HBA-CBW H.B. 3156 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3156 By: Miller Ways & Means 4/12/2001 Introduced BACKGROUND AND PURPOSE In 1999, the Texas Legislature approved a sales tax holiday for clothing and footwear priced less than $100. The comptroller of public accounts estimates that Texas saved more than $60 million during the 1999 and 2000 sales tax holidays. Exempting school supplies, sewing notions, and certain child safety products from taxation during the sales tax holiday would further reduce taxes on individual households. House Bill 3156 exempts backpacks, a sewing notion, school supplies and certain child safety products from the limited sales, excise, and use tax during the sales tax holiday. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the comptroller of public accounts in SECTION 2 of this bill. ANALYSIS House Bill 3156 amends the Tax Code to exempt a backpack and a sewing notion from the limited sales, excise, and use tax (taxes) if the sales price of the item is less than $100 and the sale occurs during the tax holiday period. The bill also exempts the sale of a car safety seat for a child, bicycle helmet, elbow pads, or knee pads from the taxes if the sale occurs during the tax holiday period. The bill expands the tax holiday from three days to five days. The bill provides that the sale of a school supply is exempted from the limited sales, excise, and use tax if the supply is purchased for use by a student in a class in a public or private elementary or secondary school, the sale occurs during the tax holiday period, and the sales price of a school supply is less than $25. If supplies are packaged by the retailer and sold as a unit, the sales price for the unit is exempt from the $100 limit provided that each individual supply in the unit would qualify for the exemption if it was sold separately. During the sales tax holiday, the bill authorizes a retailer to advertise that the retailer will pay the tax or a portion of the tax and requires a retailer who advertises to pay the tax to remit the full amount of the tax due on the sales price of the item sold. The bill provides that a person purchasing, storing, using or consuming a taxable item in this state is liable for the taxes unless the receipt from the retailer specifically states that the retailer is responsible for the taxes. The bill authorizes the governing body of a local taxing authority to repeal the application of the limited sales, excise, and use tax exemptions, regardless if it occurred on or after January 1, 2000, if the repeal is done in a manner that complies with state sales and use tax exemptions in relation to local sales and use taxes and the governing body simultaneously repeals the application of all of the exemptions. The bill authorizes the comptroller of public accounts (comptroller) to adopt an emergency rule without prior notice or hearing , or with any abbreviated notice and hearing that the comptroller finds practicable or the implementation of the above provisions. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.