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HB 4382

Relating to an exemption from sales and use taxes for certain tangible personal property used in hydraulic fracturing.

89th Legislature (2025) Introduced by Drew Darby

HB 4382 exempts hydraulic fracturing equipment and materials from Texas sales and use taxes, reducing state revenues while lowering operational costs for oil and gas companies.

Left pending in committee
#oil&gas(i0545) #propertyinterests--personalproperty(i0600) #taxation--sales(i0800) #water--development(i0875) #water--general(i0885)
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WeVote Research Nonpartisan
Bill Summary · HB 4382

Legislative bill overview

HB 4382 would exempt certain tangible personal property used in hydraulic fracturing operations from Texas sales and use taxes. The bill specifically targets equipment and materials directly employed in the hydraulic fracturing process, potentially including specialized machinery, chemicals, and tools. This exemption would reduce the tax burden on oil and gas companies conducting these operations within the state.

Why is this important

Hydraulic fracturing is a significant component of Texas's oil and gas industry, which generates substantial state revenue and employment. Tax exemptions directly affect state budget revenues and can influence business investment decisions and operational costs. This policy choice reflects competing priorities between supporting energy sector competitiveness and maintaining tax-based funding for state services.

Potential points of contention

  • Revenue impact: The exemption would reduce state tax revenues, potentially requiring cuts to state services or offsets from other revenue sources during a period when Texas already faces budget pressures
  • Industry fairness: Other manufacturing and industrial sectors might argue they deserve similar tax treatment, raising questions about equitable tax policy
  • Environmental considerations: Some may oppose tax benefits for hydraulic fracturing due to concerns about water usage, groundwater contamination, and other environmental impacts associated with the practice

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

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