RYAN LAW FIRM, LLP WINS SALES TAX CASE FOR EL PASO ELECTRIC COMPANY
November 8, 2018
El Paso Electric Company v. Hegar
The Travis County District Court has recently ruled that El Paso Electric Company (“El Paso”), represented by Doug Sigel, Rich Moore, and Roman Alexander, was eligible for a refund of sales paid when it purchased electric meters.
El Paso is a fully integrated Texas-based public utility company engaging in the generation, manufacturing, transmission, and distribution of electricity in west Texas and southern New Mexico.
The Texas Tax Code exempts the purchase of certain equipment by electricity manufacturers. At issue in the case was El Paso’s purchase of two types of electric meters: substation meters and customer meters, and whether those meters were “telemetry units related to step-down transformers.”
Substation meters were installed at regional substations and interfaced with step-down transformers. Customer meters, on the other hand, are installed onto a customer’s home to provider metrics on how local step-down transformers were functioning and monitor customers’ electricity consumption.
The district court found in favor of El Paso, holding that both types of meters were tax exempt “telemetry units” because they delivered important metrics about step-down transformers. The court further held that because both types of meters were connected to and important in maintaining the electric grid, the meters were “related to” step-down transforms under a plain-meaning construction of the Texas Tax Code.