89R2463 BEF-F
By: Button H.B. No. 1681
A BILL TO BE ENTITLED
AN ACT
relating to the applicability of sales and use taxes to certain
services provided by a marketplace provider.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 151.0035(b) and (c), Tax Code, are
amended to read as follows:
(b) "Data processing service" does not include:
(1) the transcription of medical dictation by a
medical transcriptionist;
(2) services exclusively to encrypt electronic
payment information for acceptance onto a payment card network
described by Subdivision (3)(E) to comply with standards set by the
Payment Card Industry Security Standards Council; [or]
(3) settling of an electronic payment transaction by:
(A) a downstream payment processor or point of
sale payment processor that routes electronic payment information
to an entity described by Paragraph (C) or (E);
(B) a person who is engaged in the business of
money transmission and required to obtain a license under Section
152.101, Finance Code;
(C) a federally insured financial institution,
as defined by Section 201.101, Finance Code, that is organized
under the laws of this state, another state, or the United States,
or an affiliate of the institution;
(D) a person who has entered into a sponsorship
agreement with an entity described by Paragraph (C) for the purpose
of settling that entity's electronic payment transactions through a
payment card network; or
(E) a payment card network that allows a person
to accept a specific brand of debit or credit card by routing
information and data to settle an electronic payment transaction;
or
(4) services provided by a marketplace provider in
relation to the processing of a sale or payment for a marketplace
seller, as those terms are defined by Section 151.0242.
(c) For purposes of Subsection (b)(3):
(1) "Downstream payment processor" means a person
described by 7 T.A.C. Section 33.4(c), as that provision existed on
January 1, 2021.
(2) "Point of sale payment processor" means a person
described by 7 T.A.C. Section 33.4(d), as that provision existed on
January 1, 2021.
(3) "Settling of an electronic payment transaction"
means the authorization, clearing, or funding of a payment made by
credit card, debit card, gift card, stored value card, electronic
check, virtual currency, loyalty program currency such as points or
miles, or a similar method. [The term does not include charges by a
marketplace provider, as that term is defined by Section 151.0242.]
SECTION 2. 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 3. This Act takes effect October 1, 2025.