By Miller H.B. No. 3156
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the exemption from sales and use tax of certain items
1-3 sold during the tax holiday period in August of each year.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 151.326, Tax Code, is amended to read as
1-6 follows:
1-7 Sec. 151.326. CERTAIN ITEMS SOLD DURING TAX HOLIDAY
1-8 [CLOTHING AND FOOTWEAR FOR LIMITED] PERIOD. (a) The sale of a
1-9 backpack, an article of clothing or footwear, or a sewing notion
1-10 [designed to be worn on or about the human body] is exempted from
1-11 the taxes imposed by this chapter if:
1-12 (1) the sales price of the item [article] is less than
1-13 $100; and
1-14 (2) the sale occurs [takes place] during [a] the tax
1-15 holiday period [beginning at 12:01 a.m. on the first Friday in
1-16 August and ending at 12 midnight on the following Sunday].
1-17 (b) The sale of a car safety seat for a child, a bicycle
1-18 helmet, elbow pads, or knee pads during the tax holiday period is
1-19 exempted from the taxes imposed by this chapter [This section does
1-20 not apply to:]
1-21 [(1) any special clothing or footwear that is
1-22 primarily designed for athletic activity or protective use and that
1-23 is not normally worn except when used for the athletic activity or
2-1 protective use for which it is designed;]
2-2 [(2) accessories, including jewelry, handbags,
2-3 luggage, umbrellas, wallets, watches, and similar items carried on
2-4 or about the human body, without regard to whether worn on the body
2-5 in a manner characteristic of clothing; and]
2-6 [(3) the rental of clothing or footwear].
2-7 (c) The sale of a school supply is exempted from the taxes
2-8 imposed by this chapter if:
2-9 (1) the supply is purchased for use by a student in a
2-10 class in a public or private elementary or secondary school;
2-11 (2) the sale occurs during the tax holiday period; and
2-12 (3) the sales price of the supply is less than $25.
2-13 If supplies are packaged by the retailer and sold as a unit, then
2-14 the sales price for the unit is exempt provided that each
2-15 individual supply in the unit would qualify for the exemption if it
2-16 was sold separately.
2-17 (d) [(c)] The [On or after January 1, 2000, the] governing
2-18 body of a local taxing authority may repeal the application of the
2-19 [this] exemptions [exemption] provided in subsections (a), (b), and
2-20 (c) only if:
2-21 (1) the repeal is done in the manner provided by
2-22 Chapter 326; and
2-23 (2) the body simultaneously repeals the application of
2-24 all of the exemptions provided in this section.
2-25 (e) A retailer is not required to obtain an exemption
2-26 certificate stating that school supplies are purchased for use by a
3-1 student in a class in a public or private elementary or secondary
3-2 school unless the supplies are purchased in a quantity indicating
3-3 that they are not purchased for that use.
3-4 (f) In this section:
3-5 (1) "Accessory" includes a jewelry item, a handbag,
3-6 luggage, an umbrella, a wallet, a watch, and any similar item
3-7 carried on or about the human body, regardless of whether worn on
3-8 the body in a manner characteristic of clothing.
3-9 (2) "Clothing" means clothing designed to be worn on
3-10 or about the human body, excluding any special clothing or footwear
3-11 that is primarily designed for athletic activity or protective use
3-12 and that is not normally worn except when used for the athletic
3-13 activity or protective use for which it is designed. The term does
3-14 not include an accessory.
3-15 (3) "Footwear" means footwear designed to be worn on
3-16 or about the human body. The term does not include an accessory.
3-17 (4) "Sale" does not include a rental.
3-18 (5) "School supply" means:
3-19 (A) a pencil, pen, crayon, marker, highlighter,
3-20 eraser, pencil bag, or pencil sharpener;
3-21 (B) scissors;
3-22 (C) a ruler, protractor, or compass;
3-23 (D) a writing tablet, spiral notebook, bound
3-24 composition notebook, or music notebook;
3-25 (E) paper, including loose-leaf ruled notebook
3-26 paper, graph paper, tracing paper, manila paper, colored paper,
4-1 poster board, and construction paper;
4-2 (F) a clipboard;
4-3 (G) a container designed to hold school
4-4 supplies;
4-5 (H) an index card or a container designed to
4-6 hold index cards;
4-7 (I) a sketch or drawing pad;
4-8 (J) a folder, except for a file folder;
4-9 (K) an expandable portfolio;
4-10 (L) a multi-ring binder having a capacity of not
4-11 more than three inches;
4-12 (M) a divider designed for use in a multi-ring
4-13 binder;
4-14 (N) adhesive tape, including masking tape and
4-15 transparent tape;
4-16 (O) glue, paste, or a glue stick;
4-17 (P) watercolors or an acrylic, tempera, or oil
4-18 paint;
4-19 (Q) a paint brush;
4-20 (R) clay or a glaze;
4-21 (S) a calculator; or
4-22 (T) a thesaurus or dictionary.
4-23 (6) "Sewing notion" includes:
4-24 (A) fabric, thread, interfacing, or elastic;
4-25 (B) a button, zipper, or snap;
4-26 (C) a pattern for making clothing; and
5-1 (D) any other item that becomes part of
5-2 clothing.
5-3 (7) "Tax holiday period" means the period beginning at
5-4 12:01 a.m. on the first Wednesday in August and ending at 11:59
5-5 p.m. on the first Sunday after the first Wednesday in August.
5-6 (g) Notwithstanding Section 151.704, during the tax holiday,
5-7 a retailer may advertise that the retailer will pay the tax or a
5-8 portion of the tax. A retailer who advertises that it will pay the
5-9 tax shall remit the full amount of the tax due on the sales price
5-10 of the item sold. A person purchasing, storing, using or consuming
5-11 a taxable item in this state is liable for the tax imposed by this
5-12 chapter unless the receipt from the retailer specifically states
5-13 that the retailer is legally responsible for the tax due on the
5-14 sales price and the receipt clearly shows that the item was sold
5-15 during the tax holiday.
5-16 SECTION 2. (a) The comptroller may adopt an emergency rule
5-17 without prior notice or hearing, or with any abbreviated notice and
5-18 hearing that the comptroller finds practicable, for the
5-19 implementation of the change in law made by this Act.
5-20 (b) The comptroller may adopt an emergency rule under
5-21 Subsection (a) of this section without finding that an imminent
5-22 peril to the public health, safety, or welfare requires adoption of
5-23 a rule on fewer than 30 days' notice.
5-24 (c) If the comptroller adopts an emergency rule under
5-25 Subsection (a) of this section, this section is considered to be a
5-26 requirement of state law for adoption of a rule on fewer than 30
6-1 days' notice, for purposes of Section 2001.034(a)(1), Government
6-2 Code.
6-3 SECTION 3. The change in law made by this Act does not
6-4 affect taxes imposed before the effective date of this Act, and the
6-5 law in effect before the effective date of this Act is continued in
6-6 effect for purposes of the liability for and collection of those
6-7 taxes.
6-8 SECTION 4. This Act takes effect immediately if it receives
6-9 a vote of two-thirds of all the members elected to each house, as
6-10 provided by Section 39, Article III, Texas Constitution. If this
6-11 Act does not receive the vote necessary for immediate effect, this
6-12 Act takes effect September 1, 2001.
6-13 SECTION 5. The constitutional rule requiring bills to be
6-14 read on three several days in each house is hereby suspended.