By: Schaefer H.B. No. 4357
A BILL TO BE ENTITLED
AN ACT
relating to the application of sales and use taxes to information
technology consulting and technical support services.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The Legislature of the State of Texas finds that
there is uncertainty in the technological sector about when certain
information technology consulting services and technical support
services should be considered taxable services or non-taxable. This
uncertainty has led to confusion and inconsistency among
individuals and businesses in the technology sector in how to
categorize their services and charge customers. Given the rapidly
changing nature of the technology industry, this bill seeks to
provide clarity on when certain technology-related services are
considered non-taxable or taxable services.
SECTION 2. Subchapter A, Chapter 151, Tax Code, is amended
by adding Section 151.00385 to read as follows:
Sec. 151.00385. "INFORMATION TECHNOLOGY CONSULTING AND
TECHNICAL SUPPORT SERVICES." (a) "Information technology
consulting and technical support services" means services
involving the application of information technology knowledge,
including hardware or software architecture, software support,
remote help desk services, technology-related training, and
computer diagnostics and repair, that are:
(1) sold as part of a subscription service for which
the purchaser pays a set amount at regular intervals; or
(2) provided in association with the sale of a taxable
item.
(b) A service is an information technology consulting and
technical support service regardless of whether the person
performing the service sold the hardware, software, or other
information technology with respect to which the service is
performed.
SECTION 3. Section 151.0101(a), Tax Code, is amended to
read as follows:
(a) "Taxable services" means:
(1) amusement services;
(2) cable television services;
(3) personal services;
(4) motor vehicle parking and storage services;
(5) the repair, remodeling, maintenance, and
restoration of tangible personal property, except:
(A) aircraft;
(B) a ship, boat, or other vessel, other than:
(i) a taxable boat or motor as defined by
Section 160.001;
(ii) a sports fishing boat; or
(iii) any other vessel used for pleasure;
(C) the repair, maintenance, and restoration of a
motor vehicle; and
(D) the repair, maintenance, creation, and
restoration of a computer program, including its development and
modification, not sold as part of a subscription [by the person
performing the repair, maintenance, creation, or restoration]
service or in association with the sale of a taxable item;
(6) telecommunications services;
(7) credit reporting services;
(8) debt collection services;
(9) insurance services;
(10) information services;
(11) real property services;
(12) data processing services;
(13) real property repair and remodeling;
(14) security services;
(15) telephone answering services;
(16) Internet access service; [and]
(17) a sale by a transmission and distribution
utility, as defined in Section 31.002, Utilities Code, of
transmission or delivery of service directly to an electricity
end-use customer whose consumption of electricity is subject to
taxation under this chapter; and
(18) information technology consulting and technical
support services.
SECTION 4. The changes in law made by this Act do 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 5. This Act takes effect October 1, 2021.