LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session March 14, 1995 TO: Honorable Senator John T. Montford, IN RE: Senate Bill No. 982 Chair By: Truan Committee on Finance Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on Senate Bill No. 982 (Relating to the relationship of governmental entities outside this state, particularly the United Mexican States, to state tax provisions.) this office has determined the following: This bill would amend the Sales Tax portion of the Tax Code to include in the definition of a "sale for resale" the acquisition of tangible personal property or taxable services by a purchaser for resale in the United Mexican States. The term "sale for resale" would also be made to include the acquisition of tangible personal property for lease or rental in the United Mexican States, as well as tangible personal property purchased for the purpose of transferring that property in the United Mexican States as an integral part of a taxable service. 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. No significant fiscal implication to the State or units of local government is anticipated. Source: LBB Staff: JK, SM, DF