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SB 2423

Relating to the imposition of a tax on certain entities that receive certain federal tax credits related to investing in and developing renewable energy projects in an amount equal to the federal tax credits received.

89th Legislature (2025) Introduced by Bob Hall

SB 2423 would tax Texas entities receiving federal renewable energy credits at a rate equal to those credits, effectively reducing their financial benefit and potentially discouraging clean energy investment.

Referred to Business & Commerce
#comptrollerofpublicaccounts(v2608) #energy--solar(i0316) #energy--wind(ia9ye) #recordsmanagement(s0205) #renewableenergy(s0611) #statefinances--management&control(i0748) #taxation--energyresources(i0810) #taxation--state(i0790) #utilities--electric(i0831)
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Bill Summary · SB 2423

Legislative bill overview

SB 2423 proposes to impose a state tax on entities that receive federal tax credits for renewable energy investments, with the tax amount equaling the federal credits obtained. This would effectively claw back a portion of federal renewable energy incentives at the state level. The bill was introduced by Senator Bob Hall and is currently in the Business & Commerce Committee.

Why is this important

Renewable energy tax credits are major federal incentives designed to accelerate clean energy deployment and reduce costs. A state-level tax mirroring these credits would significantly reduce their financial benefit, potentially deterring renewable energy projects in Texas and affecting the state's energy industry competitiveness. This directly impacts investment decisions for wind, solar, and other renewable projects that currently rely on these federal incentives.

Potential points of contention

  • Economic impact on renewable sector: Effectively doubles the tax burden on federal credits, making renewable projects less financially viable compared to other energy sources and potentially reducing clean energy investment in Texas
  • Federal-state coordination: Raises questions about whether states should tax benefits derived from federal tax policy and could create conflict with federal energy policy objectives
  • Industry opposition: Likely to face strong opposition from renewable energy companies, utilities with clean energy portfolios, and business groups benefiting from current federal incentives

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

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