LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              April 18, 2001
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB2990  by Gutierrez (Relating to refunds of sales and
               use tax paid on tangible personal property that is
               exported beyond the territorial limits of the United
               States.), As Introduced
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill would amend Chapter 151 of the Tax Code, relating to the refund
of sales and use tax paid on certain property exported out of the
country.

The bill would alter the types of documentation deemed acceptable for
proof of export for purposes of an exemption from sales tax for items
exported from the U.S.  The documentation provided by a U.S. Customs
Broker would have to:  1) certify that delivery was made outside the
territorial limits of the United States, 2) have the proper stamp affixed
to it, and 3) be accompanied by import documents from the country of
destination.  A purchaser with documentation provided by a customs broker
and import documents from the country of destination could recover sales
and use taxes paid to a retailer on the purchase of tangible personal
property that was exported beyond the territorial limits of the United
States.  To recover any taxes paid, the purchaser would have to submit to
the retailer the purchaser's receipt, documentation provided by the
customs broker, and the import documents.

As a result, the bill would increase the documentation necessary, in
cases where such documentation is provided by a U.S. Customs Broker, for
a purchaser to recover sales and uses taxes for tangible personal
property exported beyond the territorial limits of the United States.
The proposed system of verification could therefore limit the number of
non-legitimate refunds.  Note:  It is estimated that approximately $60
million in state and local sales and use taxes is refunded annually to
consumers for tangible personal property legitimately exported from Texas
to Mexico.

The bill would take effect September 1, 2001. 
  
Local Government Impact
  
No significant fiscal implication to units of local government is
anticipated.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, SD, WP, SM