The Legislative Budget Board Report shows that in many cases, fracking has reduced some producers' tax liabilities to nothing.
The exemptions were started to encourage fracking, since it was originally a more expensive method of drilling.
However, as fracking has become more common, the issue is now being reconsidered.
Between 2004 and 2011, the Legislative Budget Board Report found that Texas lost roughly $1.2 billion dollars in revenue because of tax exemptions.
Producers have countered that removing the tax exemption could cause drilling to move from Texas to other states.