For the second time in a week, Comptroller Don Huffines is moving to wipe out a tax he says Texans should never have been paying in the first place.
This time, he is targeting sales taxes charged on electronic medical records and the technology doctors use to access them.
Huffines signed an executive order Tuesday directing his office to eliminate the sales tax currently applied to electronic medical records, patient portals, and other healthcare technology used by doctors and patients.
“No Texan should have to pay a tax to see their own medical records,” said Huffines. “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.”
Under the Comptroller’s current rules, technology used to store, maintain, or share medical records has been treated as a taxable “information service” or, alternatively, as a taxable data processing service.
The executive order states that physicians have reported being charged sales tax to access their own patients’ electronic medical records, with those costs ultimately passed through the healthcare system.
“Healthcare costs are outrageous and totally out of control. It is one of the top reasons that families file for bankruptcy,” said Huffines. “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 said he heard about the issue firsthand last month during a roundtable discussion with small business owners and physicians.
“That’s a tax on healthcare,” said Huffines. “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.”
The move comes just a week after Huffines targeted another tax interpretation as part of his “Taxpayer First Project.”
Last week, Huffines directed the comptroller’s office to remove marketplace and platform fees from the definition of taxable data processing services.
That interpretation, adopted under former Comptroller Glenn Hegar in 2025, affected fees paid to platforms used for online shopping, food and grocery delivery, ride-sharing, short-term rentals, and other services.
In both cases, Huffines has argued that decades-old tax rules have been stretched to cover modern technology that lawmakers never contemplated when the taxes were enacted.
The new executive order notes that the Legislature imposed the sales tax on data processing services in 1987, “for a world of mainframes and data-entry workers,” rather than the cloud-based systems now used by doctors and patients.
“When the Legislature wrote these rules, doctors’ offices weren’t running cloud-based record systems and patients weren’t logging into portals,” said Huffines. “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 change will still have to go through the state’s rulemaking process, including a public comment period of at least 30 days.
“This is how you lower the cost of healthcare without spending a dime of taxpayer money: Stop taxing it,” said Huffines. “Ending this tax isn’t a cost to government, because this money should never have been collected in the first place.”
Huffines has said his office will continue reviewing how Texas applies its taxes on information and data processing services and could propose additional changes.
