HB1681 - Relating to the applicability of sales and use taxes to certain services provided by a marketplace provider.

  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.