Bill also reduces disparity in taxes paid by customers of different providers
More than 5.5 million cable and other video service subscribers, representing about 15.3 million Texans, would save more than $115 million a year in tax payments – significantly more than the current three-day sales tax holiday – under House Bill 1900 filed by State Rep. Craig Eiland, D-Galveston.
HB 1900 would exempt the first $75 of a subscriber’s monthly bill from state sales tax. Cable and other terrestrial video consumers now pay about 14.5 percent in taxes on their monthly bills – the state’s 6.25 percent sales tax and other local sales and franchise fees and taxes of up to 8.25 percent.
“Texans pay some of the highest telecommunications taxes in the nation,” Eiland said. “My bill will give millions of Texans a much-needed tax break and also erase disparities in the law that force some consumers to pay significantly higher taxes than others.
“Most Texans get their TV service one of two ways – cable or satellite. I believe that, in most cases, the government should not give a competitive advantage to one business over another by the way we tax them, yet that is what we do with cable and satellite. This bill will bring cable taxes down closer, yet still higher, than satellite.”
House Ways and Means Committee Chairman Harvey Hilderbran, R-Kerrville, said of the bill, “We are working hard to reform the Texas Tax Code and bring tax relief to as many Texans as we can. Rep. Eiland’s proposal compliments my efforts to bring tax relief to small business and residential consumers by limiting taxes on cable television programming.”
The tax break would not apply to Texans who get their video programming from a satellite provider or a streaming video provider because, under federal law, those subscribers pay only the 6.25 percent state sales tax instead of the 14.5 percent cable tax.
Eiland said the state sales tax exemption he is proposing is similar to one that exempts the first $25 in monthly Internet charges from state sales tax
“Hard working Texans deserve a tax break, and both consumers and businesses deserve a fair tax system,” Eiland said. “This bill delivers both.”
State Rep. Craig Eiland was first elected to the Texas House of Representatives in 1994. He represents House District 23, which includes Chambers County and part of Galveston County