Texas Comptroller Moves to End Sales Tax on Medical Records Systems
Comptroller Don Huffines ordered a rule change to stop taxing electronic health record systems and patient portals as information or data processing services.
Texas will stop charging sales tax on the electronic systems doctors and patients use to keep and see medical records, under an order Comptroller Don Huffines signed October 6. The change still has to clear the state’s rulemaking process before it takes effect.
“No Texan should have to pay a tax to see their own medical records,” Huffines said in announcing the order. “And no doctor should be taxed for pulling up the chart of the patient sitting in front of them.”
What changes
Under the comptroller’s current rule, the state taxes technology that stores or shares medical records as an information service or a data processing service. Huffines’ order directs the agency to propose an amendment to Rule 3.342, which governs how information services are taxed. Under the amended rule, electronic health record systems, electronic medical record systems, patient portals and other technology used to maintain, access or share medical records would no longer be taxed as either.
Huffines said doctors raised the problem at a roundtable with small business owners and physicians, telling him they were being charged sales tax to open the electronic records of their own patients. His office did not put a dollar figure on the change, saying only that it would save taxpayers “millions of dollars in taxes that should never have been charged.”
“A Comptroller doesn’t get to arbitrarily rewrite the Tax Code. If it’s not authorized in the law, it’s not a tax,” Huffines said.
When it takes effect
The proposed amendment will be filed with the Texas Secretary of State and published in the Texas Register, followed by a 30-day public comment period in which Texans can send their views to the comptroller’s office. The order sets no effective date.
The move follows Huffines’ decision the week before to end what his office called a double tax on marketplace fees charged when Texans order food, book a ride or shop online. His office said it will keep reviewing how the information services and data processing taxes are applied.
Huffines was sworn in as comptroller on August 1 after Gov. Greg Abbott appointed him to the office.
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