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.