Texas Senate Bill SB1217

Texas 2025 - 89th Regular

• Filed: 2/11/25

Caption

Relating to sales and use tax exemptions and refunds for certain tangible personal property used to provide cable television services, Internet access services, or telecommunications services.

Impact

The impact of SB1217 is significant as it aims to streamline the tax obligations associated with the provision of essential services such as cable television and internet. By facilitating tax exemptions, the bill intends to create a more favorable economic environment for telecommunications companies and enhance competition in the sector. The repeal of Section 151.3186 of the Tax Code is noteworthy and signals a shift towards more favorable tax treatment for these types of service providers. This change could encourage investment in infrastructure and technology as companies might have lower operational costs.

Summary

SB1217 proposes amendments to the Texas Tax Code, specifically relating to sales and use tax exemptions for tangible personal property utilized by providers of cable television, internet access, or telecommunications services. This bill introduces a new section, 151.3187, which allows sales, leases, or rentals of certain tangible property to be exempt from taxes if the property is directly used in distributing media or communication services. The primary aim of the bill is to support and potentially reduce operating costs for service providers by eliminating certain tax liabilities.

Contention

While the bill seeks to foster economic growth in telecommunications, there may be points of contention regarding the potential loss of tax revenue for the state. Critics of tax exemptions often argue that such measures could lead to budget constraints, affecting funding for essential public services. Moreover, there may be concerns about the equitable application of tax benefits, ensuring that large corporations do not disproportionately benefit at the expense of local businesses or smaller providers. The discussions surrounding the bill will likely involve debates over the balance between stimulating economic development and maintaining adequate state revenue.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 151. Limited Sales, Excise, And Use Tax
  • Section: New Section