LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 24, 2001 TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance FROM: John Keel, Director, Legislative Budget Board IN RE: HB1098 by Bonnen (Relating to the collection of taxes on printed materials distributed by mail.), As Engrossed ************************************************************************** * No fiscal implication to the State is anticipated. * ************************************************************************** The bill would amend Chapter 151 of the Tax Code to state that, for the purposes of a printer's tax collection duty, it would be presumed that printed materials distributed via the United States Postal Service singly or in sets addressed to individual recipients, other than the purchaser, that 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 must collect the state sales and use tax. To overcome this presumption, the purchaser would have to issue an exemption certificate to the printer if the printed materials were for distribution to in-state as well as out-of-state recipients. The certificate would have to contain the statement that the printed materials were for multistate use and that the purchaser agreed to pay the taxes due. A printer would be relieved of the obligation of collecting sales and use tax on printed materials distributed via the United States Postal Service singly or in sets addressed to individual recipients, other than the purchaser. In such cases, however, the printer would have to file a report as provided under Section 151.407. The bill would specify the obligations of certain printers concerning the collection of state sales and use tax on printed materials. The bill would provide for the required issuance of an exemption certificate under specific circumstances, thereby providing an effective audit mechanism for tax administration. The bill would take effect July 1, 2001, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2001. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 304 Comptroller of Public Accounts LBB Staff: JK, SD, SM