HBA-KDB H.B. 1431 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1431 By: Danburg Ways & Means 3/22/2001 Introduced BACKGROUND AND PURPOSE Under current law, a person in the business of selling wine in another state or country (nonresident winery) is prohibited from shipping wine directly to any Texas resident. In Dickerson et al. v. Bailey et al., a U.S. District Court judge in the Southern District found state law banning direct shipments of alcohol, including wine, to be discriminatory, protectionist, and in violation of the Commerce Clause of the United States Constitution. House Bill 1431 authorizes a nonresident winery or any other nonresident business which enters into an agreement with the comptroller of public accounts to voluntarily collect and pay state and local taxes imposed on the sale of wine or other tangible property stored, used, or consumed in this state to ship directly to an adult resident in this state. 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. ANALYSIS House Bill 1431 amends the Tax Code to authorize the comptroller of public accounts (comptroller) to enter into an agreement with a nonresident who is not required under federal law to collect and remit to the comptroller a use or other tax on the sale of tangible personal property for storage, use, or consumption in this state for the voluntary collection of state and local taxes imposed on the sale of tangible personal property stored, used, or consumed in this state. The bill requires the comptroller to enter into the agreement if the nonresident agrees to register with the comptroller and to comply with all applicable rules. The bill prohibits the comptroller from imposing on the nonresident any additional or more stringent requirements than the comptroller imposes for the limited sales, excise, and use tax on a retailer engaged in business in this state. The bill provides that an individual who purchases such tangible personal property from a nonresident who has entered into an aforementioned agreement with the comptroller is not liable under any civil or criminal law of this state for purchasing or accepting delivery of the property if: _the individual pays to the nonresident all state and local taxes on the sale and delivery of the property; _the individual can legally purchase the same or substantially similar property in this state; _the individual stores, uses, or consumes the property and does not sell it; and _it is not against federal law or the laws of the state in which the person is located to sell the same or substantially similar property or to deliver that property to this state. The bill provides that a nonresident who has entered into an agreement who sells tangible personal property and any agent of the nonresident involved in the delivery of the property is not liable under any civil or criminal law of this state for selling or delivering the tangible personal property to an individual in this state if: _ the nonresident remits to the comptroller all state and local taxes on the sale and delivery of the property; _the individual who purchased the tangible personal property and accepted delivery can legally purchase the same or substantially similar property in this state; _the nonresident has not received notice that the individual who purchased the property has sold similar property purchased from the nonresident; and _it is not against federal law or the laws of the state in which the nonresident is located to sell the same or substantially similar property or to deliver that property to this state. EFFECTIVE DATE September 1, 2001.