HBA-GUM H.B. 2088 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2088
By: Goodman
Ways & Means
4/16/1999
Introduced



BACKGROUND AND PURPOSE 

Current law treats Internet access and certain other Internet services as
taxable information services or as taxable data processing.  Some critics
suggest that Texas' tax law may be hostile to growth of the Internet and
related businesses.  H.B.2088 repeals Sections 151.0035, which defines
"data processing service," and 151.0038, which defines "information
service," Tax Code.  This bill redefines "taxable services" and
"magazine"to make conforming changes, and "telecommunications services" to
provide that the term does not include an Internet access service . In
addition, this bill defines "Internet," and "Internet access service."  

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 Subchapter A, Chapter 151, Tax Code, by adding Sections
151.00393 and 151.00394, as follows: 

Sec. 151.00393.  "INTERNET."  Defines "internet."

Sec. 151.00394.  "INTERNET ACCESS SERVICE."  Defines "Internet access
service." 

SECTION 2.  Amends Section 151.0101(a), Tax Code, to make conforming
changes with repect to SECTION 5 of this Act.. 

SECTION 3.  Amends Section 151.0103, Tax Code, to exclude Internet access
service from the definition of "telecommunications services." 

SECTION 4.  Amends Section 151.320(b), Tax Code, to make a conforming
change with respect to SECTION 5 of this Act. 

SECTION 5.  Repealer: Sections 151.0035 ("Data Processing Service") and
151.0038 ("Information Service"), Tax Code. 

SECTION 6.  Effective date: October 1, 1999.
 Makes application of this Act prospective.

SECTION 7.  Emergency clause.