HBA-AMW, NRS H.B. 375 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 375 By: Flores Ways & Means 3/22/2001 Introduced BACKGROUND AND PURPOSE The 76th Legislature approved a sales tax holiday for clothing and footwear priced under $100 that begins at 12:01 a.m. on the first Friday in August and ends at midnight on the following Sunday. The comptroller of public accounts estimates that Texans saved $37 million during the 2000 sales tax holiday and $32.6 million during the 1999 sales tax holiday. Under current law, school supplies are not exempted from limited sales, excise, and use taxes during a sales tax holiday. House Bill 375 exempts certain school supplies from sales, excise, and use taxes when purchased during a sales tax holiday. 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. ANALYSIS House Bill 375 amends the Tax Code to provide that the sale or storage, use, or other consumption of a school supply is exempted from the taxes imposed by the Limited Sales, Excise, and Use Tax Act if the item is purchased for use by a public or private elementary or secondary school student. The bill provides for such an exemption if the sale takes place during a period beginning at 12:01 a.m. on the first Friday in August and ending at 11:59 p.m. on the following Sunday and the sales price of each item is less than $75. The bill provides that a retailer is not required to obtain an exemption certificate stating that the school supplies are purchased for use by a student in a class in a public or private elementary or secondary school unless the supplies are purchased in a quantity that indicates that the supplies are not purchased for use by a student in a class in a public or private elementary or secondary school. The bill authorizes the governing body of a local taxing authority to repeal the exemption. EFFECTIVE DATE July 1, 2001, or if the Act does not receive the necessary vote, the Act takes effect October 1, 2001.