The Starting Point: Who Is Overpaying and Why
If you own or manage a Texas apartment property and no one has ever filed for the residential electricity exemption on your common area meters, you are almost certainly overpaying.
The reason is procedural, not malicious. Retail electricity providers in the Texas deregulated market default to commercial tax treatment for any account held in the name of a business entity. An LLC, a limited partnership, a management company -- all of them get full sales tax applied by default. The provider is not doing anything wrong. They are following a reasonable assumption: the accountholder is a business, so the rate class and tax treatment are commercial.
The problem is that Texas law defines apartment common areas -- hallways, pool equipment, laundry facilities, parking garages, exterior lighting, recreation rooms -- as residential use of electricity. And residential use of electricity is exempt from the 6.25 percent state sales tax. That exemption has been on the books for years. The retail provider is not required to identify which accounts qualify. That work falls on the owner.
Why the Refund Window Matters Now
Texas law allows taxpayers to file a refund claim for overpaid sales tax up to four years from the date of the filing. That window is not infinite and it does not pause while you are thinking about it. For an owner who bought a property four years ago and has been paying full sales tax on common area meters since then, the entire four-year window is currently open. Wait another year and you lose a year of recoverable amounts.
The math is not complicated. Multiply your monthly common-area electricity spend by 0.0625. That is the monthly sales tax overpayment. Multiply that by 48 months. That is the four-year claim. On a 200-unit property spending $3,500 a month on common-area electricity, the number is roughly $10,500 before any fees.
A portfolio of five similar properties is looking at $52,500 sitting with the Comptroller. That amount does not require any new business relationship, any product installation, or any change to how the property operates. It is a filing.
How the Recovery Process Works
The process has two tracks and they run concurrently.
The first track stops future overpayment. The owner files the necessary exemption documentation with the retail electricity provider. Once approved, the provider removes the sales tax charge from future invoices on the qualifying meters. This is a one-time fix that saves the overpayment going forward, indefinitely.
The second track is the refund claim for past overpayments. The owner files with the Texas Comptroller, supported by four years of invoices from the retail electricity provider and documentation establishing that the meters serve residential use. The Comptroller reviews the claim, typically over four to six months, and issues a refund when approved.
A few things that affect the claim size. Leasing office meters and any meter serving a purely commercial use do not qualify. Mixed-use meters -- where residential common areas share a panel with a small office or commercial tenant -- require a use analysis to determine whether the residential use is dominant enough for the full meter to qualify. That analysis is straightforward on most properties. It is more involved when the commercial load is significant.
The local tax component adds one more consideration. Most Texas cities cannot tax residential electricity. Cities that adopted local sales tax before October 1979 can still tax it. The state exemption applies regardless. If your property is in one of those cities, the state refund is still available; the local portion may not be. The Comptroller maintains the list.
Who Actually Does the Filing
Some owners handle this directly with their retail electricity provider and the Comptroller. The process is documented and the forms are public. For owners who prefer a turnkey approach, PowerCord Energy operates a self-service Tax Recapture product.
The owner signs two documents -- a Service Agreement and a Limited Power of Attorney. PowerCord uses the Limited Power of Attorney to coordinate with the retail electricity provider, pull four years of invoice history, calculate the recoverable amount across all qualifying meters, and file the refund claim with the Comptroller. The entire process is handled on PowerCord's side after the two signatures.
The fee is contingent. PowerCord earns 30 percent of the refund only when the Comptroller pays. There is nothing due up front.
If you want to see the estimate before committing to anything, the calculator at powercordenergy.com/tax-recapture produces a four-year refund estimate based on your property's monthly electricity spend. It takes about two minutes.
The Only Thing That Costs You the Refund Is Inaction
The residential exemption for apartment common area electricity is not new. The four-year lookback is statutory. The filing mechanism has been available for years. The reason most owners have not done this is simple: no one told them they qualified, and the retail electricity provider is not going to bring it up.
That is the entire gap the Tax Recapture product closes. The money is already yours. The Comptroller will issue it. The only variable is whether you file before the four-year 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.