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SB 771

Relating to a credit or refund for diesel fuel taxes paid on diesel fuel used in this state by auxiliary power units or power take-off equipment.

89th Legislature (2025) Introduced by Trent Ashby and 1 co-sponsor

Texas tax credit allows diesel fuel tax refunds for fuel used in truck auxiliary power units and equipment, reducing business costs but cutting state transportation funding.

Effective on 9/1/25
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Bill Summary · SB 771

Legislative bill overview

SB 771 establishes a tax credit or refund mechanism for diesel fuel taxes paid on fuel used specifically in auxiliary power units (APUs) or power take-off (PTO) equipment in Texas. The bill allows businesses using diesel in these auxiliary systems—rather than for primary vehicle propulsion—to recover taxes paid on that fuel, effectively creating a distinction between taxable and non-taxable diesel consumption.

Why is this important

This measure directly reduces operational costs for trucking companies, construction firms, and other industries that rely on APUs (which power climate control, refrigeration, or other cab amenities during idle periods) and PTO equipment (which powers hydraulic systems for auxiliary functions). The tax relief could improve competitiveness for Texas-based businesses and may encourage equipment investments, while the state foregoes fuel tax revenue that typically funds transportation infrastructure.

Potential points of contention

  • Revenue impact: Reduces state fuel tax revenue allocated to highway maintenance and transportation infrastructure without identifying alternative funding sources
  • Compliance complexity: Businesses must track and segregate fuel usage between primary propulsion and auxiliary systems, creating accounting and audit burdens
  • Competitive fairness: Benefits primarily larger commercial operators with sophisticated accounting systems over small businesses less able to document fuel allocation
  • Definitional boundaries: Questions remain about what qualifies as "auxiliary" equipment and how edge cases (hybrid systems, borderline applications) will be administered

Compiled from official sources — confirm details with the bill’s official record.

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