HBA-GUM H.B. 3421 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3421
By: Davis, Yvonne
Ways & Means
4/14/1999
Introduced



BACKGROUND AND PURPOSE 

Tax authorities are currently treating van converters as manufacturers and
collecting a tax on a converter's inventory even though the converters do
not, at any time, own the vehicles they convert. The tax authorities then
collect a tax again on the same vehicles when they are retailed by a Texas
dealer.  Exempting van converters' inventory from the ad valorem tax and
collecting the tax only at the retail sale would avoid double taxation.
H.B. 3421 provides that the term "dealer's motor vehicle inventory" does
not include a motor vehicle that is held for conversion for a dealer by a
licensed converter. 

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 Section 23.121(a)(4), Tax Code, to provide that the term
"dealer's motor vehicle inventory" does not include a motor vehicle that is
held for conversion for a dealer by a licensed converter. 

SECTION 2.  Effective date:  January 1, 2000.
 Makes application of this Act prospective.

SECTION 3.  Emergency clause.