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Signed Into Law
Signed June 20, 2025Effective 2025-10-01
HB3486

Regular Session

Relating to a deduction from the amount of taxable sales used to calculate the amount of sales and use taxes that the owners of restaurants that purchase Texas farm-raised oysters are required to remit to the comptroller of public accounts.

Government Affairs & Regulatory Compliance Analysis

HB3486: Government Affairs Overview

Effective October 1, 2025, Texas food service establishments may deduct $5. 00 from their taxable sales amount for every 100 Texas farm-raised oysters purchased. This legislation creates a financial benefit for restaurants but imposes strict inventory segregation and invoice substantiation requirements to survive Comptroller audits.

Rep. Todd Hunter·House Bill·Regular Session

Moderate
Low Cost
Effective:2025-10-01
Business Impact

Who HB3486 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-10-01). Consider how these changes may affect your operations.

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Manufacturing & Business

Affected business types:

  • Manufacturers
  • Industrial facilities
  • Supply chain companies
  • Logistics providers
View all manufacturing & business legislation

Key Operational Considerations

  • 1Vendor Agreements: Renegotiate terms with seafood distributors immediately. Contracts must require invoices to explicitly distinguish "Texas Farm-Raised" oysters from wild-caught or imported stock.
  • 2Data Feeds: If utilizing automated Accounts Payable processing, require vendors to assign unique SKU/product codes to these specific oysters to automate the deduction calculation.
  • 3Kitchen/Inventory Staff: Train staff to physically segregate Texas farm-raised inventory if your internal tracking relies on counts at the point of service.
  • 4Bookkeeping/AP: Staff must be trained to recognize the specific origin certification on invoices before entering data into the general ledger.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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HB3486
Relating to a deduction from the amount of taxable sales used to calculate the amount of sales and use taxes that the owners of restaurants that purch...
Moderate Urgency
Passed with Opposition
House Vote131 - 11
YEA
92% in favor142 voting
Senate Vote26 - 5
YEA
NAY
84% in favor31 voting
16
Total Opposition Votes
Cost Impact
Low
Effective
2025-10-01
Enforcing Agencies
Comptroller of Public Accounts
Primary Author: Rep. Todd Hunter
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: October 1, 2025
  • Compliance Deadline: October 1, 2025. (Purchasing systems must be updated by this date to capture data for the November 2025 monthly filing or January 2026 quarterly filing).
  • Agency Rulemaking: The Comptroller of Public Accounts is required to adopt rules to administer this deduction. Expect guidance regarding specific tax return line items and rounding protocols between July 2025 and September 2025.

Immediate Action Plan

  • 1. Audit Supply Chain: Contact your seafood vendors by August 1, 2025, to confirm their ability to certify "Texas Farm-Raised" origin on invoices.
  • 2. Update General Ledger: Create a specific GL account or inventory code for "Qualifying Oyster Purchases" to separate them from standard seafood costs.
  • 3. Modify Tax Software: Configure your sales tax compliance software to apply the formula [($5.00 ÷ 100) × Quantity Purchased] as a deduction from Total Taxable Sales.
  • 4. Review Insurance: Verify that your Tax Errors & Omissions policy covers liability resulting from misclassification of inventory.

Operational Changes Required

Contracts

  • Vendor Agreements: Renegotiate terms with seafood distributors immediately. Contracts must require invoices to explicitly distinguish "Texas Farm-Raised" oysters from wild-caught or imported stock.
  • Data Feeds: If utilizing automated Accounts Payable processing, require vendors to assign unique SKU/product codes to these specific oysters to automate the deduction calculation.

Hiring/Training

  • Kitchen/Inventory Staff: Train staff to physically segregate Texas farm-raised inventory if your internal tracking relies on counts at the point of service.
  • Bookkeeping/AP: Staff must be trained to recognize the specific origin certification on invoices before entering data into the general ledger.

Reporting & Record-Keeping

  • Tax Filing: The Texas Sales and Use Tax Return workflow must be updated to calculate this deduction based on *purchases*, not sales.
  • Audit Defense: You must maintain a "traceability file" linking the deduction claimed on a specific return to specific vendor invoices verifying the "Texas Farm-Raised" origin and quantity.

Fees & Costs

  • Cost Impact: Positive (Tax Savings).
  • Administrative Cost: Minimal increase in administrative overhead for inventory tracking and invoice processing.

Strategic Ambiguities & Considerations

  • Pro-Rating: The statute allows a deduction for "every 100" oysters. It is currently unclear if the Comptroller will allow pro-rating for partial hundreds (e.g., 150 oysters) or if they will require rounding down. Guidance: Assume strict rounding down until rules are published.
  • Spoilage: The deduction is tied to *purchase*, not *sale*. The text implies you retain the tax benefit even if the product spoils or is discarded, but the Comptroller may attempt to narrow this interpretation via rulemaking.
  • Filing Mechanics: It is unknown if the Comptroller will create a dedicated line item for this deduction or require it to be aggregated under "Other Deductions."

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 27, 2025
Passed House
May 8, 2025
Passed Senate
May 23, 2025
Signed
Jun 20, 2025
Effective
Oct 1, 2025
TopicsBusiness & CommerceBusiness & Commerce--generalTaxationTaxation--franchiseTaxation--salesOystersComptroller of Public Accounts
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House Authors

Rep. Todd HunterRepublican · Primary Author
Joint Authors

Senate Sponsors

Sen. Lois KolkhorstRepublican · Primary Sponsor
Cosponsors (2)

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Rep. Todd Hunter

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Related by Topic

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Quick Reference

Frequently Asked Questions

Common questions about HB3486

Q

What does Texas HB3486 do?

Effective October 1, 2025, Texas food service establishments may deduct $5. 00 from their taxable sales amount for every 100 Texas farm-raised oysters purchased. This legislation creates a financial benefit for restaurants but imposes strict inventory segregation and invoice substantiation requirements to survive Comptroller audits.

Q

Who authored HB3486?

HB3486 was authored by Texas Representative Todd Hunter during the Regular Session.

Q

When was HB3486 signed into law?

HB3486 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce HB3486?

HB3486 is enforced by Comptroller of Public Accounts.

Q

How significant are the changes in HB3486?

The regulatory priority for HB3486 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB3486?

The cost impact of HB3486 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB3486 address?

HB3486 addresses topics including business & commerce, business & commerce--general, taxation, taxation--franchise and taxation--sales.

Q

What are the key dates for HB3486?

Key dates for HB3486: Effective date is 2025-10-01. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by HB3486?

HB3486 primarily affects Texas businesses and commercial enterprises. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026