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A BILL TO BE ENTITLED
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AN ACT
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relating to a sales and use tax exemption for certain tangible |
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personal property and services related to mineral exploration and |
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production. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 151.324(a), Tax Code, is amended to read |
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as follows: |
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(a) The following items are exempted from the sales tax |
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imposed by Subchapter C of this chapter: |
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(1) drill pipe, casing, tubing, and other pipe used |
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for the exploration for or production of oil, gas, sulphur, or other |
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minerals offshore not in this state; [and] |
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(2) tangible personal property exclusively used for |
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the exploration for or production of oil, gas, sulphur, or other |
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minerals offshore not in this state; |
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(3) machinery used to position, place, and hold |
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property exempted under Subdivision (1) or (2) during the assembly, |
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fabrication, restoration, or repair of that property; and |
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(4) services necessary to install, assemble, |
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disassemble, or reassemble scaffolding used in the assembly, |
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fabrication, restoration, or repair of property exempted under |
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Subdivision (1), (2), or (3). |
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SECTION 2. Subchapter H, Chapter 151, Tax Code, is amended |
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by adding Section 151.3241 to read as follows: |
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Sec. 151.3241. DIVERGENT USE OF MACHINERY RELATED TO |
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MINERAL EXPLORATION AND PRODUCTION. (a) In this section, |
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"divergent use" means the use of machinery in a manner or for a |
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purpose other than the manner or purpose that qualified the sale, |
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use, or consumption of the machinery for exemption under Section |
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151.324(a)(3). |
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(b) Divergent use of machinery exempted under Section |
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151.324(a)(3) will not result in sales and use tax being due on the |
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machinery if the divergent use occurs after the fourth anniversary |
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of the date the machinery is purchased. |
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(c) Divergent use of machinery exempted under Section |
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151.324(a)(3) that occurs during any month before the fourth |
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anniversary of the date the machinery is purchased results in sales |
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and use tax being due for that month. The amount of the sales and use |
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tax due for a month is equal to 1/48 of the purchase price of the |
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machinery multiplied by the percentage of divergent use during that |
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month multiplied by the sales and use tax rate as of the first day of |
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that month. |
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(d) The percentage of divergent use for a month is |
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determined by dividing the amount of divergent use during the month |
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by the amount of total use of the machinery during the month. The |
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amount of divergent use during a month is the total time the |
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machinery operates for a divergent use during the month, measured |
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in hours. The total use of the machinery during the month is the |
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total time the machinery is operated during the month, measured in |
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hours. |
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SECTION 3. The change in law made by this Act does not |
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affect tax liability accruing before the effective date of this |
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Act. That liability continues in effect as if this Act had not been |
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enacted, and the former law is continued in effect for the |
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collection of taxes due and for civil and criminal enforcement of |
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the liability for those taxes. |
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SECTION 4. This Act takes effect September 1, 2013. |