Texas – Refund For Property Used to Provide Cable, Internet and Telecommunications Services

SALT Report 2790 – Recently enacted legislation in Texas provides a sales and use tax refund for property used to provide cable television service, Internet access service, or telecommunications services, effective September 1, 2013.

Under the provisions of House Bill 1133, a provider is entitled to a tax refund for the sale, lease or rental, or storage, use, or other consumption of tangible personal property if:

  • The property is sold, leased, or rented to, or stored, used or consumed by, a provider or a subsidiary of a provider. and
  • The property is directly used or consumed by the provider or subsidiary in or during the distribution of cable television service, the provision of Internet access service, or the transmission, conveyance, routing or reception of telecommunications services

However, tax paid on items directly used or consumed in or during the provision, creation, or production of data processing or information services would not be eligible for a refund.

The bill provides an annual limit of $50 million on the aggregate amount of refunds that could be made during a calendar year. If the total amount of tax paid by all providers and subsidiaries for a calendar year is more than $50 million, then each provider or subsidiary would be entitled to a pro rata share of $50 million.

For Further Information

Texas State Legislature – House Bill 1133, Laws 2013