BILL ANALYSIS S.B. 737 By: Henderson (Wolens) April 20, 1995 Committee Report (Unamended) BACKGROUND In 1987 legislation was introduced that would have placed legal services under the state sales and use tax. Instead, an occupational fee is now charged to all practicing attorneys in the state. In 1988, the Comptroller put court reporting work products under the sales tax, which brought into question other legal services that had not historically been subject to taxation. PURPOSE This bill exempts from the sales and use tax, court reporting services relating to the preparation of documents or other records for the court, or for a person participating in a suit or administrative hearing, if the documents are sold to a person participating in the suit. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter H, Chapter 151 (Limited Sales, Use and Excise Tax), Tax Code, by adding Section 151.353 COURT REPORTING SERVICES. (a) Exempts court reporting services in preparing documents or records in civil or criminal suits only if prepared for the court in which the suit or administrative proceeding is brought; or, for a person participating in a suit or proceeding, and sold to a person in the suit. (b) The exemption includes services in the preparation of deposition or discovery documents, transcripts of testimony, and statements of facts. (c) The exemption applies to documents or records whether recorded on audio, video, or computer readable format and the courtroom presentation of the same. SECTION 2. (a) Effective Date: First day of the first calendar quarter after the date it may take effect pursuant to the Texas Constitution. (b) The change in law by this Act does not apply to taxes imposed before the effective date. SECTION 3. Emergency Clause. SUMMARY OF COMMITTEE ACTION Public notice was posted in accordance with the rules, and a public hearing was held on April 18, 1995. Representative Wolens explained the bill. By a record vote of 6 ayes, 0 nays, 0 present not voting and 5 absent, the committee voted to report S.B. 737 to the House without amendment with the recommendation that it be sent to the Local & Consent Calendar, and that it do pass. Testimony received in favor of the bill: Dean Cobb, representing the Texas Court Reporters Assn.