By: Ogden S.B. No. 341
A BILL TO BE ENTITLED
AN ACT
1-1 relating to taxing the sale, use, or consumption of Internet access
1-2 service.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter A, Chapter 151, Tax Code, is amended
1-5 by adding Sections 151.00393 and 151.00394 to read as follows:
1-6 Sec. 151.00393. "INTERNET." "Internet" means collectively
1-7 the myriad of computer and telecommunications facilities, including
1-8 equipment and operating software, that comprise the interconnected
1-9 worldwide network of networks that employ the Transmission Control
1-10 Protocol/Internet Protocol, or any predecessor or successor
1-11 protocols to that protocol, to communicate information of all kinds
1-12 by wire or radio.
1-13 Sec. 151.00394. "INTERNET ACCESS SERVICE." (a) "Internet
1-14 access service" means a service that enables users to access
1-15 content, information, electronic mail, or other services offered
1-16 over the Internet and may also include access to proprietary
1-17 content, information, and other services as part of a package of
1-18 services offered to consumers.
1-19 (b) "Internet access service" does not include and the
1-20 exemption under Section 151.325 does not apply to any taxable
1-21 service listed in Sections 151.0101(a)(1)-(15), unless the taxable
1-22 service is provided in conjunction with and is merely incidental to
1-23 the provision of Internet access service.
1-24 SECTION 2. Subsection (a), Section 151.0101, Tax Code, is
2-1 amended to read as follows:
2-2 (a) "Taxable services" means:
2-3 (1) amusement services;
2-4 (2) cable television services;
2-5 (3) personal services;
2-6 (4) motor vehicle parking and storage services;
2-7 (5) the repair, remodeling, maintenance, and
2-8 restoration of tangible personal property, except:
2-9 (A) aircraft;
2-10 (B) a ship, boat, or other vessel, other than:
2-11 (i) a taxable boat or motor as defined by
2-12 Section 160.001;
2-13 (ii) a sports fishing boat; or
2-14 (iii) any other vessel used for pleasure;
2-15 (C) the repair, maintenance, and restoration of
2-16 a motor vehicle; and
2-17 (D) the repair, maintenance, creation, and
2-18 restoration of a computer program, including its development and
2-19 modification, not sold by the person performing the repair,
2-20 maintenance, creation, or restoration service;
2-21 (6) telecommunications services;
2-22 (7) credit reporting services;
2-23 (8) debt collection services;
2-24 (9) insurance services;
2-25 (10) information services;
2-26 (11) real property services;
3-1 (12) data processing services;
3-2 (13) real property repair and remodeling;
3-3 (14) security services; [and]
3-4 (15) telephone answering services; and
3-5 (16) Internet access service.
3-6 SECTION 3. Subchapter H, Chapter 151, Tax Code, is amended
3-7 by adding Section 151.325 to read as follows:
3-8 Sec. 151.325. BASIC FEE FOR INTERNET ACCESS SERVICE.
3-9 (a) The sale, use, or other consumption in this state of Internet
3-10 access service is exempted from the taxes imposed by this chapter
3-11 in an amount not to exceed the first $25 of a monthly charge.
3-12 (b) The exemption provided by this section applies without
3-13 regard to:
3-14 (1) whether the Internet access service is bundled
3-15 with another service, including any taxable service listed in
3-16 Sections 151.0101(a)(1)-(15); or
3-17 (2) the billing period used by the service provider.
3-18 (c) The exemption in this section applies to the total sales
3-19 price the service provider charges for Internet access to a
3-20 purchaser, without regard to whether the service provider charges
3-21 one lump-sum amount or separately bills the purchaser for each
3-22 user.
3-23 SECTION 4. (a) This Act takes effect on the first day of
3-24 the first calendar quarter beginning on or after the date that it
3-25 may take effect under Section 39, Article III, Texas Constitution.
3-26 (b) The change in law made by this Act does not affect taxes
4-1 imposed before the effective date of this Act, and the law in
4-2 effect before the effective date of this Act is continued in effect
4-3 for purposes of the liability for and collection of those taxes.
4-4 SECTION 5. The importance of this legislation and the
4-5 crowded condition of the calendars in both houses create an
4-6 emergency and an imperative public necessity that the
4-7 constitutional rule requiring bills to be read on three several
4-8 days in each house be suspended, and this rule is hereby suspended,
4-9 and that this Act take effect and be in force according to its
4-10 terms, and it is so enacted.