Texas Comptroller Glenn Hegar unveiled the latest edition of the Tax Exemptions and Tax Incidence Report, a detailed overview estimating the value of various tax exemptions available to Texas taxpayers.
This comprehensive report evaluates exclusions, deductions, credits, refunds, special accounting methods, and appraisal considerations pertaining to sales, franchise, motor vehicle sales, oil production taxes, and property taxes assessed by school districts.
“As the 89th Legislative Session progresses and lawmakers engage in the critical task of formulating a biennial budget, the Tax Exemptions and Tax Incidence Report serves as a vital resource,” shared Hegar. “It provides exemption estimates essential for navigating the complexities of revenue and spending decisions. My office is fully committed to aiding legislators in addressing their priorities for the future prosperity of Texas.”
For the fiscal year 2025, total exemptions for these revenue sources are projected to reach approximately $98.14 billion. This figure encompasses around $71.22 billion in state tax exemptions, while the remaining $26.92 billion is attributed to school property tax exemptions.
Breaking it down further, about $27.11 billion of the estimated fiscal 2025 exemptions relate to sales tax exemptions on items subjected to other tax laws—specifically insurance premiums, motor vehicle sales, and motor fuels. These exemptions are estimated at $14.95 billion, $6.35 billion, and $4.54 billion, respectively.
Additional noteworthy sales tax exemptions highlighted in the report include $9.68 billion pertaining to raw materials utilized in manufacturing, $4.3 billion for food purchases for home consumption, and $1.08 billion in exemptions for over-the-counter medications and prescription drugs.
This report adheres to the requirements set forth in Texas Government Code Section 403.0141, which mandates the Comptroller of Public Accounts to provide an analysis of tax incidents and associated exemptions.
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