January 17, 2025

Texas Comptroller Glenn Hegar Releases Tax Exemptions and Tax Incidence Report

(AUSTIN) — Texas Comptroller Glenn Hegar today released the Tax Exemptions and Tax Incidence Report, which estimates the value of each exemption, exclusion, discount, deduction, special accounting method, credit, refund and special appraisal available to payers of Texas’ sales, franchise, motor vehicle sales and oil production taxes, as well as property taxes levied by school districts.

“As the 89th Legislative Session kicks into high gear and legislators begin the difficult work of crafting a biennial budget, the Tax Exemptions and Tax Incidence Report provides lawmakers with exemption estimates to help them navigate a range of complex revenue and spending issues,” Hegar said. “My office stands ready to assist legislators as they begin to tackle critical priorities and work toward ensuring Texas' future prosperity.”

For fiscal 2025, aggregate exemptions for these revenue sources will total an estimated $98.14 billion. Of this amount, exemptions related to state taxes included in the report amount to $71.22 billion; school property tax exemptions account for the remaining $26.92 billion.

About $27.11 billion of the estimated fiscal 2025 amount represents sales tax exemptions for items taxable under other law, including insurance premiums, motor vehicle sales and motor fuels. Exemptions from the sales tax on those items are estimated to be worth $14.95 billion, $6.35 billion and $4.54 billion, respectively.

Other exemptions from the sales tax include $9.68 billion in raw materials used in manufacturing, $4.3 billion in food for home consumption and $1.08 billion worth of over-the-counter drugs and prescription medicines and devices.

This report also presents the results of the analysis prepared in accordance with Texas Government Code Section 403.0141, which directs the Comptroller of Public Accounts to report on the incidence of certain taxes and exemptions.