HBA-RBT H.B. 1292 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1292 By: Shields Ways and Means 2/25/1999 Introduced BACKGROUND AND PURPOSE Current law, written in 1993, allows a qualified tax exempt organization to hold two days of tax-free auctions or sales per year. Items sold for less than $5,000 per item may be sold without sales tax being assessed. An item sold for more than $5,000 must be assessed sales tax. The intent of the current law is to prevent organizations or individuals from buying and selling high dollar items at charity events merely to avoid paying sales tax. The comptroller's office generally does not enforce collection of sales tax on items which sell for less than $10,000. H.B. 1292 amends the Tax Code to conform with practice and to avoid the imposition of any criminal or civil penalties for accepted practices. Bringing the code into compliance with common practice encourages truthfulness and adherence to the law by both charities and the private individuals who support such charities. Accordingly, H.B. 1292 raises to $10,000 the maximum sales price of an item that may be sold tax-free at a charity auction or event. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 151.310(c), Tax Code, to increase the maximum sales price from $5,000 to $10,000 for a taxable item to be exempt from the sales tax imposed by Subchapter C of this chapter at a tax-free sale or auction. SECTION 2. Effective date: The first day of the first calendar quarter beginning on or after the earliest date that it may take effect under Section 39, Article III, Texas Constitution. Makes application of this Act prospective.