Texas Tax Roundup | September 2023 | Insurance, Data Processing, Video Games!

Hi folks! Welcome back to the Texas Tax Roundup, September 2023 edition. We got some insurance services, data processing services, and amusement services (a pretty sales tax heavy last month). Let’s see what went down!

Rules

Battery Sales Fee

34 Tex. Admin. Code § 3.711, 48 Tex. Reg. 5739 (Sept. 29, 2023)—The Comptroller adopted proposed amendments to Rule 3.711, relating to the battery sales fee, without change. These amendments implement S.B. 477, 87th R.S. (2021), which required marketplace providers to collect applicable fees related to the sale of lead-acid batteries.

Notable Additions to the State Tax Automated Research (“STAR”) System

Sales and Use Taxes

Insurance Services

STAR Accession No. 202308020L (Aug. 21, 2023)—In this private letter ruling, the Comptroller determined the taxability of various services provided by an employment benefit recordkeeping services provider, retirement plan third-party administrator, and government savings facilitator. The Comptroller found that the taxpayer’s flex spending account services (which involved the design, implementation, and administration of employee health reimbursement and flex spending accounts), Omnibus Budget Reconciliation Act (COBRA) administration services, and retire plan administration and 401(k) recordkeeping services were nontaxable services. The taxpayer’s Affordable Care Act (ACA) comprehensive and eligibility verification service (which involved evaluating employees’ eligibility or qualification for insurance coverage under the ACA) was a taxable insurance service.[1] The taxpayer’s ACA reporting service (which involved the automated generation, printing, distribution, and filing of IRS Forms 1094-C and 1095-C) was a taxable data processing service.[2]

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