HBA-JLV H.B. 1098 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 1098 By: Bonnen Ways & Means 7/10/2001 Enrolled BACKGROUND AND PURPOSE Current law requires a seller to add the amount of the sales tax to the sales price of tangible personal property or taxable services but prior to the 77th Legislature, the law was ambiguous concerning tax liability on printed materials distributed by mail. There was a need to clarify provisions attaching tax liability to the purchaser of printed materials. The purchaser, rather than the printer, has access to the information necessary to determine where the printed materials were mailed and is then able to use the information for their tax purposes. House Bill 1098 relates to the collection of taxes on printed materials distributed by mail. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the comptroller of public accounts of the State of Texas in SECTION 3 of this bill. ANALYSIS House Bill 1098 amends the Tax Code to provide that for the purposes of the printer's tax collection duty, the presumption that printed materials that are distributed by the United States Postal Service singly or in sets addressed to individual recipients, other than the purchaser, are either produced at a printer's facility in this state or purchased in this state are for use in Texas and that the printer is required to collect the tax. In order to overcome this presumption, a purchaser of printed materials that are distributed is required to issue an exemption certificate to the printer if the printed materials are for distribution to both in-state and out-of-state recipients. The certificate is required to contain the statement that the printed materials are for multistate use and that the purchaser agrees to pay to this state all taxes that are or may become due to the state on the taxable items purchased under the exemption certificate. The bill provides that "printed materials" is defined to be materials that are produced by web offset or rotogravure printing processes. The bill provides that a printer is relieved of the obligation of collecting the taxes on printed materials, but is required to file a special use tax report for the comptroller. The bill authorizes the comptroller of public accounts of the State of Texas to adopt rules and forms to implement the tax collection on printed materials distributed by mail. EFFECTIVE DATE September 1, 2001.