84R1372 BEF-D

By: Darby H.B. No. 2228

A BILL TO BE ENTITLED

AN ACT

relating to a refund of certain sales taxes collected by certain hotels and restaurants that complete renovation projects; authorizing a fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter I, Chapter 151, Tax Code, is amended by adding Section 151.433 to read as follows:

Sec. 151.433. REFUND PROGRAM FOR HOTEL AND RESTAURANT RENOVATION. (a) In this section:

(1) "Participant" means a person whose application to participate in the program has been approved by the comptroller.

(2) "Program" means the sales tax refund program under this section.

(b) A person who owns and operates a hotel in this state is eligible to participate in the program if the person:

(1) completes a project to repair, renovate, improve, or upgrade guest rooms, suites, or common areas of the hotel, for which the person spends at least:

(A) $10,000 per guest room or suite; and

(B) $2 million total for the project, including costs described by Paragraph (A); and

(2) before beginning the project described by Subdivision (1), submits a complete application to the comptroller under Subsection (d) for the project that is approved by the comptroller under Subsection (e).

(c) A person who owns and operates a restaurant in this state is eligible to participate in the program if the person:

(1) completes a project to repair, renovate, improve, or upgrade dining areas, restrooms, kitchens, common areas, exterior signs, building facade, or landscaping of the restaurant, for which the person spends at least:

(A) $10,000 for the kitchen and other areas used primarily for food preparation; and

(B) $100,000 total for the project, including costs described by Paragraph (A); and

(2) before beginning the project described by Subdivision (1), submits a complete application to the comptroller under Subsection (d) for the project that is approved by the comptroller under Subsection (e).

(d) An applicant to participate in the program must submit to the comptroller for each project:

(1) a $1,000 application fee;

(2) plans for the proposed project for the hotel or restaurant, including an estimated completion date;

(3) the estimated cost of the project, verified by a certified public accountant;

(4) a record of the annual sales tax collected by the hotel or restaurant for the three calendar years preceding the year in which the application is submitted, verified by a certified public accountant; and

(5) an estimate of the sales tax that will be collected by the hotel or restaurant in the calendar year following the year in which the project is completed, verified by a certified public accountant.

(e) The comptroller shall approve an application by an applicant if the comptroller finds that the applicant is eligible to participate in the program under Subsection (b) or (c).

(f) A participant is entitled to a refund of sales taxes collected by the participant as provided by this section.

(g) The total amount of refunds to which a participant is entitled is equal to 20 percent of the lesser of:

(1) the estimated cost of the project under Subsection (d)(3); or

(2) the amount actually spent by the participant on the project described by Subsection (b)(1) or (c)(1).

(h) The amount of the refund to which a participant is entitled for a previous calendar year is equal to the lesser of:

(1) 25 percent of an amount determined by:

(A) determining the amount of sales tax collected by the participant's hotel or restaurant in that calendar year; and

(B) subtracting the average annual amount of sales tax collected by that hotel or restaurant as reported in the participant's application under Subsection (d)(4); and

(2) the total amount of refunds to which the participant is entitled under Subsection (g) minus the amount of refunds issued to the participant in previous years.

(i) Not later than April 15 of each year, the comptroller shall issue to a participant any refund for which the participant is entitled for the previous calendar year.

(j) Projects at different locations of the same hotel or restaurant are separate projects for purposes of this section.

(k) An application fee under Subsection (d) may be used only by the comptroller to pay the cost of administering the program.

(l) The comptroller may adopt any rules or forms necessary to implement this section.

SECTION 2. The change in law made by this Act does not affect taxes imposed before the effective date of this Act, and the law in effect before the effective date of this Act is continued in effect for purposes of the liability for and collection of those taxes.

SECTION 3. This Act takes effect September 1, 2015.