Water-Efficient Products Sales Tax Holiday
May 2020
May 23-25, 2020
During the COVID-19 pandemic, the Comptroller encourages all taxpayers to continue practicing social distancing and support and buy from Texas businesses while saving money on tax-free purchases of certain water-efficient and water-conserving products during the annual Texas Water-Efficient Products Sales Tax Holiday. There is no limit on the number of qualifying items you can buy, and you do not need to give the seller an exemption certificate to buy items tax free.
The 2020 holiday begins Saturday, May 23, and goes through Monday, May 25 (Memorial Day).
Online Purchases and Telephone Orders
To promote social distancing, the Texas Comptroller's office wants all taxpayers to know that during the Water-Efficient Products Sales Tax Holiday, you can buy certain water-efficient and water-conserving products online or by telephone, mail, custom order, or any other means (including in-store purchases) that qualify for sales tax exemption when either
the item is both delivered to, and paid for, by the customer during the exemption period; or
the customer orders and pays for the item, and the retailer accepts the order during the exemption period for immediate shipment, even if delivery is made after the exemption period ends.
A seller accepts an order when the seller has acted to fill the order for immediate shipment.
An order is filled for immediate shipment regardless of whether the shipment is delayed due to a backlog of orders, or because stock is currently unavailable to, or on back order by, the seller.
In-Store Purchases
The Comptroller's office urges all taxpayers buying certain water-efficient and water-conserving products at their local retailers to practice appropriate social distancing as described in the Center for Disease Control and Prevention guidelines during the sales tax holiday.
WaterSense Products
During the holiday period, you can buy any product tax free that displays a WaterSense® label or logo. These items can be bought for either personal or business purposes.
Water-Conserving Products
You can also buy certain water-conserving products tax free during the holiday period.
Unlike WaterSense®-labeled items, these items are only exempt when you buy them for use at your residential property.
You can buy items tax free during the holiday that are used or planted for
conserving or retaining groundwater;
recharging water tables; or
decreasing ambient air temperature, and so limiting water evaporation.
Examples of items that qualify for the exemption include
a soaker or drip-irrigation hose
a moisture control for a sprinkler or irrigation system
mulch
a rain barrel or an alternative rain and moisture collection system
a permeable ground cover surface that allows water to reach underground basins, aquifers or water collection points
plants, trees and grasses
water-saving surfactants
soil and compost
Examples of items that do not qualify for the exemption include
construction/building materials
awnings and other items used to create shade
air conditioners*
ceiling fans*
sprinklers
*Certain air conditioners and ceiling fans can be bought tax free as part of the Energy Star Sales Tax Holiday during Memorial Day weekend.
Contractors, Landscapers and Other Service Providers
WaterSense Products
Purchases
Contractors, landscapers and other service providers can buy WaterSense® products tax free to keep in inventory. An exemption or resale certificate is not required.
Sales
Contractors, landscapers and other service providers can sell WaterSense® products tax free under a separated contract during the holiday period. This exemption applies to residential and business customers.
Water-Conserving Products
Purchases
Since the exemption does not apply to water-conserving products used for business, lump-sum contractors cannot buy water-conserving products tax free to keep in inventory until ready for use in new or existing residential property or in new commercial property. You must continue to pay tax on these items.
Service providers repairing and remodeling commercial property, and all separated contractors, must give a resale certificate to the seller for water-conserving products bought during the holiday period.
Sales
Separated contractors can sell water-conserving products tax free only to individual customers for their residences during the holiday period. Sales to businesses are taxable.
Sales Tax Holiday Refund Requests
Purchasers can buy certain water-efficient and water-conserving products during the annual Texas Water-Efficient Products Sales Tax Holiday. If you pay sales tax, however, during the sales tax holiday, then you can ask the seller for a refund of the tax paid. The seller can either grant the refund or provide their customer with Form 00-985, Assignment of Right to Refund that allows the purchaser to file the refund claim directly with the Comptroller's office.
Should you have additional questions about refund requests, please contact us at 800-531-5441, ext. 34545, or visit our Sales Tax Refunds web page for further details on filing a refund claim.
For more information, contact us at Tax Help, or call 800-252-5555.