Hughes Bill Drops State Sales Tax On Cable, Internet Gear

The text as introduced · 402 words

89R13559 CJD-D

By: Hughes
S.B. No. 1217

A BILL TO BE ENTITLED

AN ACT

relating to sales and use tax exemptions and refunds for certain

tangible personal property used to provide cable television

services, Internet access services, or telecommunications

services.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended

by adding Section 151.3187 to read as follows:

Sec. 151.3187. PROPERTY USED IN CABLE TELEVISION, INTERNET

ACCESS, OR TELECOMMUNICATIONS SERVICES. (a) In this section,

"provider" means a provider of cable television service, Internet

access service, or telecommunications services.

(b) Except as provided by Subsection (c), the sale, lease,

or rental or storage, use, or other consumption of tangible

personal property is exempted from the taxes imposed by this

chapter if:

(1) the property is sold, leased, or rented to or

stored, used, or consumed by a provider or a subsidiary of a

provider; and

(2) the property is directly used or consumed by the

provider or subsidiary described by Subdivision (1) in or during:

(A) the distribution of cable television

service;

(B) the provision of Internet access service; or

(C) the transmission, conveyance, routing, or

reception of telecommunications services.

(c) The exemption provided by this section does not apply

to:

(1) the sale, lease, or rental or storage, use, or

other consumption of tangible personal property directly used or

consumed in or during the provision, creation, or production of a

data processing service or information service; or

(2) a tax authorized or imposed under Subtitle C,

Title 3.

SECTION 2. Section 151.3186, Tax Code, is repealed.

SECTION 3. (a) The repeal of Section 151.3186, Tax Code, by

this Act does not affect a refund for which a taxpayer:

(1) became entitled to the refund before the effective

date of this Act; and

(2) timely filed a claim for the refund with the

comptroller of public accounts on or before March 31, 2026.

(b) Except as provided by Subsection (a) of this section,

the change in law made by this Act does not affect tax liability

accruing before the effective date of this Act. That liability

continues in effect as if this Act had not been enacted, and the

former law is continued in effect for the collection of taxes due

and for civil and criminal enforcement of the liability for those

taxes.

SECTION 4. This Act takes effect January 1, 2026.