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Texas Sales Tax: Proposed Legislation Would Make Labor to Drill Oil & Gas Wells, Variety of Other Services Taxable

On March 1, 2019, Representative Springer filed HB 2915 in the Texas House of Representatives. The bill was introduced as a comprehensive means to reduce local property taxes. Notably, the bill would amend the Tax Code to make the following services taxable:

  • · Accounting and audit services
  • · Automotive services
  • · Barbering or cosmetology services
  • · Dating services
  • · Debt management services
  • · Funeral services
  • · Hunting or fishing guide services
  • · Interior design and decorating
  • · Massage therapy
  • · Packing services
  • · Personal instruction services
  • · Transport services
  • · Veterinary services

In addition, the proposed legislation would also amend the Texas Tax Code to make real property “construction” services, a term which the bill defines broadly to include construction, repair, restoration, remodeling, or modification of an improvement to real property, taxable. Oil and gas wells are considered improvements to real property. Therefore, if passed, the bill would make labor charges to drill and complete oil and gas wells, as well as labor charges for new commercial construction and all residential labor, taxable.

This bill is currently in consideration before the House Ways & Means Committee and has not yet come up for vote in the Texas House or Senate. Our firm will continue to monitor this and other bills affecting Texas taxpayers.

For more information about this article, please visit texastaxlaw.com/blog or contact Jimmy Martens or Allison Cunningham.

About Martens, Todd, Leonard & Ahlrich

Martens, Todd, Leonard & Ahlrich is a trial and appellate law firm headquartered in Austin, Texas, handling only tax cases. The firm specializes in Texas sales tax and Texas franchise tax controversies. The firm’s attorneys have handled cases all the way through the Texas Supreme Court and U.S. Supreme Court. The firm’s attorneys speak and write frequently on a variety of Texas sales tax and franchise tax topics and have published articles in publications such as the Journal of State Taxation, the Texas Bar Journal, the Texas Lawyer, and the Texas Tech Administrative Law Journal. For more information, please visit texastaxlaw.com.