HBA-JRA H.B. 2832 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2832 By: Isett Ways & Means 4/1/1999 Introduced BACKGROUND AND PURPOSE The Texas Comptroller of Public Accounts is responsible for recovering tax revenue due to the state. The time it takes to audit tax payers and recover such revenue is significant. Allowing businesses to perform managed self-audits and use percentage-based reporting under the comptroller's supervision may save the state time and money. H.B. 2832 authorizes businesses to perform selfaudits under the comptroller's supervision and authorizes the comptroller to establish a system of percentage-based reporting. 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 A, Chapter 111, Tax Code, by adding Sections 111.0037 and 111.0038, as follows: Sec. 111.0037. SELF-AUDITING UNDER SUPERVISION OF COMPTROLLER. Authorizes a taxpayer to apply to the Comptroller of Public Accounts (comptroller) for permission to conduct its own tax audit under the supervision of the comptroller. Requires the comptroller to allow the taxpayer to do so if the auditing procedures used by the taxpayer are accurate and verifiable, the nature of the taxpayer's business makes a self-audit reasonable, and allowing the taxpayer to conduct its own audit is likely to be time-efficient. Authorizes the comptroller to supervise, verify, or audit the audit process. Provides that any interest or penalty is waived on any delinquent tax found by a self-audit, notwithstanding Sections 111.060 (Interest on Delinquent Tax) and 111.061 (Interest on Delinquent Tax). Entitles the taxpayer to a refund of any tax overpayment found by a self-audit. Sec. 111.0038. PERCENTAGE-BASED REPORTING. Authorizes the comptroller to implement a system of percentage-based reporting that allows a taxpayer to report its future tax responsibilities based on a historical percentage calculated from a sample of transactions. SECTION 2. Amends Section 111.104, Tax Code, by amending Subsection (f) and adding Subsections (g) and (h), as follows: (f) Provides that Subsection (g) provides an exception to this subsection. (g) Authorizes a person who holds a sales tax permit under Chapter 151 (Limited Sales, Excise, and Use Tax) and who makes a claim under this section for refund of sales taxes paid by the person in error to take a credit on the person's sales tax return for the amount claimed to have been paid in error. Provides that the person is liable for the tax due and any applicable interest and penalty if the claim is finally denied in whole or in part. (h) Requires the comptroller, in finding whether an amount of tax has been unlawfully or erroneously collected, to use the same or similar audit sampling techniques used by the comptroller to determine if there is any tax deficiency. SECTION 3. Effective date: September 1, 1999. Makes SECTION 2 of this Act applicable to a claim for a refund of tax made on or after the effective date of this Act, without regard to whether the tax is claimed to have been erroneously paid before, on, or after that date. SECTION 4. Emergency clause.