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Texas comptroller ends tax on medical records

Texas comptroller ends tax on medical records

Rule Changes

Executive order ends sales tax on electronic health records and patient portals

Yesterday: Huffines signs executive order ending medical records tax

Overview

Updated 2 hours ago

Texas doctors and patients were paying sales tax just to access medical records. Comptroller Don Huffines signed an executive order on October 6 ending that tax, covering electronic health record systems, patient portals, and other healthcare technology.

The tax dated to 1987, when the Legislature imposed it on data processing services for a world of mainframes and data-entry workers. The rule change is now in a 30-day public comment period before it takes effect.

Why it matters

If finalized, Texas doctors and patients stop paying sales tax on electronic health records and medical record access, lowering care costs.

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Key Indicators

30
Days of public comment period
The proposed Rule 3.342 amendment is open for public comment for 30 days after publication in the Texas Register.
39
Years the tax was in place
The data processing tax was imposed in 1987 and applied to medical records systems decades later.
Thousands
Potential tax cost per practice
The tax could amount to thousands of dollars per physician practice annually, according to the Texas Medical Association.

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People Involved

Organizations Involved

Timeline

1987 October 2026

4 events Latest: Yesterday
Tap a bar to jump to that date
  1. Huffines signs executive order ending medical records tax

    Latest Executive Order

    The order abolishes the sales tax on EHR systems, patient portals, and other healthcare technology used to maintain, access, or share medical records.

  2. Huffines ends marketplace fees tax

    Policy Change

    Comptroller ended a hidden double tax on marketplace fees for food delivery, ride-hailing, and online shopping.

  3. Texas imposes sales tax on data processing

    Legislation

    The Legislature imposed the sales tax on data processing services for a world of mainframes and data-entry workers.

Scenarios

1

Rule finalized, medical records tax officially ends

Likely Resolves by End of 2026

Discussed by: Texas Comptroller's office, Texas Medical Association

The 30-day public comment period ends without significant opposition. The Comptroller's office adopts the amended Rule 3.342, officially ending the tax on EHR systems, patient portals, and medical record access. The change takes effect and Texas doctors and patients stop paying the tax.

2

Rule faces legal challenge

Possible Resolves by Q2 2027

Discussed by: Tax attorneys, healthcare industry observers

A party challenges the rule change in court, arguing the Comptroller exceeded his authority by exempting services the Legislature intended to tax. The case could delay implementation or force the Legislature to clarify the law.

3

Legislature codifies the exemption

Possible Resolves by May 31, 2027

Discussed by: Texas Medical Association, healthcare policy analysts

The Texas Legislature passes a bill codifying the exemption in statute, making it permanent regardless of who holds the Comptroller's office. This would protect the change from being reversed by a future comptroller.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

1987

Texas data processing tax (1987)

The Texas Legislature imposed the sales tax on data processing services in 1987, when data processing meant mainframes and data-entry workers. The tax was later applied to cloud-based systems that didn't exist when it was written.

Then

The tax applied to a narrow set of data processing services in the mainframe era.

Now

Decades later, the tax was stretched to cover electronic health records, patient portals, and other modern digital services, driving up healthcare costs.

Why this matters now

Shows how a tax designed for one technological era gets applied to entirely different services, and why the Comptroller's office is now reviewing its interpretation.

September 2026

Marketplace fees tax (2026)

Comptroller Don Huffines ended a hidden double tax on marketplace fees that hit Texans when they ordered food, booked a ride, or shopped online through platforms like DoorDash and Grubhub.

Then

Texans stopped paying the hidden tax on marketplace transactions.

Now

Established a pattern of the Comptroller's office reviewing and eliminating outdated tax interpretations under the Taxpayer First Project.

Why this matters now

Shows the Comptroller's office is actively reviewing how information services and data processing taxes are interpreted, with the medical records tax being the latest target.

Sources

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