HBA-SEP H.B. 860 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 860
By: Dutton
Ways & Means
3/22/2001
Introduced



BACKGROUND AND PURPOSE 

The 76th Legislature designated the first weekend in August as a sales tax
holiday.  During this period, if the governing body of a local taxing
authority does not repeal the application of the exemption, clothing and
footwear priced less than $100 is exempt from local and state sales tax if
it is purchased between 12:01 a.m. on the first Friday in August and
midnight on the following Sunday.  According to the comptroller of public
accounts, Texans saved a total of $69.6 million in sales taxes during the
first two tax holidays. Extending the tax holiday from three days to two
weeks would further reduce taxes for individual households.  House Bill 860
extends the existing tax holiday to two weeks and exempts during the month
of August certain school supplies from sales and use taxes. 

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 860 amends the Tax Code to extend the period during which the
sale of a clothing article or footwear with a price of less than $100 is
exempt from sales tax.  The bill provides that the period begins on the
first Saturday in August and ends on the second Friday after the first
Saturday, rather than beginning on the first Friday and ending on the
following Sunday.  The bill also exempts the sale, storage, use, or other
consumption of certain school supplies from sales tax if the school supply
with a price of less than $100 is purchased during August for use by a
student in a public, private elementary or secondary school class,
including textbooks, books, and other instructional material.  The bill
does not require a retailer to obtain an exemption certificate stating that
the purchased school supplies are for student use unless the supplies are
purchased in a quantity that indicates otherwise.  The bill authorizes the
governing body of a local taxing authority to repeal the school supply
exemption. 

EFFECTIVE DATE

July 1, 2001, or if the Act does not receive the necessary vote, the Act
takes effect October 1, 2001.