Bill Text: TX SB153 | 2021-2022 | 87th Legislature | Enrolled
Bill Title: Relating to the exclusion of certain payment processing services from the definition of "data processing service" for purposes of sales and use taxes.
Spectrum: Partisan Bill (Republican 8-0)
Status: (Passed) 2021-06-14 - Effective on . . . . . . . . . . . . . . . October 1, 2021 [SB153 Detail]
Download: Texas-2021-SB153-Enrolled.html
S.B. No. 153 |
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relating to the exclusion of certain payment processing services | ||
from the definition of "data processing service" for purposes of | ||
sales and use taxes. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 151.0035, Tax Code, is amended to read as | ||
follows: | ||
Sec. 151.0035. "DATA PROCESSING SERVICE". (a) "Data | ||
processing service" includes: | ||
(1) word processing, data entry, data retrieval, data | ||
search, information compilation, payroll and business accounting | ||
data production, and other computerized data and information | ||
storage or manipulation; | ||
(2) the performance of a totalisator service with the | ||
use of computational equipment required by Subtitle A-1, Title 13, | ||
Occupations Code (Texas Racing Act); and | ||
(3) [ |
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the use of a computer or computer time for data processing whether | ||
the processing is performed by the provider of the computer or | ||
computer time or by the purchaser or other beneficiary of the | ||
service. | ||
(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 | ||
151.302(a), 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. | ||
(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. | ||
(d) "Data storage," as used in this section, does not | ||
include a classified advertisement, banner advertisement, vertical | ||
advertisement, or link when the item is displayed on an Internet | ||
website owned by another person. | ||
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, 2021. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I hereby certify that S.B. No. 153 passed the Senate on | ||
April 19, 2021, by the following vote: Yeas 31, Nays 0; and that | ||
the Senate concurred in House amendment on May 27, 2021, by the | ||
following vote: Yeas 31, Nays 0. | ||
______________________________ | ||
Secretary of the Senate | ||
I hereby certify that S.B. No. 153 passed the House, with | ||
amendment, on May 18, 2021, by the following vote: Yeas 144, | ||
Nays 0, one present not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
Approved: | ||
______________________________ | ||
Date | ||
______________________________ | ||
Governor |