Texas House Bill HB1841

Texas 2011 - 82nd Regular

• Out of House Committee: 4/14/11
• Voted on by House: 4/27/11
• Out of Senate Committee: 5/17/11
• Voted on by Senate: 5/19/11
• Governor Action: 6/17/11
• Report Pass: 5/17/11
• Enrolled: 5/20/11
• Passed: 6/17/11

Caption

Relating to the taxability of Internet hosting.

Impact

The bill states that individuals whose only activity in Texas is using internet hosting services will not be considered as engaging in business within the state. This provision appears designed to encourage the use of internet hosting by clarifying that users of such services will not incur business tax liabilities simply for using these services. By easing the tax burden on internet hosting users, the bill aims to facilitate a more favorable environment for digital business operations in Texas.

Summary

House Bill 1841 addresses the taxability of internet hosting services in Texas by amending the state's Tax Code. It defines internet hosting as providing unrelated users access over the internet to computer services on property managed by the provider, where users can store or process their own data or utilize licensed software. This definition specifically excludes telecommunications services, clarifying the boundaries of what constitutes internet hosting.

Contention

There were discussions regarding the clarity of the definitions and the implications for service providers. Some members of the legislature raised concerns regarding the potential for this bill to create loopholes in state tax law or to unintentionally exclude certain services from taxation. Additionally, the lack of requirements for providers to examine user data or report user activities was seen as a point of contention, raising questions about accountability and the boundary between user privacy and regulatory oversight.