SWB S.B. 862 75(R)BILL ANALYSIS
WAYS & MEANS
S.B. 862
By: Armbrister (Holzheauser)
5-13-97
Committee Report (Amended)
BACKGROUND
Each legislative session, the Comptroller of Public Accounts identifies
certain aspects of the Tax Code that contain technical errors, ambiguous
language, or outdated section references, and suggests amendments that
would correct, clarify, or conform existing tax law provisions.
PURPOSE
This bill amends certain language of the Tax Code regarding general
collection and enforcement procedure and the application and
administration of certain taxes. The following areas of tax
administration are affected:
_ Collection Procedures
_ Taxpayer's suits
_ Tax Liens
_ Limited Sales, Excise, and Use Tax
_ Taxation on Sale, Rental, and Use of Motor Vehicles
_ Gas Production Tax
_ Inheritance Taxes
_ Records Storage
_ Tire Recycling Fees
_ Certain Coin Operated Machines
_ Gross Premium Taxes
RULEMAKING AUTHORITY
Rulemaking authority is granted to the Comptroller of Public Accounts in
Section 14 of the bill in order to establish criteria to administer the
section of Tax Code dealing with sales tax exemptions for staff leasing
contracts.
SECTION BY SECTION ANALYSIS
SECTION 1.Amends Section 101.003(b), Tax Code (Definitions), to reenact
the definition of "taxpayer."
SECTION 2.Amends Section 111.0047(a), Tax Code (Suspension and Revocation
of Permit or License), by deleting the provision requiring a person to
comply with any provision of Chapter 466, Government Code. Makes a
conforming change.
SECTION 3.Amends Section 111.0048(a), Tax Code (Reissued or New Permit or
License After Revocation or Suspension), by deleting the provision
requiring a person to comply with any provision of Chapter 466, Government
Code. Makes a conforming change.
SECTION 4.Amends Section 111.006(a), Tax Code (Confidentiality of
Information), by deleting the exception for Subsection (a) as provided by
Subsection (b). Provides that certain matters are confidential except as
permitted by Subsection (e). Makes nonsubstantive changes.
SECTION 5.Amends Section 111.018, Tax Code (Notice of Sale of Seized
Property), by adding Subsection (c), to provide conditions under which
publication in a newspaper for the sale of seized items is not needed.
Sets forth notice requirements.
SECTION 6.Amends Section 111.061(b), Tax Code (Penalty on Delinquent Tax
or Tax Reports), to require an additional penalty of 50 percent of the tax
due to be imposed if certain provisions dealing with fraud and altering
evidence to affect the outcome of proceedings before the comptroller are
met.
SECTION 7.Amends Section 111.206(f), Tax Code (Exception to Limitation:
Determination Resulting From Administrative Proceeding), to define
"administrative proceeding" and make nonsubstantive changes.
SECTION 8.Amends Section 112.060, Tax Code (Credit Refund), by amending
Subsections (a),(b), and (d), and adding Subsection (e), to require the
comptroller, rather than the treasurer, to credit certain amounts due to
the state. Requires a refund warrant to be written and signed by the
comptroller and not countersigned by the treasurer. Requires the
comptroller to issue each tax refund warrant, rather than the treasurer
returning each tax refund warrant to the comptroller. Prohibits the
comptroller from refunding a certain amount of a tax.
SECTION 9.Amends Section 113.006(b), Tax Code (Effect of Filing Tax Lien
Notice), to provide that one tax lien notice is sufficient to cover all
taxes of the same nature, including penalty and interest computed by
reference to the amount of tax, that may have accrued before or after the
filing of the notice.
SECTION 10.Amends Section 151.0035, Tax Code ("Data Processing Service"),
to exclude the transcription of medical dictation by a medical
transcriptionist from the definition of "data processing service."
SECTION 11.Amends Section 151.0047(b), Tax Code ("Real Property Repair and
Remodeling"), to define "new product."
SECTION 12.Amends Section 151.0048(c), Tax Code (Real Property Service),
to redefine "contractor," to include builders, developers, speculative
builders, or other persons acting as a builder to improve residential real
property.
SECTION 13.Amends Section 151.007(c), Tax Code ("Sales Price" or
"Receipts"), to redefine "sales price" and "receipts."
SECTION 14.Amends Section 151.057, Tax Code (Customs Brokers), to provide
that services performed by assigned employees of a staff leasing company
for a client company under a written contract are not taxable. Grants the
comptroller rulemaking authority to establish criteria to implement this
section. Makes a conforming change.
SECTION 15.Amends Section 151.154, Tax Code (Resale Certificate: Liability
of Purchaser), by adding Subsection (f), to provide that certain
purchasers are liable for sales tax on the purchase price if the purchaser
uses the item as a part of the excludable consideration on the purchase of
another taxable item.
SECTION 16.Amends Section 151.310(c), Tax Code (Religious, Educational,
and Public Service Organizations), to authorize certain organizations to
hold auctions under this subsection. Provides that the sale of a taxable
item by a qualified organization with a sale price of $5,000 or less is
exempted from paying sales tax. Provides that certain items stored are
exempted by a use tax imposed under Subchapter D of this chapter if the
item is exempted under this subsection from the taxes imposed by
Subchapter C.
SECTION 17.Amends Section 151.318, Tax Code (Property Used in
Manufacturing), is amended by adding Subsection (r), to set forth the
beginning of manufacturing of computer software.
SECTION 18.Amends Sections 151.321(a) and (c), Tax Code (University and
College Student Organizations), to provide that a taxable item sold by a
qualified student organization and for which the sale price is $5,000 or
less is exempted from Chapter C taxes. Deletes a provision proving that
certification is valid for two years after the date that the comptroller
receives it. Makes nonsubstantive changes.
SECTION 19.Amends Section 151.330(f), Tax Code (Interstate Shipments,
Common Carriers, and Services Across State Lines), to provide that certain
services are exempt to the extent they are for use outside the state and
made taxable on or after September 1, 1987.
SECTION 20.Amends Section 151.353, Tax Code (Court Reporting Services), by
amending Subsection (a) and adding Subsection (d), as follows:
(a) Provides for an exemption for court reporting services relating to
the preparation of a document or other record in a civil or criminal suit
by a court reporter licensed by the State of Texas Court Reporters
Certification Board.
(d) Sets forth exemptions for certain court reporting services by a video
photographer.
SECTION 21.Amends Section 152.001, Tax Code (Definitions), to redefine
"retail sale," "motor vehicle," and "seller-financed sale." Defines
"lessor," "new motor vehicle," and "franchised dealer."
SECTION 22.Amends Section 152.028(a), Tax Code (Use Tax on Motor Vehicle
Brought Back Into State), to provide that a use tax is imposed for a motor
vehicle purchased tax free under Section 152.092, Tax Code.
SECTION 23.Amends Section 152.0411, Tax Code (Collection by Sellers), by
amending Subsections (a) and (e) and adding Subsection (f), to provide
that this section applies to a licensee under Chapter 503, Transportation
Code, rather than Article 6686, V.T.C.S. Establishes that this section
does not apply to the sale of a motor vehicle with a gross weight in
excess of 11,000 pounds. Sellers of such vehicles shall maintain records
in the manner and form, and containing the information required by the
comptroller. Makes a conforming change.
SECTION 24.Amends Section 152.063(e), Tax Code (Records), to delete a
provision that certain sellers keep certain records.
SECTION 25.Amends Sections 152.0635(c), (d), and (e), Tax Code (Records of
Certain Sellers), to delete a provision requiring certain sellers to keep
certain records. Makes a conforming change.
SECTION 26.Amends Section 152.066(d), Tax Code (Deficiency Determination;
Penalty and Interest), to provide that interest begins to accrue on the
day a joint statement, rather than affidavit, was executed.
SECTION 27.Amends Section 152.069(b), Tax Code (Registration of Motor
Vehicle Using Seller-Financing), to make conforming changes.
SECTION 28.Amends Sections 153.017(b) and (g), Tax Code (Cooperative
Agreements With Other States), to authorize an agreement to provide for
determining methods for collecting motor fuel taxes and for collecting and
forwarding motor fuel taxes, other than penalties due to another
jurisdiction. Makes conforming changes.
SECTION 29.Amends Section 153.1195, Tax Code (Refunds and Credits for Bad
Debts), as follows:
Sec. 153.1195. New heading: CREDITS FOR BAD DEBTS. Authorizes a permitted
distributor to take a credit on the monthly report to be filed with the
comptroller, rather than against taxes to be remitted to the comptroller
or claim a refund on taxes paid to the comptroller, if certain provisions
are met. Makes conforming changes.
SECTION 30.Amends Section 153.206(f), Tax Code (Collection and Payment of
Tax; Allowances), to require a supplier, rather than a distributor, to
sell certain products.
SECTION 31.Amends Section 153.2225, Tax Code (Refunds and Credits for Bad
Debts), as follows:
Sec. 153.2225. New heading: CREDITS FOR BAD DEBTS. Authorizes a permitted
distributor to take a credit on the monthly report to be filed with the
comptroller, rather than against taxes to be remitted to the comptroller
or claim a refund on taxes paid to the comptroller, if certain provisions
are met. Makes conforming changes.
SECTION 32.Amends Section 201.057(f), Tax Code (Temporary Exemption or Tax
Reduction for Certain High-Cost Gas), to require drilling and completion
costs include current and contemporaneous costs associated with the
re-completion. Requires an application to the comptroller for
certification according to Subsection (a)(2)(A) to be filed, rather than
may not be filed, after the date of first production or the 45th day after
the date of approval.
SECTION 33.Amends Section 211.102, Tax Code (Day on Which Payment is Due),
to provide an exception provided by Sections 211.103 and 211.104(b), Tax
Code.
SECTION 34.Amends Section 211.104, Tax Code (Report of Determination of
Federal Tax), to set forth requirements for any additional taxes due by a
decedent's estate as a result of an Internal Revenue Service audit or
federal tax court decision.
SECTION 35.Amends Subchapter C, Chapter 211, Tax Code (Inheritance Tax:
Collection and Payment of Tax), by adding Section 211.111, as follows:
Sec. 211.111. LIMITATIONS. Sets forth requirements for a limitations
period.
SECTION 36.Amends Section 211.251, Tax Code (Comptroller's Authority to
Examine Books and Other Property), to authorize the comptroller to examine
certain records of a decedent's estate or of a personal representative,
transferee, or distributee of a decedent's estate at any time, without
regard to the period provided by Section 111.0041, Tax Code.
SECTION 37.Amends Subchapter B, Chapter 403, Government Code (Comptroller
of Public Accounts: General Powers and Duties), by adding Section
403.026, as follows:
Sec. 403.026. ELECTRONIC STORAGE AND MAINTENANCE OF RECORDS. Sets forth
requirements of electronic storage and maintenance of records. Defines
"essential record," "records preservation officer," and "state record."
SECTION 38.Amends Section 2155.004, Government Code (Certain Bids and
Contracts Prohibited), to prohibit a state agency from accepting a bid or
awarding a contract to certain individuals or business entities, except
under certain conditions. Sets forth required language of a bid or an
award. Sets forth procedures for ineligible contracts, false
certification, or the absence of certification of an entity. Makes
conforming changes.
SECTION 39.Amends Section 361.472(a), Health and Safety Code (Waste Tire
Recycling Fees), to provide for certain actions by a person selling new or
used tires.
SECTION 40.Amends Section 16A(2), Article 8817, V.T.C.S. (Regulation of
music and skill or pleasure coin-operated machines), to require an owner
to obtain a registration certificate by filing an application in the form
prescribed by the comptroller.
SECTION 41.Amends Article 1.28(2), Insurance Code (Out-of-State Books,
Records, Accounts, and Offices), to prohibit a credit or offset in a
taxable year from being allowed on certain expenses. Provides that this
article prevails over Article 9.59.
SECTION 42.Amends Article 4.17(a), Insurance Code (Maintenance Tax on
Gross Premiums), to set forth the components of gross premiums.
SECTION 43.Amends Article 20A.32(b)(4), Insurance Code (Fees), to prohibit
certain credits from being allowed on certain expenses.
SECTION 44.Amends Article 20A.33(d), Insurance Code (Taxation), to set
forth the amount of maintenance tax assessed.
SECTION 45.Repealer: Sections 111.0022 and 112.002, Tax Code (Application
To Other Laws Administered By Comptroller, and Inclusion Of Penalty And
Interest, respectively).
SECTION 46.Effective date: September 1, 1997.
Effective date of Sections 10-31 of this Act: October 1, 1997.
SECTION 47.Emergency clause.
EXPLANATION OF AMENDMENTS
_Committee Amendment Number One adds Sections 39 through 43 to the bill
and renumbers subsequent sections accordingly as follows:
SECTION 39. Amends Sections 403.302(a) through (d), Government Code
(Determination of School District Property Values), as follows:
(a) Requires the comptroller to determine the total taxable value of all
property in each district.
(b) Strikes language requiring the comptroller to review appraisal
standards, procedures and methods to determine taxable value of property
in each school district and sets forth the manner in which the taxable
value of property in each school district shall be determined: 1) using
samples selected through generally acceptable sampling techniques, if
appropriate; 2) according to generally accepted standard valuation,
statistical compilation, and analysis techniques.
(c) Provides that if the comptroller determines that the market value of
property in a school district as determined by the appraisal district,
less the total of the amounts listed in Subsection (d) as determined by
the appraisal district, is valid, the market value of property in the
school district as determined by the appraisal district, less the total of
the amounts listed in Subsection (d) as determined by the appraisal
district is presumed to represent taxable value. Provides that in the
absence of such a presumption, the taxable value is the value determined
by the comptroller under Subsection (a).
(d) Defines "taxable value" for the purposes of this section.
SECTION 40. Amends Section 403.303(a), Government Code, (Protest), to
increase the amount of time a school district has to appeal the property
value study from 30 days to 40 days.
SECTION 41. Amends Section 5.102, Tax Code (Noncompliance by Appraisal
District), to change the title to "REVIEW OF APPRAISAL STANDARDS".
(a) Provides that the comptroller shall review the appraisal standards,
procedures, and methodology used by each appraisal district to determine
compliance with generally accepted appraisal standards and practices.
(b) Deletes references to studies and inserts the word "review". Makes
nonsubstantive changes.
(c) Deletes references to studies and inserts the word "review". Makes
nonsubstantive changes.
SECTION 42. Amends Section 5.16, Tax Code (Administrative Provisions),
to allow the comptroller to inspect records for the purpose of conducting
a survey, audit or review required by Section 5.10, Tax Code (Ratio
Studies), Section 5.102, Tax Code (Noncompliance by Appraisal District),
or Section 403.302, Government Code (Determination of School District
Property Values). Makes nonsubstantive changes.
SECTION 43. Amends Section 26.01(b), Tax Code (Submission of Rolls to
Taxing Units), to clarify that the chief appraiser shall certify the
appraisal district appraisal roll. Provides that the chief appraiser
shall certify the district appraisal roll or its summary in the event the
comptroller provides a summary.
_Committee Amendment Number Two provides that a notary public who provides
court reporting services fall under the court reporting services
exemption.
_Committee Amendment Number Three is a technical amendment to restore
Section 112.002, Tax Code (Inclusion of Penalty and Interest), which was
repealed in the bill.