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.