SRC-AAA S.B. 1934 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1934
By: Lucio
Finance
5-2-97
As Filed


DIGEST 

Currently, telephone prepaid calling cards are to be taxed on the retail
price. Collection of taxes on prepaid calling cards makes the collection
and audit process difficult for the comptroller. This bill will tax
prepaid calling cards on the retail value at the point of sale to the end
user. 

PURPOSE

As proposed, S.B. 1934 will tax prepaid calling cards on the retail value
at the point of sale to the end user. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 151A, Tax Code, by adding Section 151.0037, as
follows: 

Sec. 151.0037. TELEPHONE PREPAID CALLING CARD. Defines "telephone prepaid
calling card" as a card or other item, including an access code, that
represents the right to make one or more telephone calls for which payment
is made in incremental amounts before the call is initiated. 

SECTION 2. Amends Section 151.009, Tax Code, to redefine "tangible
personal property" as a prepaid calling card, among other items. 

SECTION 3. Amends Section 151.0103, Tax Code, to redefine
"telecommunications services," to provide that the term does not include,
among other items, the sale or use of a telephone prepaid calling card,
which is considered to be a sale or use of tangible personal property.
Makes conforming changes.  

SECTION 4. (a) Effective date: First day of the first calendar quarter
beginning on or after the earliest date that it may take effect under
Section 39, Article III, Texas Constitution. 
  
(b)  Makes application of this Act prospective. 

SECTION 5. Emergency clause.