76R11722 DAK-D
By Dutton H.B. No. 2280
Substitute the following for H.B. No. 2280:
By Oliveira C.S.H.B. No. 2280
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a sales tax exemption for clothing and footwear.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended
1-5 by adding Section 151.325 to read as follows:
1-6 Sec. 151.325. CLOTHING AND FOOTWEAR FOR LIMITED PERIOD. (a)
1-7 The sale of an article of clothing or footwear designed to be worn
1-8 on or about the human body is exempted from the taxes imposed by
1-9 this chapter if:
1-10 (1) the sales price of the article is less than $75;
1-11 and
1-12 (2) the sale takes place during a period beginning at
1-13 12:01 a.m. on the first Saturday in August and ending at 12
1-14 midnight on the second Sunday after the first Saturday in August.
1-15 (b) This section does not apply to:
1-16 (1) any special clothing or footwear that is primarily
1-17 designed for athletic activity or protective use and that is not
1-18 normally worn except when used for the athletic activity or
1-19 protective use for which it is designed;
1-20 (2) accessories, including jewelry, handbags, luggage,
1-21 umbrellas, wallets, watches, and similar items carried on or about
1-22 the human body, without regard to whether worn on the body in a
1-23 manner characteristic of clothing; and
1-24 (3) the rental of clothing or footwear.
2-1 (c) On or after January 1, 2000, the governing body of a
2-2 local taxing authority may repeal the application of this exemption
2-3 in the manner provided by Chapter 326.
2-4 SECTION 2. Section 151.3111(b), Tax Code, is amended to read
2-5 as follows:
2-6 (b) Subsection (a) of this section does not apply to the
2-7 performance of a service on:
2-8 (1) tangible personal property that would be exempted
2-9 solely because of the exempt status of the seller of the property;
2-10 (2) tangible personal property that is exempted solely
2-11 because of the application of Section 151.303, 151.304, or 151.306
2-12 of this code;
2-13 (3) motor vehicles, trailers, or semitrailers as
2-14 defined, taxed, or exempted by Chapter 152 of this code;
2-15 (4) a taxable boat or motor as defined by Section
2-16 160.001; [or]
2-17 (5) machinery and equipment with a purchase price
2-18 greater than $50,000 used exclusively in a commercial timber
2-19 operation as described by Section 151.3161(a); or
2-20 (6) tangible personal property exempt under Section
2-21 151.325.
2-22 SECTION 3. Subtitle C, Title 3, Tax Code, is amended by
2-23 adding Chapter 326 to read as follows:
2-24 CHAPTER 326. STATE SALES AND USE TAX EXEMPTIONS IN RELATION
2-25 TO LOCAL SALES AND USE TAXES
2-26 Sec. 326.001. APPLICABILITY. This chapter applies to local
2-27 sales and use taxes administered and computed under this subtitle
3-1 and to which this subtitle applies, including a tax imposed under:
3-2 (1) Chapter 285, 775, or 776, Health and Safety Code;
3-3 (2) Chapter 326, 334, 363, 377, or 383, Local
3-4 Government Code;
3-5 (3) Chapter 451, 452, 453, or 457, Transportation
3-6 Code; or
3-7 (4) the Development Corporation Act of 1979 (Article
3-8 5190.6, Vernon's Texas Civil Statutes).
3-9 Sec. 326.002. STATE EXEMPTIONS. Notwithstanding any other
3-10 law, an exemption to the state sales and use tax provided by
3-11 Chapter 151 does not apply to a local sales and use tax to which
3-12 this chapter applies if:
3-13 (1) the governing body of the local taxing authority
3-14 repeals the exemption in the manner provided by Section 326.003;
3-15 and
3-16 (2) the exemption provided by Chapter 151 specifically
3-17 provides that the governing body of the local taxing authority may
3-18 repeal the exemption in the manner provided by this chapter.
3-19 Sec. 326.003. REPEAL BY LOCAL TAXING AUTHORITY. (a) The
3-20 governing body of a taxing authority may by a majority vote adopt
3-21 an appropriate order, including an ordinance, to repeal the
3-22 application of an exemption described by Section 326.002.
3-23 (b) The governing body must hold a public hearing before
3-24 taking a vote.
3-25 (c) A taxing authority that has repealed the application of
3-26 an exemption under this section may in the same manner reinstate
3-27 the exemption.
4-1 (d) A vote of the governing body of a taxing authority
4-2 repealing the application or reinstating the exemption must be
4-3 entered in the minutes for the meeting. The secretary of the
4-4 taxing authority shall send to the comptroller by certified or
4-5 registered mail a copy of the order adopted under this section.
4-6 Sec. 326.004. EFFECTIVE DATE. The repeal of the application
4-7 of the exemption or a reinstated exemption under Section 326.003
4-8 takes effect within the taxing authority on the first day of the
4-9 first calendar quarter occurring after the expiration of the first
4-10 complete calendar quarter occurring after the date on which the
4-11 comptroller receives a copy of the order adopted under that
4-12 section.
4-13 SECTION 4. The comptroller may adopt emergency rules for the
4-14 implementation of this Act.
4-15 SECTION 5. (a) This Act takes effect on the first day of
4-16 the first calendar quarter beginning on or after the date that it
4-17 may take effect under Section 39, Article III, Texas Constitution.
4-18 (b) The change in law made by this Act does not affect taxes
4-19 imposed before the effective date of this Act, and the law in
4-20 effect before the effective date of this Act is continued in effect
4-21 for purposes of the liability for and collection of those taxes.
4-22 SECTION 6. The importance of this legislation and the
4-23 crowded condition of the calendars in both houses create an
4-24 emergency and an imperative public necessity that the
4-25 constitutional rule requiring bills to be read on three several
4-26 days in each house be suspended, and this rule is hereby suspended,
4-27 and that this Act take effect and be in force according to its
5-1 terms, and it is so enacted.