HBA-ALS H.B. 660 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 660 By: Hilderbran Ways and Means 2/25/1999 Introduced BACKGROUND AND PURPOSE Currently, under Section 151.302 of the Tax Code, a dry cleaning or laundry business pays a sales tax of 8.25 percent on materials such as clothes hangers and plastic wrapping at the time that these materials are purchased by the businesses and a customer pays another sales tax of 8.25 percent at the time that they are resold to the customer, resulting in a total sales tax of 16.5 percent. A national organization representing the industry states that no other state currently imposes this type of taxation on the dry cleaning industry. H.B. 660 authorizes a person to purchase for resale a hanger or material used for covering a cleaned garment which is transferred to the customer as an integral part of a laundry or dry cleaning service thereby, exempting the purchase for resale of these materials from the sales tax. 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 151.302(c), Tax Code, by authorizing a person to purchase for resale a hanger or material used for covering a cleaned garment that is transferred to the customer as an integral part of a laundry or dry cleaning service. SECTION 2. Provides that this Act takes effect on the first day of the first calendar quarter beginning on or after the earliest date that it may take effect under Section 39, Article III, Texas Constitution (Time of Taking Effect of Laws; Emergencies; Entry on Journal). Makes application of this Act prospective. SECTION 3. Emergency clause.