Texas Comptroller Don Huffines hosted a roundtable with online marketplace sellers, restaurant owners and physicians to hear how the state’s definition of its data processing services tax is affecting their businesses, his office announced Sept. 3.
The session is part of the Taxpayer First Project, an initiative the comptroller’s office describes as an effort to ensure fairness, transparency and respect in how the state administers its tax laws. At issue is an interpretation that extends sales tax to a range of digital transactions, sweeping in businesses that may not think of themselves as buying data processing at all.
Participants included small business owners who sell products on platforms such as Amazon, eBay and Etsy; restaurant owners; and physicians who pay to access electronic medical records, according to the comptroller’s news release. All are subject to the tax under the contested reading of the definition.
“I’ve heard repeatedly that the controversial interpretation of how this tax is applied is hurting Texas businesses and making them less competitive,” Huffines said in the release. “It is also hurting every Texas restaurant that uses delivery platforms like Uber Eats, DoorDash, or Grubhub. Additionally, doctors are being charged a tax to access the electronic medical records of their own patients. That drives up the cost of healthcare in Texas.”
Huffines said the discussion left him convinced that “we need a comprehensive review of how this tax is applied,” and thanked participants, saying fair tax policy “starts with an accurate picture of what is happening in the marketplace, not with assumptions made by bureaucrats in Austin.”
The comptroller, who was sworn into office Aug. 1 and immediately ordered a performance review of all agency operations, said feedback from the roundtable will be evaluated carefully as his office works to ensure every Texas business is treated fairly. He said the agency intends to “deliver results with a private-sector mindset and operate at the speed of business to solve problems and fix what is broken.”