HBA-ALS H.B. 587 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 587 By: West, George Ways & Means 4/15/1999 Introduced BACKGROUND AND PURPOSE Under current law, a 6.25 percent state sales tax is imposed on motor vehicles that are sold within the state. However, many vehicles are purchased for the sole purpose of customizing and re-selling the vehicle, and not for the personal use of the purchaser. A sales tax is assessed on these transactions despite non-use of the original purchaser. H.B. 587 exempts from sales tax an in-state sale of a motor vehicle that is a new vehicle purchased from a franchised dealer solely for the purpose of customization, adding amenities, and resale if it accumulates no more than 75 miles between the time of its purchase and resale. 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 E, Chapter 152, Tax Code, by adding Section 152.090, as follows: Sec. 152.090. CUSTOMIZATION FOR RESALE. (a) Provides that the taxes imposed by this chapter do not apply to the sale of a motor vehicle if the vehicle is new and purchased from a franchised dealer; the vehicle is purchased with the sole intent of customizing, adding amenities, and reselling the vehicle; the vehicle accumulates no more than 75 miles between the time of its purchase and resale; and the vehicle's purchase and resale occur in this state. (b) Authorizes the comptroller to require a person who is seeking an exemption under this section to present information that establishes a qualification for an exemption. SECTION 2. Makes application of this Act prospective. SECTION 3. Emergency Clause. Effective date: upon passage