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.