Taxation & Revenue Committee clears broad tax‑code cleanup bill (HB218)

The Taxation & Revenue Committee unanimously approved a do‑pass recommendation for House Bill 218, a department‑sponsored tax‑code cleanup bill that would repeal dozens of obsolete code sections and make multiple technical and administrative changes to state tax law.

Taxation & Revenue Department staff said the bill shortens the tax code by repealing 81 obsolete sections, aligns destination‑sourcing language for the grocery sales tax, removes an attorney‑general approval requirement for certain refunds and abatements, allows electronic filing of tax liens with the secretary of state, and standardizes language for individual and corporate income tax credits. The department compiled the package after a review of chapter 7 and consultations with stakeholders and the Interim Revenue Stabilization and Tax Policy Committee in October 2024, staff said.

The department also described a set of clarifications for oil‑and‑gas related language. Secretary Gloria Shartan Clark told the committee the bill mirrors language across multiple oil‑and‑gas tax acts (sections listed in the bill text as 1 14, 1 15, 1 21, 1 22, 1 25, 1 26, 133 and 134 in the draft) to clarify that “skim” and “slop” oil recovered from produced water are taxed once at sale rather than taxed multiple times when third‑party water recyclers separate recoverable hydrocarbons. Secretary Clark said many taxpayers are already treating such material as taxed once, and the change is intended to make the statute consistent with current practice.

Committee members asked for clarifications. Representative Duncan asked whether third‑party contracts could trigger double taxation; Secretary Clark said the language was adjusted with the Energy, Minerals and Natural Resources Department to clarify that these small quantities of recovered hydrocarbons are taxed once at sale. Another member asked why advance payments are due by the 25th of the month in some sections; the secretary said the bill standardizes deadlines to align with other tax‑filing deadlines to ease compliance and administration.

A member moved and another seconded a do‑pass recommendation. The committee proceeded to a roll‑call vote and recorded unanimous approval: Representatives Chandler, Duncan, Gallegos, Henry, Hernandez, Lundstrom, Martinez, Montoya, Patajon, Silva, Terrazas, Vice Chair Cadena and the chair voted yes. The committee chair announced the unanimous vote and staff said HB 218 will return on the committee’s Monday agenda along with two other bills being rolled.