Texas Sales Tax Credit for Electricity & Gas Used in Manufacturing

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Summary

Texas companies are exempt from paying state and local sales and use tax on electricity and gas used in manufacturing, processing, or fabricating tangible personal property.

Texas allows businesses to claim exemption on the portion of their utility used in the processing of tangible personal property for sale. Processing also includes the lighting, cooling and heating in the manufacturing area during the actual manufacturing or processing. Utility use in agriculture, including dairy or poultry operations and pumping for farm or ranch irrigation is also exempt.