By Jackson                                            S.B. No. 1678
         77R7980 DAK-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to exempting certain electronic information services from
 1-3     the sales and use tax.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 151.351, Tax Code, is amended to read as
 1-6     follows:
 1-7           Sec. 151.351.  INFORMATION SERVICES AND DATA PROCESSING
 1-8     SERVICES. Except as provided by Section 151.3511, there [There] is
 1-9     exempted from the taxes imposed by this chapter 20 percent of the
1-10     value of information services and data processing services.
1-11           SECTION 2. Subchapter H, Chapter 151, Tax Code, is amended by
1-12     adding Section 151.3511 to read as follows:
1-13           Sec. 151.3511.  LOCAL ELECTRONIC INFORMATION SERVICES. The
1-14     sale of an information service is exempt from the taxes imposed by
1-15     this chapter if the service:
1-16                 (1)  delivers its information by fax or electronic mail
1-17     over the Internet;
1-18                 (2)  does not contain any advertisements;
1-19                 (3)  is issued not more than once each business day;
1-20                 (4)  costs less than $500 for a yearly subscription or
1-21     an equivalent amount if the subscription is for a period other than
1-22     a year; and
1-23                 (5)  does not have more than 750 subscribers.
1-24           SECTION 3. (a)  This Act takes effect July 1, 2001, if it
 2-1     receives a vote of two-thirds of all the members elected to each
 2-2     house, as provided by Section 39, Article III, Texas Constitution.
 2-3     If this Act does not receive the vote necessary for effect on that
 2-4     date, this Act takes effect October 1, 2001.
 2-5           (b)  The change in law made by this Act does not affect taxes
 2-6     imposed before the effective date of this Act, and the law in
 2-7     effect before the effective date of this Act is continued in effect
 2-8     for purposes of the liability for and collection of those taxes.