Texas House Bill HB2962

Texas 2025 - 89th Regular

• Filed: 2/18/25

Caption

Relating to an exemption from taxes imposed on the gross receipts of electricity sold to political subdivisions.

Impact

The bill proposes amendments to Section 182.022(d) of the Texas Tax Code, setting a clear path for how electric utilities and retail electric providers are required to adjust their billing to reflect this tax exemption for political subdivisions. By mandating timely adjustments to billing as tax liabilities decrease, the legislation reinforces the obligation of utilities to ensure compliance while improving the overall financial management of the affected entities.

Summary

House Bill 2962 aims to provide an exemption from taxes imposed on the gross receipts of electricity sold to political subdivisions, such as public school districts. The intent of the bill is to relieve the financial burden on these entities by eliminating the tax liability for electricity purchases. This could potentially lead to significant savings for local governments, thereby allowing them to redirect these funds towards essential services and infrastructure needs.

Contention

While the bill seeks to ease financial pressures on local governments, notable points of contention may arise regarding the potential impact on state revenue. Critics might argue that exempting political subdivisions from these taxes could result in decreased funding for state programs, necessitating careful consideration of the long-term fiscal implications. Furthermore, the adjustments required from utility companies may present administrative challenges, raising concerns about the efficiency and feasibility of implementing these changes consistently across the state.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 182. Miscellaneous Gross Receipts Taxes
  • Section: 022

Utilities Code

• Chapter 36. Rates
  • Section: New Section

• Chapter 31. General Provisions
  • Section: New Section