1-1 By: Ellis S.B. No. 86 1-2 (In the Senate - Filed November 13, 2000; January 10, 2001, 1-3 read first time and referred to Committee on Finance; 1-4 April 24, 2001, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 11, Nays 0; April 24, 2001, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 86 By: Ellis 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to exemptions from the sales tax. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended 1-13 by adding Section 151.327 to read as follows: 1-14 Sec. 151.327. SCHOOL SUPPLIES, TEXTBOOKS, BOOKS, AND OTHER 1-15 INSTRUCTIONAL MATERIALS BEFORE START OF SCHOOL. (a) The sale or 1-16 storage, use, or other consumption of a school supply is exempted 1-17 from the taxes imposed by this chapter if the school supply is 1-18 purchased: 1-19 (1) for use by a student in a class in a public or 1-20 private elementary or secondary school; 1-21 (2) during the period applicable to the exemption for 1-22 clothing and footwear under Section 151.326; and 1-23 (3) for a sales price of less than $75 per item. 1-24 (b) For purposes of this exemption, "school supply" means: 1-25 (1) crayons; 1-26 (2) scissors; 1-27 (3) glue, paste, and glue sticks; 1-28 (4) pencils; 1-29 (5) pens; 1-30 (6) erasers; 1-31 (7) rulers; 1-32 (8) markers; 1-33 (9) highlighters; 1-34 (10) paper, including loose-leaf ruled notebook paper, 1-35 copy paper, graph paper, tracing paper, manila paper, colored 1-36 paper, poster board, and construction paper; 1-37 (11) writing tablets; 1-38 (12) spiral notebooks; 1-39 (13) bound composition notebooks; 1-40 (14) pocket folders; 1-41 (15) plastic folders; 1-42 (16) expandable portfolios; 1-43 (17) manila folders; 1-44 (18) three-ring binders that are three inches or less 1-45 in capacity; 1-46 (19) backpacks and zipper pencil bags; 1-47 (20) school supply boxes; 1-48 (21) clipboards; 1-49 (22) index cards; 1-50 (23) index card boxes; 1-51 (24) calculators; 1-52 (25) protractors; 1-53 (26) compasses; 1-54 (27) music notebooks; 1-55 (28) sketch or drawing pads; 1-56 (29) paintbrushes; 1-57 (30) watercolors; 1-58 (31) acrylic, tempera, or oil paints; 1-59 (32) tape, including masking tape and Scotch tape; 1-60 (33) clay and glazes; 1-61 (34) pencil sharpeners; 1-62 (35) thesauruses; and 1-63 (36) dictionaries. 1-64 (c) A retailer is not required to obtain an exemption 2-1 certificate stating that the school supplies are purchased for use 2-2 by a student in a class in a public or private elementary or 2-3 secondary school unless the supplies are purchased in a quantity 2-4 that indicates that the supplies are not purchased for use by a 2-5 student in a class in a public or private elementary or secondary 2-6 school. 2-7 SECTION 2. Subsection (c), Section 151.326, Tax Code, is 2-8 repealed. 2-9 SECTION 3. Section 151.327, Tax Code, as added by this Act, 2-10 expires August 31, 2003. 2-11 SECTION 4. (a) This Act takes effect on the first day of 2-12 the first calendar quarter beginning on or after the date on which 2-13 it may take effect under Section 39, Article III, Texas 2-14 Constitution. 2-15 (b) The change in law made by this Act does not affect taxes 2-16 imposed before the effective date of this Act, and the law in 2-17 effect before the effective date of this Act is continued in effect 2-18 for purposes of the liability for and collection of those taxes. 2-19 (c) The repeal of Subsection (c), Section 151.326, Tax Code, 2-20 by this Act does not affect the repeal of the exemption under 2-21 Subsection (c), Section 151.326, Tax Code, by the governing body of 2-22 a local taxing authority before the effective date of this Act. 2-23 The repeal of an exemption by a local taxing authority before the 2-24 effective date of this Act is governed by the law in effect on the 2-25 date of the repeal, and that law is continued in effect for that 2-26 purpose. 2-27 * * * * *