HBA-RBT C.S.H.B. 2406 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2406 By: Cuellar Ways & Means 4/6/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Export items are exempt from the sales and use tax. Currently, many brokers are executing export documentation forms and delivering them to the customers prior to export. The form is not supposed to be executed until after visual verification of export. Customers can take these invalid certificates to the store and redeem their tax even though they have never left the country. Stores are allowed to refund the tax if the customer has a valid certificate. C.S.H.B. 2406 implements distinctions between retailers located in counties that do or do not border the United Mexican States and the different time periods that must elapse before the retailers may refund the tax paid. 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 Sections 151.307, Tax Code, by amending Subsection (d), and adding Subsections (e) and (f), to set forth the circumstances under which a retailer who receives documentation is prohibited from refunding tax paid under this chapter, providing a distinction between retailers located in counties bordering the United Mexican States and those who do not. Provides that a retailer who makes a refund before the prescribed time, makes an undocumented refund, or makes a refund that is improperly documented is liable for the amount of the tax refunded with interest. Redesignates Subsection (d) to (f). Makes conforming changes. SECTION 2. Effective date: September 1, 1999. Makes application of this Act prospective to exemptions to the sales and use tax imposed under Chapter 151, Tax Code, claimed on or after January 1, 2000. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute deletes proposed SECTIONS 1, 2, 3, 4, 6, and 7, of the original bill, which proposed regulations to customs brokers regarding verification of payment of taxes on tangible personal property exported beyond the territorial limits of the United States of America. The substitute also differs from the original by deleting the proposed amendments to Sections 151.307(b) and (c), Tax Code.