Texas Comptroller Huffines Ends Tax on Medical Records
(AUSTIN) — Texas Comptroller Don Huffines today signed an executive order (PDF) to abolish the tax on medical records and the systems doctors use to access them.
“No Texan should have to pay a tax to see their own medical records,” Huffines said. “And no doctor should be taxed for pulling up the chart of the patient sitting in front of them. Healthcare is expensive enough. The last thing government should do is pile a hidden tax on top of it.
“Healthcare costs are outrageous and totally out of control. It is one of the top reasons that families file for bankruptcy. We will do our part to make healthcare as affordable as we can by saving taxpayers millions of dollars in taxes that should never have been charged.”
Huffines heard the problem firsthand last month at a roundtable discussion that included small business owners and physicians. Doctors told him they were being charged sales tax just to access the electronic medical records of their own patients.
“That’s a tax on healthcare,” Huffines said. “Every dollar a doctor’s office sends to Austin for a tax nobody voted for is a dollar it can’t spend on nurses, equipment, or reducing the cost for patients.”
Under the rule established by previous leadership of the Comptroller’s office, technology that stores or shares medical records was unfairly subjected to the sales tax, which meant Texans could get hit with a tax just for accessing their own medical information. The Huffines rule change clarifies that it is neither taxable information services nor taxable data processing services.
Huffines said the problem is similar to the one he found with marketplace fees: a decades-old tax rule stretched to cover things the Legislature never intended.
“When the Legislature wrote these rules, doctors’ offices weren’t running cloud-based record systems and patients weren’t logging into portals,” Huffines said. “A Comptroller doesn’t get to arbitrarily rewrite the Tax Code. If it’s not authorized in the law, it’s not a tax.”
The Huffines rule change ends taxes on charges for:
- electronic health record (EHR) systems;
- electronic medical record (EMR) systems;
- patient portals; and
- other healthcare technology systems used to maintain, access, or share medical records.
The Huffines executive order directs the agency to publish a proposed amendment to Rule 3.342, governing the taxation of information services. Under the updated rule, electronic health records, electronic medical records, patient portals, and other healthcare technology systems would no longer be taxed as information services or data processing services.
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. Texans can submit feedback to the Comptroller’s office during that window.
“This is how you lower the cost of healthcare without spending a dime of taxpayer money: Stop taxing it,” Huffines said. “Ending this tax isn’t a cost to government, because this money should never have been collected in the first place.”
This is the latest step in Huffines’ Taxpayer First Project, his effort to bring fairness, transparency, consistency, and respect to how Texas collects taxes. Last week, Huffines ended a hidden double tax on marketplace fees that hit Texans when they ordered food, booked a ride, or shopped online. He said his office will continue to review how the information services and data processing taxes are interpreted and may propose additional changes in the future.
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