Texas Comptroller Abolished Sales Tax on Healthcare Tech
Healthcare providers in Texas will no longer pay sales tax on electronic medical records and patient portal systems.
Updated on Oct. 7, 2026 in Healthcare
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Texas Comptroller Don Huffines signed an executive order ending sales tax collection on electronic health records, electronic medical records, and patient portals. This change seeks to correct the application of a 1987 tax rule that the Comptroller stated unfairly captured these technology systems.
Why it matters
The change removes a long-standing tax burden for healthcare operators who rely on data processing services. This order aligns tax enforcement with the Comptroller's assessment that the specific technology was never authorized to be taxed under existing state law.
The order ends a tax policy maintained since its 1987 implementation. Operators can now participate in a 30-day public comment period regarding the proposed administrative change.
The players
Don Huffines
The Texas Comptroller who oversees state tax collection and recently authorized the removal of sales taxes on specific healthcare technologies.
The details
The executive order directs the agency to file a formal amendment with the Texas Secretary of State to codify the exemption. This process will trigger a 30-day public comment period in the Texas Register, allowing stakeholders to weigh in on the policy shift. The Comptroller identified these healthcare systems as incorrectly categorized under the broader umbrella of data processing services subject to sales tax.
Timeline
1987: The Texas Legislature originally implemented a sales tax on data processing services.
August 2026: Don Huffines assumed the role of Texas Comptroller.
October 6, 2026: The Comptroller signed the executive order to abolish the tax.
Market Landscape
This move marks a significant administrative departure from the long-standing application of the 1987 data processing tax. It effectively narrows the scope of taxable services by carving out essential health information technology from the state's broader data processing revenue base.
Healthcare operators should consult with their accounting departments to track the 30-day public comment period for potential updates to their procurement costs. Business owners should prepare to adjust their financial records once the amendment is officially published in the Texas Register.
The takeaway
This policy change potentially lowers overhead for any clinic or hospital investing in digital record-keeping infrastructure. Operators should monitor the Texas Register for the official publication of the proposed amendment to determine exactly when they can cease remitting sales tax on these systems.
Further reading
For more on the regulatory climate for medical practices, review the Healthcare section.
Live Poll
Do you support eliminating state sales taxes on electronic medical record systems and patient portals?
