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

Texas Senate Bill 771 (SB771) allows businesses to receive a credit or refund for diesel fuel taxes paid on fuel used by auxiliary power units (APUs) or power take-off (PTO) equipment. Previously, such credits or refunds were available for gasoline but not for diesel fuel used in these devices. This bill corrects that discrepancy, enabling businesses to reclaim taxes on diesel fuel used for non-propulsion purposes, such as operating equipment or providing power while stationary.

Supporters of SB771 argue that it promotes fairness by aligning tax treatment of diesel and gasoline used in APUs and PTO equipment. They believe this change will reduce operational costs for businesses, particularly in the transportation and construction sectors, by allowing them to reclaim taxes on diesel fuel used for non-propulsion purposes. This could lead to increased investment in more efficient equipment and support economic growth in these industries.

Critics of SB771 express concern over the potential loss of tax revenue for the state, estimated at approximately $5.23 million over the biennium ending August 31, 2027. They worry that this reduction in revenue could impact funding for public services and infrastructure projects. Additionally, some argue that the bill may disproportionately benefit larger businesses with extensive use of APUs and PTO equipment, potentially creating an uneven playing field for smaller operators.