Honorable Jane Nelson, Chair, Senate Committee on Finance
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB153 by Perry (relating to the exclusion of certain payment processing services from the definition of "data processing service" for purposes of sales and use taxes.), Committee Report 1st House, Substituted
No significant fiscal implication to the State is anticipated.
The bill would amend Section 151.0035 of the Tax Code to exclude certain payment processing services from the definition of “data processing service” and provide certain definitions of terms associated with payment processing services, with the result that charges for such payment processing would be exempt from the sales and use tax. These services would include services exclusively used to encrypt electronic payment information for acceptance onto a payment card network and settling of electronic payment transaction by a downstream payment processor or point of sale payment processor that routes electronic payment information. The bill would not affect tax liability accruing prior to September 1, 2021.
According to the Comptroller, the bill's provisions would apply exclusively to the fees charged to process and fund credit payments by banks, networks, and end card processing companies, and would have no significant fiscal impact on the state.
This bill would take effect September 1, 2021.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.