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