The bill, H.B. No. 2825, proposes amendments to the Texas Tax Code regarding sales and use tax rates for tangible personal property used in providing cable television, Internet access, or telecommunications services. Effective January 1, 2028, a new section, 151.3187, will be added, establishing a reduced tax rate of four percent for the sale, lease, rental, or consumption of such property when it is used by providers or their subsidiaries. This section outlines specific conditions under which the reduced rate applies and clarifies that it does not extend to property used in data processing or information services. Additionally, the comptroller is tasked with adopting rules to implement this section, including provisions for partial refunds of taxes collected at the higher rate.

Furthermore, the bill repeals Section 151.3186 of the Tax Code, but ensures that any refunds entitled to taxpayers before the bill's effective date remain unaffected, provided claims were filed by March 31, 2027. The bill clarifies that tax liabilities incurred before the effective date will continue under the previous law, ensuring that enforcement remains intact. Overall, the legislation aims to provide tax relief for certain service providers while maintaining the integrity of existing tax obligations.

Statutes affected:
Introduced: Tax Code 151.3186 (Tax Code 151)
House Committee Report: Tax Code 151.3186 (Tax Code 151)