🔴Relating to the exclusion of certain securities transaction payments from the total revenue of a taxable entity that is a registered securities market operator.

🔴 SB 1058: A Tax Carveout for Texas Stock Exchanges

What it says it does:
SB 1058 says stock exchanges in Texas should not be taxed on money they do not keep. It excludes the rebate payments that exchanges pay to brokers and dealers from the total revenue used to calculate the state franchise tax.

What it actually changes:
This bill creates a new, permanent exemption in the Texas Tax Code. It allows any registered securities market operator to lower its taxable income by subtracting these rebate payments. The exemption directly reduces contributions to the Property Tax Relief Fund, which supports school finance, and requires the state to replace that money from general revenue.

Who is pushing for it:
Senator Tan Parker authored the bill with support from Senator César Blanco. Witnesses in favor included representatives of the Texas Stock Exchange and its affiliate TXSE Group Inc., as well as the Comptroller’s Office for technical feedback.

Who benefits:
The main beneficiaries are the Texas Stock Exchange and similar operators that will launch trading in 2026. They gain a lasting tax advantage that boosts profits and helps them compete with larger national exchanges. Brokers and dealers also benefit because exchanges can maintain rebate programs without additional tax costs.

Who gets left out or exposed:
Public schools lose guaranteed funding from the Property Tax Relief Fund. Small and mid-sized Texas businesses, which cannot claim comparable exclusions, are left paying full franchise taxes. Taxpayers ultimately fill the gap through state general revenue.

Why this matters long term:
SB 1058 sets a precedent for industry-specific tax carveouts. As more sectors ask for similar treatment, the state’s education and infrastructure funds will face slow but steady erosion. Over time, permanent exemptions like this one shift the tax burden from private firms to the general public.

What to watch next:
Watch for additional bills that redefine taxable revenue for select industries. Also track the fiscal reports from the Comptroller to see how much is lost from the Property Tax Relief Fund once the new exchanges begin trading.

Bottom line:
SB 1058 gives a narrow group of financial operators a lasting tax break while shifting hidden costs onto taxpayers and schools. It looks technical, but it quietly changes who carries Texas’s fiscal load.

Questions to ask lawmakers:

If this policy reduces the Property Tax Relief Fund, what is the long-term plan to protect school funding without pushing the cost onto general taxpayers?

Would you support a sunset date or a required public report so Texans can see how much this carveout costs once these exchanges start operating?

If the goal is fairness, why give a targeted tax advantage to a narrow set of financial operators instead of designing a rule that treats industries consistently?


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