Texas Senate Bill SB265

Texas 2025 - 89th Regular

• Filed: 11/12/24

Caption

Relating to the applicability of sales and use taxes to certain services provided by a marketplace provider.

Impact

If enacted, SB265 would directly impact the understanding of tax liability related to electronic payments and associated services. The bill delineates that the changes in tax law will only apply going forward, with prior liabilities maintained under their old regulations. This provision suggests a transitional state of compliance for affected entities, allowing them to adjust their operational processes in accordance with the new definitions provided by the legislation. The effective date for these changes is set for October 1, 2025, providing the marketplace providers ample time to prepare for the adjustments in tax reporting and compliance.

Summary

SB265 is a legislative act aimed at amending certain sections of the Texas Tax Code concerning the applicability of sales and use taxes to services provided by marketplace providers. Specifically, the bill seeks to clarify what constitutes data processing services, making distinctions for various financial transactions and the roles of different types of payment processors and marketplace sellers. By specifying these definitions, the bill intends to streamline the tax obligations of marketplace providers and enhance regulatory clarity within the state’s taxation framework.

Contention

While detailed discussions and debates surrounding SB265 included perspectives from various stakeholders, notable points of contention involved the implications of defining certain financial services and whether the bill adequately protects consumer interests in electronic transactions. Critics expressed concerns that the refinements to tax definitions might create loopholes that could be exploited or misinterpreted, potentially leading to non-compliance or disparities in taxation obligations for small versus larger marketplace providers. Furthermore, there was apprehension regarding the clarity of terms, particularly how they relate to consumer privacy and transaction security.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 151. Limited Sales, Excise, And Use Tax
  • Section: 0035

Finance Code

• Chapter 152. Regulation Of Money Services Businesses
  • Section: New Section