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

89(R) HB 1681 - Introduced version - Bill Text

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.