SRC-DBM S.B. 441 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 441
76R5684  DAK-DBy: Ellis
Finance
2/22/1999
As Filed


DIGEST 

Currently, Texas' sales tax, when combined with local tax, is among the
highest in the nation.  By eliminating the sales tax on certain necessary
items, Texas can lessen the regressiveness of its sales tax. S.B. 441 would
exempt medicine, diapers, medical or therapeutic appliances, devices, and
any related supplies, and Internet access.  S.B. 441 also would exempt
taxes on articles of clothing or footwear worn by a person younger than 13
years of age up to $500. 
 
PURPOSE

As proposed, S.B. 441 provides information concerning exemptions from the
sales tax. 

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 Section 151.313(a), Tax Code, to exempt from taxes a
drug or medicine, rather than insulin, a diaper, and a medical or
therapeutic appliance, device, and any related supplies specifically
designed for those products, other than a contraceptive unless the
contraceptive is dispensed or prescribed by a licensed practitioner, rather
than when those items are purchased and used by an individual for whom the
items listed in this subdivision were dispensed or prescribed.  Makes
conforming changes. 

SECTION 2.  Amends Section 151.323, Tax Code, to exempt access to the
Internet from taxes.  Defines "Internet."  Makes a conforming change. 

SECTION 3.  Amends Chapter 151H, Tax Code, by adding Section 151.325, as
follows: 

Sec. 151.325.  CLOTHING FOR CHILDREN PRIOR TO START OF SCHOOL.  Exempts
from taxes the clothing sales occurring during August of clothing or
footwear costing  less than $500 to be worn by a person younger than 13
years of age.  Sets forth items not covered by this tax exemption. 

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

SECTION 5.Emergency clause.