HBA-JLV H.B. 863 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 863
By: Dutton
Ways & Means
3/1/2001
Introduced



BACKGROUND AND PURPOSE 

Current Texas law exempts certain items from the state's 6.25% sales and
use tax and generally, food purchased for preparation and consumption is
not taxed.  Many Texans do not know which items are exempt from the tax,
and as a result, some neighborhood merchants may impose the sales tax on
items that should not be taxed.  House Bill 863 requires retail grocers to
post a sign listing all of the items that are exempt from the sales and use
tax. 

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 1 (Section 151.3015, Tax Code) of this bill. 

ANALYSIS

House Bill 863 amends the Tax Code to require retail grocers to post a sign
listing items that are exempt from the sales and use tax.  The bill
requires the comptroller, by rule,  to prescribe the design and size of the
sign and the relevant items that must be listed on the sign.  The bill also
requires the comptroller to determine which items are relevant for listing
based on whether the item is usually sold by retail grocers and to review
the sign every two years to determine if the listings require amendment.
The bill further requires the comptroller to provide the sign to retail
grocers at a reasonable charge.  Each retail grocer is required to post the
sign not later than January 1, 2002. 

EFFECTIVE DATE

September 1, 2001.