HBA-RBT H.B. 1292 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1292
By: Shields
Ways and Means
2/25/1999
Introduced



BACKGROUND AND PURPOSE 

Current law, written in 1993, allows a qualified tax exempt organization to
hold two days of tax-free auctions or sales per year.  Items sold for less
than $5,000 per item may be sold without sales tax being assessed.  An item
sold for more than $5,000 must be assessed sales tax.  The intent of the
current law is to prevent organizations or individuals from buying and
selling high dollar items at charity events merely to avoid paying sales
tax.  The comptroller's office generally does not enforce collection of
sales tax on items which sell for less than $10,000.   

H.B. 1292 amends the Tax Code to conform with practice and to avoid the
imposition of any criminal or civil penalties for accepted practices.
Bringing the code into compliance with common practice encourages
truthfulness and adherence to the law by both charities and the private
individuals who support such charities.  Accordingly, H.B. 1292 raises to
$10,000 the maximum sales price of an item that may be sold tax-free at a
charity auction or event. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 151.310(c), Tax Code, to increase the maximum
sales price from $5,000 to $10,000 for a taxable item to be exempt from the
sales tax imposed by Subchapter C of this chapter at a tax-free sale or
auction. 

SECTION 2.  Effective date: The first day of the first calendar quarter
beginning on or after the                earliest date that it may take
effect under Section 39, Article III, Texas Constitution. 
            Makes application of this Act prospective.