JWB H.B. 2157 75(R)BILL ANALYSIS WAYS & MEANS H.B. 2157 By: Williamson 4-18-97 Committee Report (Unamended) BACKGROUND Chapter 151, Tax Code (Limited Sales, Excise and Use Tax), imposes a tax on amusement services. The tax is routinely collected at the time of the original sale of tickets to an amusement service and the ticket seller then reports and remits the tax to the Comptroller of Public Accounts. In some cases event tickets are repurchased and resold. Problems arise because current law makes no provision for the transfer of the credit for the sales tax paid by the original purchaser of the ticket to a reseller. PURPOSE The bill would establish a mechanism to credit a re-seller the sales tax already paid on the original purchase of an event ticket. 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 I, Chapter 151, Tax Code (Reports, Payments, and Methods of Reporting), by adding Section 151.432. DEDUCTIONS OF TAX ON TICKET OR ADMISSION DOCUMENT TO AMUSEMENT SERVICE. (a) Provides that a reseller of a ticket or admission document to an amusement service may deduct from taxable sales reported the adjusted value of the ticket or admission document purchased for resale from a non-permitted purchaser of the ticket of admission document if: 1) the taxes imposed by this chapter were paid by the purchaser and the purchaser does not hold a permit issued under this chapter; 2) language on the ticket or admission document purchased for resale states that all taxes have been included in the price of the ticket or admission document; 3) the ticket or admission document for which a deduction is claimed was not purchased tax-free by use of a resale or exemption certificate; and 4) the ticket or admission document is actually resold. (b) Provides that the re-seller's books and records must be kept in accordance with Section 151.025, Tax Code (Records Required to be Kept), and must: 1) identify the non-permitted purchaser; 2) document the face value of any ticket or admission document purchased by a non-permitted purchaser; 3) document that sales tax was included in a ticket or admission document purchased by a non- permitted purchaser; 4) document the sale of the ticket or admission document; 5) account for any remaining inventory of unsold tickets or admission documents. (c) Provides that the re-seller may satisfy Subsection (b)(3) by retaining a reproduction of a ticket or admission document to the amusement service. (d) Defines "adjusted value of a ticket or admission document" as the face value of the ticket or admission document, less the included state or local sales or use taxes. SECTION 2.Effective date: October 1, 1997.