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


Office of House Bill AnalysisH.B. 1098
By: Bonnen
Ways and Means
3/1/2001
Introduced



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 is
ambiguous concerning tax liability on printed materials distributed by
mail.  There exists 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  provides that a purchaser of printed materials
has sole responsibility for any taxes that may be imposed on those
materials when the printer of materials delivers them to the United States
Postal Service for mailing to persons other than the purchaser located
within and outside of this state. 

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 a purchaser of printed
materials has sole responsibility for any taxes that may be imposed on
those materials when the printer of materials delivers them to the United
States Postal Service for mailing to persons other than the purchaser
located within and outside of this state.  The bill provides that a printer
of materials delivered by mail to persons other than the purchaser located
within and outside this state has no duty with respect to the payment or
collection of any taxes imposed on printed materials.  The bill requires a
printer to collect the sales taxes imposed on printed materials when all or
substantially all of the materials will be mailed to persons located within
this state.   

The bill provides a rebuttable presumption, for purposes of the printer's
tax collection duty, that all materials printed at a facility are mailed to
persons located within the state in which the facility is located.  A
purchaser that supplies a certificate to a printer concerning the delivery
of the printed materials for a specific purchase is sufficient to rebut
this presumption.  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

July 1, 2001, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.