BILL ANALYSIS



S.B. 982
By: Truan (Holzheauser)
April 20, 1995
Committee Report (Unamended)


BACKGROUND

Currently, a person purchasing taxable items in Texas for resale in
foreign countries must pay both state and local sales taxes on
those purchases.  Upon securing acceptable documentation proving
that the items have been exported beyond the territorial limits of
the United States and pursuant to the U.S. Constitution, the person
may approach the Texas retailer where the items were purchased and
obtain a refund of sales taxes paid. 

Prior to 1969, Mexican businesses could give a limited number of
resale certificates to Texas businesses.  Currently, resale
certificates are not honored because of the inability to verify
that items were purchased for resale in other countries.  The
Border States Caucus has developed a uniform information exchange
agreement authorizing information exchange with Mexico, allowing
Texas to confirm purchases for resale.

PURPOSE

This bill includes the United Mexican States in certain sales tax
exemptions.

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 Section 151.006 ("Sale for Resale"), Tax Code,
           by expanding the definition of "sale for resale" to
           include the United Mexican States in addition to the
           United States of America or a possession or territory
           of the U.S..

SECTION 2. Amends Section 151.152 (Resale Certificate: Form), Tax
           Code, by adding Subsection (c), to require additional
           information on resale certificates from a person engaged
           in business in the United Mexican States.  In addition
           to the information required in Subsection (b),
           certificates must include the purchaser's United Mexican
           States federal identification number and any other
           information required by the comptroller.

SECTION 3. Amends Section 151.027 (Confidentiality of Tax
           Information), Subsection (c), Tax Code, to allow the
           Comptroller to authorize tax officials of the United
           Mexican States the right to examine confidential sales,
           use and excise tax information.

SECTION 4. Amends Section 111.006 (Confidentiality of Information),
           Tax Code, by amending Subsection (a) and adding
           Subsection (d).

           (a)  Provides that Subsection (d) is an exception to
           this section.

           (d)  Authorizes information made confidential in this
           title (State Taxation) to be examined by a state
           officer, a law enforcement officer of this state, a tax
           official of another state, a tax official of the United
           Mexican States, an official of the United States, or an
           authorized representative of any of these officers or
           officials if: (1) the comptroller authorizes the
           examination, and (2) for an official or officer of
           another state, the United States, or the United Mexican
           States, there exists a reciprocal agreement allowing the
           comptroller to examine tax information in a similar
           manner.

SECTION 5. Effective Date: September 1, 1995.

SECTION 6. 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 Holzheauser
explained the bill.  By a record vote of 9 ayes, 0 nays, 0 present
not voting and 2 absent, the committee voted to report S.B. 982 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:
           Mickey Moore, representing the Texas Retailers Assn.