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.