LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              March 23, 2001
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB1098  by Bonnen (Relating to the collection of taxes on
               printed materials distributed by mail.), Committee Report
               1st House, Substituted
  
**************************************************************************
*  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