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Texas Tax Report

Texas Comptroller Glenn Hegar Releases Tax Exemptions and Tax Incidence Report

(AUSTIN) — Texas Comptroller Glenn Hegar today released the Tax Exemptions and Tax Incidence report, as required by state law.

The report estimates the value of each exemption, exclusion, discount, deduction, unique accounting method, credit, refund, and particular appraisal available to payers of Texas’ sales, franchise, motor vehicle sales, and oil production taxes, as well as property taxes levied by school districts.

“As we did with the 2018 edition of this report, we’re providing these estimates in advance of the 2021 legislative session for Texas lawmakers who will face a range of complex revenue and spending issues, most notably COVID-19,” Hegar said. “My office stands ready to assist legislators and state leaders as they work to craft a budget and address other issues facing Texans recovering from this unprecedented pandemic and the related economic fallout.”

For fiscal 2021, aggregate exemptions for these revenue sources will total an estimated $58.6 billion. Of this amount, the state reports exemptions related to being $44.5 billion; school property tax exemptions account for the remaining $14.1 billion.

About $14.3 billion of the estimated fiscal 2021 amount represents sales tax exemptions for items taxable under other law, including insurance premiums, motor vehicle sales, and motor fuels. Exemptions from the sales tax on those items are estimated to be worth $7.6 billion, $3.7 billion, and $2.5 billion, respectively.

Other exemptions from the sales tax include $7.2 billion in raw materials used in manufacturing, $3.3 billion in food for home consumption, and $1 billion worth of over-the-counter drugs and prescription medicines and devices.