (typically the park owner/operator).
Even parks with a mix of long- and short-term guests may qualify—as long as over 50% of electricity is for long-term use.
How to Claim the Exemption
To take advantage of the exemption, follow these three steps:
1. Conduct a Predominant Use Study
- Hire a registered engineer or qualified professional to analyze 12 months of utility usage.
- The study determines whether over 50% of electricity use qualifies as “residential.”
2. Submit Form 01-339
- This is the Texas Sales and Use Tax Exemption Certificate.
- Provide the completed form and your predominant use study to your electricity provider.
- Your provider will then remove the sales tax from future bills.
3. Keep Records
- Keep copies of the study and exemption certificate.
- These may be needed in the event of a sales tax audit.
Can I Get a Refund for Sales Tax Already Paid?
Yes. If you’ve qualified but have been paying sales tax on electricity, you may be eligible to receive a refund for the last four years.
Steps for Claiming a Refund:
- Complete a predominant use study (same as above).
- Fill out Form 01-158 (Refund Claim for Residential Use of Electricity).
Submit both to the Texas Comptroller, along with supporting documentation.
Why This Matters for Park Owners
Reducing operating expenses directly boosts your bottom line—and your property’s value. Over time, this exemption could save you thousands of dollars per year in utility costs, and in many cases, tens of thousands in retroactive refunds.
If you operate an RV or mobile home park with long-term tenants, this is a high-impact, low-effort opportunity to optimize your finances.
Need Help Navigating the Process?
At North Star Brokerage & Advisory, we specialize in helping RV and mobile home park owners uncover value—whether through improved operations, stronger marketing, or hidden tax opportunities like this one.
Want help finding a qualified engineer for your predominant use study or understanding your refund potential? Contact us and we’ll point you in the right direction.
Also featured on Woodall’s Campground Magazine — Read the article on their website here.
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