How Texas Multifamily Owners File for an Electricity Sales Tax Refund

What You Are Filing and Why

The Texas Comptroller administers all state tax collections, including sales tax on electricity. When a property owner has been charged sales tax on electricity that qualifies for the residential exemption, the Comptroller is the agency that holds those funds and the agency authorized to return them.

Filing the claim is not the same as disputing a vendor charge with your electricity provider. The provider has already remitted the sales tax to the state. Recovering it means filing directly with the Comptroller, providing evidence that the tax was charged on qualifying electricity use, and requesting a refund of the overpaid amount.

Texas law sets the lookback window at four years from the date of filing. The Comptroller accepts claims for overpayments made within that window. Claims for overpayments older than four years are not accepted regardless of the circumstances. This is the hard cutoff that makes timing the claim a meaningful decision.

What the Claim Package Includes

A complete refund claim for apartment common area electricity typically includes the following components.

Invoice history covering four years of electricity billing for the qualifying meters. This is the documentation that establishes what was paid and when. Invoices are requested directly from the retail electricity provider, usually through their account services team or online portal. Providers are required to maintain billing history and produce it upon request by the account holder.

A use statement or use certification for each qualifying meter. This document establishes that the meter serves residential common area use -- hallways, parking garages, pool equipment, laundry rooms, exterior lighting, or other qualifying categories. For straightforward common-area-only meters, this is a simple factual statement about the meter's function.

For mixed-use meters -- where a leasing office, a commercial tenant space, or a non-residential use shares a panel with residential common areas -- the use statement needs to establish which use dominates the total electricity consumption from that meter. When residential use dominates, the entire meter qualifies for the exemption. The supporting analysis is based on the functional breakdown of the space and the loads served by the meter.

The authorization documentation establishing that the filing party has authority to act on behalf of the taxpayer of record. If the claim is filed by a third party on the owner's behalf, the Comptroller needs documentation of that authorization -- typically a Limited Power of Attorney.

What Happens After Filing

The Texas Comptroller's office processes the claim through an internal audit and review procedure. For well-supported claims with clean invoice history and clear use documentation, the review is straightforward. For claims involving mixed-use meters or extended invoice histories, the Comptroller may ask follow-up questions.

The review process typically takes four to six months. During that period, the Comptroller's office may request additional documentation or clarification. PowerCord handles all correspondence with the Comptroller on the owner's behalf during this period, using the Limited Power of Attorney that was signed at the outset.

When the claim is approved, the Comptroller issues a refund. For most claims, this comes as a direct payment to the account holder on record. The refund is for the principal sales tax amount. The state does not pay interest on approved claims.

In cases where the Comptroller denies a portion of the claim -- usually because a specific meter or billing period does not meet the supporting documentation standard -- the owner receives a partial refund for the portions that were approved. Denied portions can sometimes be resubmitted with additional documentation.

What the Ongoing Exemption Filing Does

Filing the refund claim for past overpayments is one track of the process. The other track is stopping future overpayment.

This requires a separate filing with the retail electricity provider, not with the Comptroller. The owner provides the provider with a use certification establishing that specified meters serve residential common areas. Once the provider approves the certification, they remove the 6.25 percent state sales tax from future invoices on those meters. This is a one-time change to the account that applies going forward indefinitely.

The two filings are related but distinct. The refund claim with the Comptroller covers the past. The exemption certification with the provider covers the future. Both should be done, and PowerCord handles both as part of the Tax Recapture process.

The Timeline from Start to Refund

The full timeline, from signing the initial documents through receipt of the refund, typically runs eight to twelve months.

The invoice request to the retail electricity provider takes one to three weeks. Claim preparation takes two to four weeks depending on the complexity of the meter situation. Submission to the Comptroller happens after the package is complete. The Comptroller's review takes four to six months. Payment follows shortly after approval.

This is not a fast process. It is a one-time process with a meaningful outcome. A property that recovers $15,000 from four years of overpaid tax does not need to repeat the exercise -- the going-forward exemption stops future overpayment permanently.

The calculator at powercordenergy.com/tax-recapture estimates the four-year recovery amount based on your property's monthly common-area electricity spend. If the number is worth pursuing, PowerCord handles every step after the two initial signatures.