LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          March 14, 1995



 TO:     Honorable Tom Craddick, Chair          IN RE:  House Bill No. 596
         Committee on Ways & Means                      By: Duncan
         House of Representatives
         Austin, Texas







FROM: John Keel, Director

In response to your request for a Fiscal Note on House Bill No.
596 (Relating to exempting sales by university and college
student organizations from the state sales tax.) this office has
determined the following:

This bill would amend the sales tax chapter of the Tax Code to
allow qualified university and college student organizations to
make sales of taxable items exempt from the sales tax.  Qualified
student organizations would be allowed one tax-free sale per
month, each sale lasting only one day, for the primary purpose of
raising funds for the organization.

To be qualified to make such tax-free sales, an organization
would have to:

 a)  be affiliated with an institution of higher education as
defined by the Coordinating Board, Texas College and University
System portion of the Education Code, or an accredited private or
independent college or university located in Texas;
 b)  have, as its primary purpose, a purpose other than engaging
in business or an activity designed to make a profit; and,
 c)  file a certification, issued by the institution with which
the organization is affiliated, with the
Comptroller showing proof of affiliation.  The certification
would be valid for two years.

The storage, use, or consumption of a taxable item acquired in a
tax-exempt manner as allowed by this bill would be exempted from
the use tax imposed by the Sales Tax Code until the item is    




resold or subsequently transferred.
 
No significant fiscal implication to the State or units of local
government is anticipated.
    

    







Source:   LBB Staff: JK, SM, DF