|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the exemption from sales and use taxes, including the |
|
motor vehicle sales and use tax, for timber and certain items used |
|
on a farm, ranch, or timber operation. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Subchapter E, Chapter 151, Tax Code, is amended |
|
by adding Section 151.1551 to read as follows: |
|
Sec. 151.1551. EXEMPTION NUMBER REQUIRED FOR TIMBER ITEMS |
|
AND CERTAIN AGRICULTURAL PROPERTY. (a) To qualify for an exemption |
|
for an item under Section 151.316(a)(3), (6), (7), (10), or (12) or |
|
an item or tangible personal property under Section 151.316(b) or |
|
151.3162(b), an exemption number must be stated on the exemption |
|
certificate provided by the purchaser. |
|
(b) A person is eligible for an exemption number if the |
|
person uses or intends to use an item or property listed under |
|
Subsection (a) that qualifies for an exemption under Section |
|
151.316 on a farm or ranch, as those terms are defined by Section |
|
151.316(c), or that qualifies for an exemption under Section |
|
151.3162 on a timber operation. |
|
(c) A person who is eligible may apply to the comptroller |
|
for an exemption number. The application must: |
|
(1) be on a form prescribed by the comptroller; |
|
(2) if applicable, state the types of crops, |
|
livestock, or other agricultural products that are produced for |
|
sale on the farm or ranch on which the applicant will use or employ |
|
the item or property listed under Subsection (a) or state that the |
|
item or property will be used in relation to a timber operation; |
|
(3) if applicable, state the name and address of the |
|
business owned or operated or to be owned or operated by the |
|
applicant in relation to which the applicant will use the exempt |
|
item or property; and |
|
(4) contain any other information required by the |
|
comptroller. |
|
(d) The comptroller by rule shall develop and implement a |
|
procedure by which an applicant may submit an application described |
|
by Subsection (c) electronically. |
|
(e) The comptroller by rule shall establish a uniform date |
|
on which all exemption numbers issued under this section must be |
|
renewed, regardless of the date on which an exemption number is |
|
initially issued. The rules must require exemption numbers to be |
|
renewed every four years. |
|
(f) The comptroller may not issue an exemption number that |
|
contains an individual's social security number. |
|
(g) The comptroller, after adequate written notice and a |
|
hearing, may suspend or revoke the exemption number issued to a |
|
person who fails to comply with this chapter or with a rule adopted |
|
under this chapter. At the hearing the person must show cause why |
|
the person's exemption number should not be suspended or revoked. |
|
(h) The comptroller shall give written notice of the |
|
suspension or revocation of an exemption number under Subsection |
|
(g) to the person to whom the number was issued. The notice may be |
|
personally served on the person or sent by mail to the person's |
|
address as shown in the comptroller's records. |
|
(i) If the comptroller revokes a person's exemption number |
|
under Subsection (g), the person may not be issued a new exemption |
|
number unless the comptroller is satisfied that the person will |
|
comply with this chapter and the rules adopted under this chapter. |
|
The comptroller may prescribe the terms under which a suspended |
|
exemption number may be reinstated. |
|
(j) A taxpayer may appeal the suspension or revocation of an |
|
exemption number in the same manner that appeals are made from a |
|
final deficiency determination. |
|
(k) The comptroller by rule shall develop and operate an |
|
online system to enable a seller of an item or property described by |
|
Subsection (a) to search and verify the validity of the exemption |
|
number stated on an exemption certificate. A seller is not required |
|
to use the online system. |
|
(l) An exemption certificate that states an exemption |
|
number is sufficient documentation of the seller's receipt of the |
|
certificate in good faith for purposes of Sections 151.054 and |
|
151.104. |
|
SECTION 2. Section 151.316(a), Tax Code, as amended by |
|
Chapters 1162 (H.B. 3144) and 1373 (S.B. 958), Acts of the 81st |
|
Legislature, Regular Session, 2009, is reenacted and amended to |
|
read as follows: |
|
(a) Subject to Section 151.1551, the [The] following items |
|
are exempted from the taxes imposed by this chapter: |
|
(1) horses, mules, and work animals; |
|
(2) animal life the products of which ordinarily |
|
constitute food for human consumption; |
|
(3) feed for farm and ranch animals; |
|
(4) feed for animals that are held for sale in the |
|
regular course of business; |
|
(5) seeds and annual plants the products of which: |
|
(A) ordinarily constitute food for human |
|
consumption; |
|
(B) are to be sold in the regular course of |
|
business; or |
|
(C) are used to produce feed for animals exempted |
|
by this section; |
|
(6) fertilizers, fungicides, insecticides, |
|
herbicides, defoliants, and desiccants exclusively used or |
|
employed on a farm or ranch in the production of: |
|
(A) food for human consumption; |
|
(B) feed for animal life; or |
|
(C) other agricultural products to be sold in the |
|
regular course of business; |
|
(7) machinery and equipment exclusively used or |
|
employed on a farm or ranch in the building or maintaining of roads |
|
or water facilities or in the production of: |
|
(A) food for human consumption; |
|
(B) grass; |
|
(C) feed for animal life; or |
|
(D) other agricultural products to be sold in the |
|
regular course of business; |
|
(8) machinery and equipment exclusively used in, and |
|
pollution control equipment required as a result of, the |
|
processing, packing, or marketing of agricultural products by an |
|
original producer at a location operated by the original producer |
|
for processing, packing, or marketing the producer's own products |
|
if: |
|
(A) 50 percent or more of the products processed, |
|
packed, or marketed at or from the location are produced by the |
|
original producer and not purchased or acquired from others; and |
|
(B) the producer does not process, pack, or |
|
market for consideration any agricultural products that belong to |
|
other persons in an amount greater than five percent of the total |
|
agricultural products processed, packed, or marketed by the |
|
producer; |
|
(9) ice exclusively used by commercial fishing boats |
|
in the storing of aquatic species including but not limited to |
|
shrimp, other crustaceans, finfish, mollusks, and other similar |
|
creatures; |
|
(10) tangible personal property, including a tire, |
|
sold or used to be installed as a component part of a motor vehicle, |
|
machinery, or other equipment exclusively used or employed on a |
|
farm or ranch in the building or maintaining of roads or water |
|
facilities or in the production of: |
|
(A) food for human consumption; |
|
(B) grass; |
|
(C) feed for animal life; or |
|
(D) other agricultural products to be sold in the |
|
regular course of business; |
|
(11) machinery and equipment exclusively used in an |
|
agricultural aircraft operation, as defined by 14 C.F.R. Section |
|
137.3; and |
|
(12) tangible personal property incorporated into a |
|
structure that is used for the disposal of poultry carcasses in |
|
accordance with Section 26.303, Water Code. |
|
SECTION 3. Section 151.316(b), Tax Code, is amended to read |
|
as follows: |
|
(b) Subject to Section 151.1551, tangible [Tangible] |
|
personal property sold or used to be installed as a component of an |
|
underground irrigation system is exempt from the taxes imposed by |
|
this chapter if the system is exclusively used or employed on a farm |
|
or ranch in the production of: |
|
(1) food for human consumption; |
|
(2) grass; |
|
(3) feed or forage for: |
|
(A) animal life the products of which ordinarily |
|
constitute food for human consumption; or |
|
(B) horses, mules, and work animals; or |
|
(4) other agricultural products to be sold in the |
|
regular course of business. |
|
SECTION 4. Section 151.3162(b), Tax Code, is amended to |
|
read as follows: |
|
(b) Subject to Section 151.1551, the [The] following items |
|
are exempted from the tax imposed by this chapter: |
|
(1) seedlings of trees grown for commercial timber; |
|
(2) defoliants, desiccants, equipment, fertilizers, |
|
fungicides, herbicides, insecticides, and machinery exclusively |
|
used in the production of timber to be sold in the regular course of |
|
business; |
|
(3) machinery and equipment used in, and pollution |
|
control equipment required as a result of, the processing, packing, |
|
or marketing of timber products by an original producer if: |
|
(A) the processing, packing, or marketing occurs |
|
at or from a location operated by the original producer; |
|
(B) at least 50 percent of the value of the timber |
|
products processed, packed, or marketed at or from the location is |
|
attributable to products produced by the original producer and not |
|
purchased or acquired from others; and |
|
(C) the original producer does not process, pack, |
|
or market for consideration timber products that belong to another |
|
person with a value greater than five percent of the total value of |
|
the timber products processed, packed, or marketed by the producer; |
|
and |
|
(4) tangible personal property sold or used to be |
|
installed as a component of an underground irrigation system |
|
exclusively used in the production of timber to be sold in the |
|
regular course of business. |
|
SECTION 5. Section 152.091, Tax Code, is amended by adding |
|
Subsection (a-1) and amending Subsections (b) and (c) to read as |
|
follows: |
|
(a-1) In addition to the other requirements prescribed by |
|
this section, the exemption provided by Subsection (a) applies only |
|
if the person purchasing or using the machine, trailer, or |
|
semitrailer provides an exemption certificate with an exemption |
|
number issued to the purchaser or user under Section 151.1551. |
|
(b)(1) The taxes imposed by this chapter do not apply to the |
|
purchase of a: |
|
(A) farm machine, trailer, or semitrailer that is |
|
to be leased for use primarily for farming and ranching, including |
|
the rearing of poultry, and use in feedlots; or |
|
(B) machine, trailer, or semitrailer that is to |
|
be leased for use primarily for timber operations. |
|
(2) The exemption provided by this subsection applies |
|
only if the person purchasing the machine, trailer, or semitrailer |
|
to be leased presents the tax assessor-collector a form prescribed |
|
and provided by the comptroller showing: |
|
(A) the identification of the motor vehicle; |
|
(B) the name and address of the lessor and the |
|
lessee; [and] |
|
(C) an exemption number issued to the purchaser |
|
under Section 151.1551; and |
|
(D) verification by the lessee that the machine, |
|
trailer, or semitrailer will be used primarily for: |
|
(i) farming and ranching, including the |
|
rearing of poultry, and use in feedlots; or |
|
(ii) timber operations. |
|
(3) If a motor vehicle for which the tax has not been |
|
paid ceases to be leased for use primarily for farming and ranching, |
|
including the rearing of poultry, and use in feedlots or timber |
|
operations, the owner shall notify the comptroller on a form |
|
provided by the comptroller and shall pay the sales or use tax on |
|
the motor vehicle based on the owner's book value of the motor |
|
vehicle. The tax is imposed at the same percentage rate that is |
|
provided by Section 152.021(b). |
|
(c) The taxes imposed by this chapter do not apply to the |
|
rental of a farm machine, a trailer, or a semitrailer for use |
|
primarily for farming and ranching, including the rearing of |
|
poultry, and use in feedlots, or a machine, a trailer, or a |
|
semitrailer for use primarily for timber operations. The tax that |
|
would have been remitted on gross rental receipts without this |
|
exemption shall be deemed to have been remitted for the purpose of |
|
calculating the minimum gross rental receipts imposed by Section |
|
152.026. The exemption provided by this subsection applies only if |
|
the owner of the motor vehicle obtains in good faith an exemption |
|
certificate from the person to whom the vehicle is being rented that |
|
includes an exemption number issued under Section 151.1551. |
|
SECTION 6. Notwithstanding Section 151.1551, Tax Code, as |
|
added by this Act, a person is not required to state an exemption |
|
number on an exemption certificate or on a form prescribed by the |
|
comptroller of public accounts to qualify for an exemption under |
|
Section 151.316, 151.3162, or 152.091, Tax Code, that is claimed |
|
before January 1, 2012. |
|
SECTION 7. The change in law made by this Act does not |
|
affect tax liability accruing before January 1, 2012. That |
|
liability continues in effect as if this Act had not been enacted, |
|
and the former law is continued in effect for the collection of |
|
taxes due and for civil and criminal enforcement of the liability |
|
for those taxes. |
|
SECTION 8. To the extent of any conflict, this Act prevails |
|
over another Act of the 82nd Legislature, Regular Session, 2011, |
|
relating to nonsubstantive additions to and corrections in enacted |
|
codes. |
|
SECTION 9. This Act takes effect September 1, 2011. |