Texas Comptroller Don Huffines wants to stop charging sales tax on electronic health record systems, electronic medical record systems, patient portals and other technology that doctors and hospitals use to keep, open or share medical records. The change would amend Rule 3.342, and the comptroller’s office says it is asking Texans to submit comments on it. The proposal was set for publication in the Texas Register on Friday, Oct. 30, with a 30-day comment period to follow.
Nothing has changed yet for anyone’s bills. The tax stays in place until a final rule takes effect, and the comptroller has not named a date. For a patient, the question is whether a tax on the software behind a doctor’s office portal ever reaches the person reading a lab result, and for a practice, whether the rule is worth a comment.
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What would the new rule say about medical record systems?
Rule 3.342 governs how Texas taxes information services. Huffines’s proposal would clarify that electronic health record systems, electronic medical record systems, patient portals and related healthcare technology are neither taxable information services nor taxable data processing services.
The comptroller’s office says the rule now in force was adopted under a previous comptroller and treats technology that stores or shares medical records as taxable. Huffines said in the announcement that “a tax that quietly penalizes people for accessing their own medical information has no place in our system.”
Who pays the tax today?
The bill lands on doctors’ offices and hospitals first. In his Oct. 6 executive order announcement, Huffines said physicians told him at a roundtable the month before that they were charged sales tax on fees to access their patients’ electronic records. The comptroller’s office argues that this raises healthcare costs, and that patients are taxed indirectly for reaching their own information.
BDO, the accounting and advisory firm, described the rule in a client note: under Rule 3.342, 80% of the charge for a taxable information service is subject to sales or use tax. The firm said healthcare organizations and the technology companies that sell or host record systems are the parties affected.
Huffines said the change will save taxpayers “millions of dollars,” but the comptroller’s office has published no estimate of the revenue the state would give up, and it did not break the savings down by provider or patient. He called the move part of his Taxpayer First Project and has said he may propose further changes to how information services and data processing are taxed.
How can someone comment on the proposal?
Comments must be received no later than 30 days after the proposal is published in the Texas Register. The comptroller’s office lists three ways to reach the person handling them:
- Mail to Robin Robinson, Associate Deputy Comptroller for Tax, P.O. Box 13528, Austin, Texas 78711
- Email to Robin.Robinson@cpa.texas.gov
- Phone questions to 512-463-4070 or 800-531-5441, ext. 3-4070
“I want every Texan to know their voice truly matters in this process,” Huffines said. The announcement does not say how the comments will be weighed or when a final rule will be adopted.
When would the tax actually end?
No effective date has been announced. The October executive order directs the agency to propose the amendment, which then moves through filing, publication, the comment window and a final adoption. Until a final rule takes effect, BDO advised taxpayers to follow current law. Huffines said a comptroller “doesn’t get to arbitrarily rewrite the Tax Code,” and the change is going through formal rulemaking with public comment for that reason.
In the meantime, practices that buy these systems keep paying the tax on current charges. The comptroller’s office says the change would relieve “families and healthcare providers,” and it frames the savings as flowing mainly to the physicians and hospitals that pay the fees today.
Where else does health spending leak for people on Medicare?
A tax cut on records software is a change for providers, and a household will not feel it in a copay. The health costs that reach a retiree’s mailbox are Medicare premiums, income surcharges and drug bills, which this proposal does not touch.
“The Keep-It Starter Bundle” is nine guides in one download, one per money leak, including “how to cut Medicare costs: appeal the income surcharge and use the drug cap.” One of its guides also covers a state program that may pay a $202.90 Medicare premium.
This article was produced with AI assistance and edited for accuracy against the sources linked above.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
