Laws, Regulations and Annotations


Business Taxes Law Guide – Revision 2024

Energy Resources Surcharge Law

Revenue and Taxation Code

Division 2. Other Taxes
Part 19. Energy Resources Surcharge Law

Chapter 3. Special Provisions and Exemptions

Chapter 3. Special Provisions and Exemptions

40041. Constitutional exemptions. The consumption of electrical energy which this state is prohibited from taxing under the Constitution of the United States or under the Constitution of this state is exempt from the surcharge.

40041.5. Board exemption ruling. In any instances where an exemption is claimed by reason of the provisions of Section 40041, an electric utility or a consumer may request the board to issue a ruling as to the validity of the exemption, accompanying the request with a statement showing the facts and basis for the claim. The board shall issue its ruling within 30 days of receipt of the request. Pending issuance of the ruling, the electric utility shall not be obligated to collect the surcharge from the claimant.

40043. Electric utility consumption. The consumption by an electric utility of purchased electrical energy that is used directly, lost by dissipation or unaccounted for in accordance with generally accepted accounting principles by the electric utility in the process of generation, transmission and distribution of electrical energy is exempt from the surcharge.

40044. Pooled electrical energy. When an electric utility purchases electrical energy and pools in its system the energy with electrical energy generated by it, the consumption of electrical energy in this state from the pool by the utility during any quarter shall be deemed to be a consumption of energy generated by it to the extent that the kilowatt-hours of the electrical energy generated by it during the quarter exceeds the kilowatt-hours consumed by the electric utility.

40045. Presumption of consumption. For the purpose of the proper administration of this part it shall be presumed that electrical energy sold by an electric utility in this state to other than an electric utility is consumed by the purchaser in this state until the contrary is established.

40046. Presumption of correct billing. The amount of kilowatt-hours of electrical energy determined by or stated on a billing of an electric utility in accordance with its business practices and accounting records to have been sold to a consumer during any calendar quarter or billing period of the electric utility shall be presumed to be correct. The presumption may be rebutted by evidence which establishes that the amount of kilowatt-hours was other than such amount.