Relating to an exemption from certain motor fuel taxes for counties in this state.

89(R) HB 1109 - Enrolled version - Bill Text

H.B. No. 1109

AN ACT

relating to an exemption from certain motor fuel taxes for counties

in this state.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 162.104(a), Tax Code, is amended to read

as follows:

(a) The tax imposed by this subchapter does not apply to

gasoline:

(1) sold to the United States for its exclusive use,

provided that the exemption does not apply with respect to fuel sold

or delivered to a person operating under a contract with the United

States;

(2) sold to a public school district in this state for

the district's exclusive use;

(2-a)

sold to a county in this state for the county's

exclusive use;

(3) sold to a commercial transportation company or a

metropolitan rapid transit authority operating under Chapter 451,

Transportation Code, that provides public school transportation

services to a school district under Section 34.008, Education Code,

and that uses the gasoline only to provide those services;

(4) exported by either a licensed supplier or a

licensed exporter from this state to any other state, provided that

the bill of lading indicates the destination state and the supplier

collects the destination state tax;

(5) moved by truck or railcar between licensed

suppliers or licensed permissive suppliers and in which the

gasoline removed from the first terminal comes to rest in the second

terminal, provided that the removal from the second terminal rack

is subject to the tax imposed by this subchapter;

(6) delivered or sold into a storage facility of a

licensed aviation fuel dealer from which gasoline will be delivered

solely into the fuel supply tanks of aircraft or aircraft servicing

equipment, or sold from one licensed aviation fuel dealer to

another licensed aviation fuel dealer who will deliver the aviation

fuel exclusively into the fuel supply tanks of aircraft or aircraft

servicing equipment;

(7) exported to a foreign country if the bill of lading

or shipping documents indicate the foreign destination and the fuel

is actually exported to the foreign country;

(8) sold to a volunteer fire department in this state

for the department's exclusive use;

(9) sold to a nonprofit entity that is organized for

the sole purpose of and engages exclusively in providing emergency

medical services and that uses the gasoline exclusively to provide

emergency medical services, including rescue and ambulance

services; or

(10) sold to a nonprofit food bank and delivered into:

(A) the fuel supply tank of a motor vehicle with a

gross vehicle weight rating of at least 25,000 pounds that is owned

by the nonprofit food bank and used to deliver food; or

(B) a storage facility from which gasoline will

be delivered solely into the fuel supply tanks of motor vehicles

described by Paragraph (A).

SECTION 2. Section 162.125, Tax Code, is amended by

amending Subsection (a) and adding Subsection (g-3) to read as

follows:

(a) A license holder may take a credit on a return for the

period in which the sale occurred if the license holder paid tax on

the purchase of gasoline and subsequently resells the gasoline

without collecting the tax to:

(1) the United States government for its exclusive

use, provided that a credit is not allowed for gasoline used by a

person operating under contract with the United States;

(2) a public school district in this state for the

district's exclusive use;

(2-a)

a county in this state for the county's exclusive

use;

(3) an exporter licensed under this subchapter if the

seller is a licensed supplier or distributor and the exporter

subsequently exports the gasoline to another state;

(4) a licensed aviation fuel dealer if the seller is a

licensed distributor;

(5) a commercial transportation company or a

metropolitan rapid transit authority operating under Chapter 451,

Transportation Code, that provides public school transportation

services to a school district under Section 34.008, Education Code,

and that uses the gasoline exclusively to provide those services;

or

(6) a nonprofit food bank that delivers or will

deliver the gasoline into the fuel supply tank of a motor vehicle

with a gross vehicle weight rating of at least 25,000 pounds that is

owned by the nonprofit food bank and used to deliver food.

(g-3)

A county exempt from the tax imposed under this

subchapter that paid tax on the purchase of gasoline is entitled to

a refund of the tax paid, and the county may file a refund claim with

the comptroller for that amount.

SECTION 3. Section 162.204(a), Tax Code, is amended to read

as follows:

(a) The tax imposed by this subchapter does not apply to:

(1) diesel fuel sold to the United States for its

exclusive use, provided that the exemption does not apply to diesel

fuel sold or delivered to a person operating under a contract with

the United States;

(2) diesel fuel sold to a public school district in

this state for the district's exclusive use;

(2-a)

diesel fuel sold to a county in this state for

the county's exclusive use;

(3) diesel fuel sold to a commercial transportation

company or a metropolitan rapid transit authority operating under

Chapter 451, Transportation Code, that provides public school

transportation services to a school district under Section 34.008,

Education Code, and that uses the diesel fuel only to provide those

services;

(4) diesel fuel exported by either a licensed supplier

or a licensed exporter from this state to any other state, provided

that the bill of lading indicates the destination state and the

supplier collects the destination state tax;

(5) diesel fuel moved by truck or railcar between

licensed suppliers or licensed permissive suppliers and in which

the diesel fuel removed from the first terminal comes to rest in the

second terminal, provided that the removal from the second terminal

rack is subject to the tax imposed by this subchapter;

(6) diesel fuel delivered or sold into a storage

facility of a licensed aviation fuel dealer from which the diesel

fuel will be delivered solely into the fuel supply tanks of aircraft

or aircraft servicing equipment, or sold from one licensed aviation

fuel dealer to another licensed aviation fuel dealer who will

deliver the diesel fuel exclusively into the fuel supply tanks of

aircraft or aircraft servicing equipment;

(7) diesel fuel exported to a foreign country if the

bill of lading or shipping documents indicate the foreign

destination and the fuel is actually exported to the foreign

country;

(8) dyed diesel fuel sold or delivered by a supplier to

another supplier and dyed diesel fuel sold or delivered by a

supplier or distributor into the bulk storage facility of a dyed

diesel fuel bonded user or to a purchaser who provides a signed

statement as provided by Section 162.206;

(9) the volume of water, fuel ethanol, renewable

diesel, biodiesel, or mixtures thereof that are blended together

with taxable diesel fuel when the finished product sold or used is

clearly identified on the retail pump, storage tank, and sales

invoice as a combination of diesel fuel and water, fuel ethanol,

renewable diesel, biodiesel, or mixtures thereof;

(10) dyed diesel fuel sold by a supplier or permissive

supplier to a distributor, or by a distributor to another

distributor;

(11) dyed diesel fuel delivered by a license holder

into the fuel supply tanks of railway engines, motorboats, or

refrigeration units or other stationary equipment powered by a

separate motor from a separate fuel supply tank;

(12) dyed kerosene when delivered by a supplier,

distributor, or importer into a storage facility at a retail

business from which all deliveries are exclusively for heating,

cooking, lighting, or similar nonhighway use;

(13) diesel fuel used by a person, other than a

political subdivision, who owns, controls, operates, or manages a

commercial motor vehicle as defined by Section 548.001,

Transportation Code, if the fuel:

(A) is delivered exclusively into the fuel supply

tank of the commercial motor vehicle; and

(B) is used exclusively to transport passengers

for compensation or hire between points in this state on a fixed

route or schedule;

(14) diesel fuel sold to a volunteer fire department

in this state for the department's exclusive use;

(15) diesel fuel sold to a nonprofit entity that is

organized for the sole purpose of and engages exclusively in

providing emergency medical services and that uses the diesel fuel

exclusively to provide emergency medical services, including

rescue and ambulance services; or

(16) diesel fuel sold to a nonprofit food bank and

delivered into:

(A) the fuel supply tank of a motor vehicle with a

gross vehicle weight rating of at least 25,000 pounds that is owned

by the nonprofit food bank and used to deliver food; or

(B) a storage facility from which diesel fuel

will be delivered solely into the fuel supply tanks of motor

vehicles described by Paragraph (A).

SECTION 4. Section 162.227, Tax Code, is amended by

amending Subsection (a) and adding Subsection (f-3) to read as

follows:

(a) A license holder may take a credit on a return for the

period in which the sale occurred if the license holder paid tax on

the purchase of diesel fuel and subsequently resells the diesel

fuel without collecting the tax to:

(1) the United States government for its exclusive

use, provided that a credit is not allowed for gasoline used by a

person operating under a contract with the United States;

(2) a public school district in this state for the

district's exclusive use;

(2-a)

a county in this state for the county's exclusive

use;

(3) an exporter licensed under this subchapter if the

seller is a licensed supplier or distributor and the exporter

subsequently exports the diesel fuel to another state;

(4) a licensed aviation fuel dealer if the seller is a

licensed distributor;

(5) a commercial transportation company or a

metropolitan rapid transit authority operating under Chapter 451,

Transportation Code, that provides public school transportation

services to a school district under Section 34.008, Education Code,

and that uses the diesel fuel exclusively to provide those

services; or

(6) a nonprofit food bank that delivers or will

deliver the diesel fuel into the fuel supply tank of a motor vehicle

with a gross vehicle weight rating of at least 25,000 pounds that is

owned by the nonprofit food bank and used to deliver food.

(f-3)

A county exempt from the tax imposed under this

subchapter that paid tax on the purchase of diesel fuel is entitled

to a refund of the tax paid, and the county may file a refund claim

with the comptroller for that amount.

SECTION 5. 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 of

those taxes.

SECTION 6. This Act takes effect July 1, 2025, if it

receives a vote of two-thirds of all the members elected to each

house, as provided by Section 39, Article III, Texas Constitution.

If this Act does not receive the vote necessary for effect on that

date, this Act takes effect September 1, 2025.

______________________________

______________________________

President of the Senate

Speaker of the House

I certify that H.B. No. 1109 was passed by the House on April

10, 2025, by the following vote: Yeas 132, Nays 14, 1 present, not

voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 1109 was passed by the Senate on May

13, 2025, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

APPROVED: _____________________

Date

_____________________

Governor