HBA-JLV H.B. 1098 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 1098
By: Bonnen
Ways & Means
7/10/2001
Enrolled


BACKGROUND AND PURPOSE 

Current law requires a seller to add the amount of the sales tax to the
sales price of tangible personal property or taxable services but prior to
the 77th Legislature,  the law was ambiguous concerning tax liability on
printed materials distributed by mail.  There was a need to clarify
provisions attaching tax liability to the purchaser of printed materials.
The purchaser, rather than the printer, has access to the information
necessary to determine where the printed materials were mailed and is then
able to use the information for their tax purposes.  House Bill 1098
relates to the collection of taxes on printed materials distributed by
mail. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the comptroller of public accounts of
the State of Texas in SECTION 3 of this bill. 

ANALYSIS

House Bill 1098 amends the Tax Code to provide that for the purposes of the
printer's tax collection duty, the presumption that printed materials that
are distributed by the United States Postal Service singly or in sets
addressed to individual recipients, other than the purchaser, are either
produced at a printer's facility in this state or purchased in this state
are for use in Texas and that the printer is required to collect the tax.
In order to overcome this presumption, a purchaser of printed materials
that are distributed is required to issue an exemption certificate to the
printer if the printed materials are for distribution to both in-state and
out-of-state recipients.  The certificate is required to contain the
statement that the printed materials are for multistate use and that the
purchaser agrees to pay to this state all taxes that are or may become due
to the state on the taxable items purchased under the exemption
certificate.   

The bill provides that "printed materials" is defined to be materials that
are produced by web offset or rotogravure printing processes.  The bill
provides that a printer is relieved of the obligation of collecting the
taxes on printed materials, but is required to file a special use tax
report for the comptroller.  The bill authorizes the comptroller of public
accounts of the State of Texas to adopt rules and forms to implement the
tax collection on printed materials distributed by mail. 

EFFECTIVE DATE

September 1, 2001.