The Basic Rule
Texas exempts residential electricity from state sales tax (6.25 percent). Apartment common areas -- hallways, parking garages, pool equipment, laundry facilities, exterior lighting, recreation rooms -- qualify as residential use under Texas law. Most apartment properties are paying sales tax on those meters anyway because the retail electricity provider applies commercial tax treatment by default to business-entity accounts.
The exemption exists. It has to be claimed. When it is claimed, the state allows a refund for overpayments going back four years from the date of filing. The clock is running from the day the property was acquired, not from when someone decides to look into it.
Why This Often Falls Through the Cracks
Property managers oversee a lot of operational details. Electricity accounts are one of dozens of utility relationships. The bills get paid. The accounts stay active. Nobody watches the line items for sales tax treatment because that is not how utility management typically works at the property level.
The retail electricity provider does not audit accounts for residential exemption eligibility. Their default is to charge commercial sales tax on business accounts. There is no mechanism that triggers a review when an account crosses some threshold. The exemption does not appear on the invoice as a line the owner is missing. It just does not appear at all.
So the overpayment continues. Four years goes by. The lookback window -- which is the only period that is recoverable -- keeps moving forward in time while the overpayment keeps accumulating in the rearview mirror.
The PM's Role in the Recovery
The refund belongs to the property owner. How it gets handled after that depends on the management agreement. Some agreements specify that cost savings or one-time recoveries are shared between owner and PM. Some do not address it. Some owners will pass the entire refund to operating income. This is a question for the management agreement and a conversation with ownership, not something PowerCord takes a position on.
What the property manager controls is whether ownership ever hears about the opportunity. If the PM surfaces the Tax Recapture opportunity to the owner, explains the four-year window, and facilitates the first conversation with PowerCord, that is a tangible value-add. If the owner finds out about it through some other channel three years from now, the PM missed a chance to demonstrate they were watching the owner's P&L.
This is the kind of thing that owners remember. Not because the refund is transformative -- it rarely is -- but because it shows the PM was paying attention to things that were not strictly required.
What the PM Needs to Know to Have the Conversation
A few specific points to be clear on before bringing this to ownership.
The four-year window is a hard cutoff, not a suggestion. Texas law does not extend it for extenuating circumstances. Whatever is recoverable today is the maximum recoverable. The number gets smaller relative to today's potential if you wait.
The refund goes to whoever owns the electricity account. In most cases that is the property owner or the management entity. This matters if the property recently changed hands. A new owner can only claim the four years from their ownership period -- or from the date of filing, whichever is shorter. They cannot claim on behalf of prior ownership.
The refund timeline is not fast. Once the claim is filed with the Texas Comptroller, the typical adjudication period is four to six months. This is not a line item that shows up in the next monthly statement. It is a one-time recovery that arrives as a Comptroller-issued refund check, typically six to eight months from when the process starts.
The contingency fee matters for the PM-owner conversation. PowerCord charges 30 percent of the recovered amount. The owner nets 70 percent. On a property recovering $15,000, the owner gets $10,500. There is no cost if nothing is recovered. That structure eliminates the risk objection in most conversations.
How the Process Works for a PM
If an owner decides to proceed, the process does not create significant burden for the property management team. PowerCord needs access to four years of electricity invoices from the retail electricity provider and the account information for the relevant meters. In most cases this means pulling invoices from the provider's online portal or requesting a history from the provider's account team. PowerCord handles the rest.
The owner signs two documents. PowerCord uses a Limited Power of Attorney to coordinate directly with the retail electricity provider, calculate the recoverable amount across all qualifying meters, and file the claim with the Comptroller. The PM's team may be asked to confirm account details or provide access to the invoice history, but the operational lift is minimal.
The Practical Ask
For any property you manage in Texas with common-area electricity accounts, it is worth running the estimate. The calculator at powercordenergy.com/tax-recapture produces a four-year estimate based on monthly common-area electricity spend. Plug in the approximate spend figure for your property. If the number is meaningful to ownership, it is worth a five-minute conversation.
The exemption is real. The four-year window is statutory. The only thing that prevents recovery is not filing before the window closes.
About PowerCord Energy PowerCord Energy is a Texas-based automated energy management platform built specifically for multifamily properties in the ERCOT deregulated market. PowerCord's team has direct operational experience working with property management companies, on-site leasing teams, and retail electricity providers across the DFW multifamily market. Our work is grounded in PUCT regulatory compliance, lease lifecycle management, and the practical realities of managing electricity transitions at scale across residential portfolios.