Bill Text: TX HB2915 | 2019-2020 | 86th Legislature | Introduced

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Bill Title: Relating to state and local taxes and fees.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced - Dead) 2019-03-12 - Referred to Ways & Means [HB2915 Detail]

Download: Texas-2019-HB2915-Introduced.html

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86R10430 SMT/CJC/GCB/JRR-D
By: Springer H.B. No. 2915

A BILL TO BE ENTITLED
AN ACT
relating to state and local taxes and fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. PROVISIONS RELATED TO DECREASING PROPERTY TAX LIABILITY
SECTION 1.01. Section 42.2516(a), Education Code, is
amended to read as follows:
(a) In this title, "state compression percentage" means the
percentage of a school district's adopted maintenance and
operations tax rate for the 2005 tax year that serves as the basis
for state funding. The compression percentage is the lower of:
(1) the following compression percentages, based on
the district's maintenance and operations tax for the 2020 tax
year:
(A) if a district's maintenance and operations
tax is equal to or greater than $1.00 per hundred dollars of
valuation, 60 percent;
(B) if a district's maintenance and operations
tax is equal to or greater than $0.90 but less than $1.00 per
hundred dollars of valuation, a compression percentage determined
by the commissioner for that district that will compress the
district's maintenance and operations tax to $0.90 per hundred
dollars of valuation; or
(C) if a district's maintenance and operations
tax is $0.90 or less per hundred dollars of valuation, 66.67
percent; or
(2) a compression percentage established by
appropriation for a school year. [If the state compression
percentage is not established by appropriation for a school year,
the commissioner shall determine the state compression percentage
for each school year based on the percentage by which a district is
able to reduce the district's maintenance and operations tax rate
for that year, as compared to the district's adopted maintenance
and operations tax rate for the 2005 tax year, as a result of state
funds appropriated for that year from the property tax relief fund
established under Section 403.109, Government Code, or from another
funding source available for school district property tax relief.]
SECTION 1.02. Section 403.302(d), Government Code, is
amended to read as follows:
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b), [or] (c), or
(s), Tax Code, in the year that is the subject of the study for each
school district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by former Section 311.003(e), Tax Code, before May 31,
1999, and within the boundaries of the zone as those boundaries
existed on September 1, 1999, including subsequent improvements to
the property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) the total dollar amount of any captured appraised
value of property that:
(A) is within a reinvestment zone:
(i) created on or before December 31, 2008,
by a municipality with a population of less than 18,000; and
(ii) the project plan for which includes
the alteration, remodeling, repair, or reconstruction of a
structure that is included on the National Register of Historic
Places and requires that a portion of the tax increment of the zone
be used for the improvement or construction of related facilities
or for affordable housing;
(B) generates school district taxes that are paid
into a tax increment fund created under Chapter 311, Tax Code; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(6) the total dollar amount of any exemptions granted
under Section 11.251 or 11.253, Tax Code;
(7) the difference between the comptroller's estimate
of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(8) the portion of the appraised value of residence
homesteads of individuals who receive a tax limitation under
Section 11.26, Tax Code, on which school district taxes are not
imposed in the year that is the subject of the study, calculated as
if the residence homesteads were appraised at the full value
required by law;
(9) a portion of the market value of property not
otherwise fully taxable by the district at market value because of:
(A) action required by statute or the
constitution of this state, other than Section 11.311, Tax Code,
that, if the tax rate adopted by the district is applied to it,
produces an amount equal to the difference between the tax that the
district would have imposed on the property if the property were
fully taxable at market value and the tax that the district is
actually authorized to impose on the property, if this subsection
does not otherwise require that portion to be deducted; or
(B) action taken by the district under Subchapter
B or C, Chapter 313, Tax Code, before the expiration of the
subchapter;
(10) the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(11) the appraised value of property the collection of
delinquent taxes on which is deferred under Section 33.06, Tax
Code;
(12) the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
Section 33.065, Tax Code; and
(13) the amount by which the market value of a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section.
SECTION 1.03. Section 11.13, Tax Code, is amended by
amending Subsection (i) and adding Subsections (s) and (t) to read
as follows:
(i) The assessor and collector for a taxing unit may
disregard the exemptions authorized by Subsection (b), (c), (d),
[or] (n), or (s) [of this section] and assess and collect a tax
pledged for payment of debt without deducting the amount of the
exemption if:
(1) prior to adoption of the exemption, the unit
pledged the taxes for the payment of a debt; and
(2) granting the exemption would impair the obligation
of the contract creating the debt.
(s) In addition to any other exemptions provided by this
section, an individual is entitled to an exemption from taxation by
a school district of a portion of the appraised value of the
individual's residence homestead in an amount equal to the lesser
of:
(1) 50 percent of the difference between:
(A) the total appraised value of the individual's
residence homestead; and
(B) the total dollar amount of all other
exemptions for which the individual qualifies the residence
homestead under this section; or
(2) 150 percent of the median appraised value of all
single family residences in this state in the preceding year as
determined by the comptroller under Subsection (t).
(t) Not later than January 1 of each year, the comptroller
shall determine the median appraised value of all single-family
residences in this state in the preceding year and publish that
value in the Texas Register.
SECTION 1.04. Subchapter B, Chapter 11, Tax Code, is
amended by adding Section 11.35 to read as follows:
Sec. 11.35. INVENTORY. (a) In this section, "inventory"
means:
(1) a finished good held for sale or resale; or
(2) a raw or finished material held to be incorporated
into or attached to tangible personal property to create a finished
good.
(b) A person is entitled to an exemption from taxation of
the appraised value of the person's inventory.
SECTION 1.05. This article applies only to an ad valorem tax
year that begins on or after the effective date of this Act.
ARTICLE 2. PROVISIONS RELATED TO INCREASING STATE AND LOCAL REVENUE
SECTION 2.01. Subchapter A, Chapter 2301, Occupations Code,
is amended by adding Section 2301.008 to read as follows:
Sec. 2301.008. ANNUAL REPORT ON WARRANTIES ISSUED FOR
CERTAIN OFF-HIGHWAY VEHICLES PURCHASED OUTSIDE THIS STATE. (a) In
this section:
(1) "Off-highway vehicle" has the meaning assigned by
Section 501.0301, Transportation Code.
(2) "Retailer" has the meaning assigned by Section
151.008, Tax Code.
(b) Not later than March 1 of each year, a manufacturer of
off-highway vehicles shall submit to the department a report
listing each warranty issued by the manufacturer for a new
off-highway vehicle that was, during the preceding calendar year,
sold to a resident of this state by a retailer located outside this
state. The report must:
(1) be in a form prescribed by the department; and
(2) contain, at a minimum, the following information
for each warranty:
(A) the vehicle identification number of the
vehicle;
(B) the make, model, and model year of the
vehicle;
(C) the name and address of the purchaser of the
vehicle; and
(D) the sales price of the vehicle.
(c) The department shall:
(1) review each report submitted under this section to
determine whether the report is complete; and
(2) require a manufacturer to submit any additional
information necessary to meet the requirements of this section if
the department determines that the report submitted by the
manufacturer is incomplete.
(d) As soon as practicable after receiving a report
submitted under this section that the department determines is
complete, the department shall forward the report to the
comptroller. The comptroller may use information contained in the
report for the purpose of investigating and collecting any unpaid
taxes imposed under Subchapter D, Chapter 151, Tax Code, on a new
off-highway vehicle described in the report.
(e) The board may adopt rules as necessary to implement this
section.
(f) Information contained in a report submitted under this
section is confidential and not subject to disclosure under Chapter
552, Government Code.
SECTION 2.02. Sections 23.1241(a)(1), (2), (7), (8), and
(9), Tax Code, are amended to read as follows:
(1) "Dealer" means a person engaged in the business in
this state of selling[, leasing, or renting] heavy equipment. The
term does not include a bank, savings bank, savings and loan
association, credit union, or other finance company. In addition,
for purposes of taxation of a person's inventory of heavy equipment
in a tax year, the term does not include a person who renders the
person's inventory of heavy equipment for taxation in that tax year
by filing a rendition statement or property report in accordance
with Chapter 22.
(2) "Dealer's heavy equipment inventory" means all
items of heavy equipment that a dealer holds for sale at retail [,
lease, or rent] in this state [during a 12-month period]. The term
includes items of heavy equipment that are leased or rented but
subject to a purchase option by the lessee or renter.
(7) "Sales price" means:
(A) the total amount of money paid or to be paid
to a dealer for the purchase of an item of heavy equipment; or
(B) for a lease or rental with an option to
purchase, the total amount of the lease or rental payments plus any
final consideration, excluding interest.
(8) "Subsequent sale" means a dealer-financed sale of
an item of heavy equipment that, at the time of the sale, has been
the subject of a dealer-financed sale from the same dealer's heavy
equipment inventory in the same calendar year. [The term does not
include a rental or lease with an unexercised purchase option or
without a purchase option.]
(9) "Total annual sales" means the total of the[:
[(A)] sales price for each sale from a dealer's
heavy equipment inventory in a 12-month period[; and
[(B) lease and rental payments received for each
lease or rental of heavy equipment inventory in a 12-month period].
SECTION 2.03. Sections 23.1241(b) and (e), Tax Code, are
amended to read as follows:
(b) For the purpose of the computation of property tax:
(1) [,] the market value of a dealer's heavy equipment
inventory on January 1 is the total annual sales, less sales to
dealers, fleet transactions, and subsequent sales, for the 12-month
period corresponding to the preceding tax year, divided by 12; and
(2) a sale is considered to occur when possession of an
item of heavy equipment is transferred from the dealer to the
purchaser.
(e) A dealer is presumed to be an owner of a dealer's heavy
equipment inventory on January 1 if, in the 12-month period ending
on December 31 of the preceding year, the dealer sold[, leased, or
rented] an item of heavy equipment to a person other than a
dealer. The presumption is not rebutted by the fact that a dealer
has no item of heavy equipment physically on hand for sale from the
dealer's heavy equipment inventory on January 1.
SECTION 2.04. Sections 23.1242(b), (e), and (f), Tax Code,
are amended to read as follows:
(b) Except for an item of heavy equipment sold to a dealer,
an item of heavy equipment included in a fleet transaction, or an
item of heavy equipment that is the subject of a subsequent sale,
[or an item of heavy equipment that is subject to a lease or
rental,] an owner or a person who has agreed by contract to pay the
owner's current year property taxes levied against the owner's
heavy equipment inventory shall assign a unit property tax to each
item of heavy equipment sold from a dealer's heavy equipment
inventory. [In the case of a lease or rental, the owner shall
assign a unit property tax to each item of heavy equipment leased or
rented.] The unit property tax of each item of heavy equipment is
determined by multiplying the sales price of the item [or the
monthly lease or rental payment received for the item, as
applicable,] by the unit property tax factor. [If the transaction
is a lease or rental, the owner shall collect the unit property tax
from the lessee or renter at the time the lessee or renter submits
payment for the lease or rental. The owner of the equipment shall
state the amount of the unit property tax assigned as a separate
line item on an invoice.] On or before the 20th day of each month
the owner shall, together with the statement filed by the owner as
required by this section, deposit with the collector an amount
equal to the total of unit property tax assigned to all items of
heavy equipment sold[, leased, or rented] from the dealer's heavy
equipment inventory in the preceding month to which a unit property
tax was assigned. The money shall be deposited by the collector to
the credit of the owner's escrow account for prepayment of property
taxes as provided by this section. An escrow account required by
this section is used to pay property taxes levied against the
dealer's heavy equipment inventory, and the owner shall fund the
escrow account as provided by this subsection.
(e) The comptroller by rule shall adopt a dealer's heavy
equipment inventory tax statement form. Each month, a dealer shall
complete the form regardless of whether an item of heavy equipment
is sold[, leased, or rented]. A dealer may use no other form for
that purpose. The statement may include the information the
comptroller considers appropriate but shall include at least the
following:
(1) a description of each item of heavy equipment
sold, [leased, or rented] including any unique identification or
serial number affixed to the item by the manufacturer;
(2) the sales price of [or lease or rental payment
received for] the item of heavy equipment[, as applicable];
(3) the unit property tax of the item of heavy
equipment, if any; and
(4) the reason no unit property tax is assigned if no
unit property tax is assigned.
(f) On or before the 20th day of each month, a dealer shall
file with the collector the statement covering the sale[, lease, or
rental] of each item of heavy equipment sold[, leased, or rented] by
the dealer in the preceding month. On or before the 20th day of a
month following a month in which a dealer does not sell[, lease, or
rent] an item of heavy equipment, the dealer must file the statement
with the collector and indicate that no sales[, leases, or rentals]
were made in the prior month. A dealer shall file a copy of the
statement with the chief appraiser and retain documentation
relating to the disposition of each item of heavy equipment sold
[and the lease or rental of each item of heavy equipment]. A chief
appraiser or collector may examine documents held by a dealer as
provided by this subsection in the same manner, and subject to the
same conditions, as provided by Section 23.1241(g).
SECTION 2.05. Subchapter A, Chapter 151, Tax Code, is
amended by adding Section 151.0023 to read as follows:
Sec. 151.0023. "ACCOUNTING AND AUDIT SERVICES".
"Accounting and audit services" means the making and recording of
business financial records and statements, the creation and
implementation of accounting or bookkeeping systems, cost
accounting or bookkeeping services, and services provided by a
certified public accountant, enrolled agent, or bookkeeping firm in
connection with the preparation of financial and auditing reports.
The term includes financial planning services, tax return
preparation, and budgeting services.
SECTION 2.06. Section 151.0028, Tax Code, is amended to
read as follows:
Sec. 151.0028. "AMUSEMENT SERVICES". (a) "Amusement
services" means the provision of amusement, entertainment,
tanning, or recreation, but does not include the provision of
educational or health services if prescribed by a licensed
practitioner of the healing arts for the primary purpose of
education or health maintenance or improvement.
(b) "Amusement services" includes membership in a private
club or organization that provides entertainment, tanning,
recreational, sports, dining, or social facilities to its members.
SECTION 2.07. Subchapter A, Chapter 151, Tax Code, is
amended by adding Sections 151.0029, 151.00295, 151.00352,
151.00365, 151.00375, and 151.00378 to read as follows:
Sec. 151.0029. "AUTOMOTIVE SERVICES". "Automotive
services" means services performed on or to a motor vehicle,
including washing, waxing, painting, lubrication, rustproofing,
and undercoating.
Sec. 151.00295. "BARBERING OR COSMETOLOGY SERVICES".
"Barbering or cosmetology services" means acts or activities that
constitute "barbering," as that term is defined by Section
1601.002, Occupations Code, or "cosmetology," as that term is
defined by Section 1602.002, Occupations Code, and any other act or
activity provided to a client of a person who holds a license,
certificate, permit, or other credential issued under Chapter 1601,
1602, or 1603, Occupations Code, authorizing the person to practice
or perform the activity.
Sec. 151.00352. "DATING SERVICES". "Dating services" means
services to arrange romantic or social dates between individuals,
to offer potential romantic or social dates to individuals, or to
allow individuals to contact other individuals for the purpose of
arranging romantic or social dates.
Sec. 151.00365. "DEBT MANAGEMENT SERVICES". "Debt
management services" means acts or activities that constitute a
"debt management service," as that term is defined by Section
394.202, Finance Code, and any other act or activity provided to a
client of a provider, as that term is defined by that section.
Sec. 151.00375. "FUNERAL SERVICES". "Funeral services"
means acts or activities that constitute "funeral directing," as
that term is defined by Section 651.001, Occupations Code, and
services provided by a funeral director, embalmer, or funeral
establishment, as those terms are defined by that section, or by an
employee of one of those persons.
Sec. 151.00378. "HUNTING OR FISHING GUIDE SERVICES".
"Hunting or fishing guide services" means guiding a person who is
hunting or fishing.
SECTION 2.08. The heading to Section 151.0038, Tax Code, is
amended to read as follows:
Sec. 151.0038. "INFORMATION SERVICES" [SERVICE"].
SECTION 2.09. Section 151.0038(b), Tax Code, is amended to
read as follows:
(b) In this section, "newspaper" means a publication that is
printed on newsprint, the average sales price of which for each copy
over a 30-day period does not exceed $3, and that is printed and
distributed at a daily, weekly, or other short interval for the
dissemination of news of a general character and of a general
interest. "Newspaper" does not include a magazine, handbill,
circular, flyer, sales catalog, or similar printed item unless the
printed item is printed for distribution as a part of a newspaper
and is actually distributed as a part of a newspaper. For the
purposes of this section, an advertisement is news of a general
character and of a general interest. Notwithstanding any other
provision of this subsection, "newspaper" includes:
(1) a publication containing articles and essays of
general interest by various writers and advertisements that is
produced for the operator of a licensed and certified carrier of
persons and distributed by the operator to its customers during
their travel on the carrier; and
(2) a publication for the dissemination of news of a
general character and of a general interest that is printed on
newsprint and distributed to the general public free of charge at a
daily, weekly, or other short interval [has the meaning assigned by
Section 151.319(f)].
SECTION 2.10. Subchapter A, Chapter 151, Tax Code, is
amended by adding Sections 151.00391, 151.00425, 151.0044, and
151.00442 to read as follows:
Sec. 151.00391. "INTERIOR DESIGN OR INTERIOR DECORATING
SERVICES". "Interior design or interior decorating services" means
an act or activity provided by a person who represents that the
person is a "registered interior designer" under Section 1053.151,
Occupations Code, in connection with the act or activity or the
selection or provision of advice regarding the selection of
furnishings, materials, or finishing for a residential or
commercial space.
Sec. 151.00425. "MASSAGE THERAPY SERVICES". "Massage
therapy services" means acts or activities that constitute "massage
therapy," as that term is defined by Section 455.001, Occupations
Code, and any other acts or activities performed for a massage
therapist's client in relation to massage therapy.
Sec. 151.0044. "PACKING SERVICES". "Packing services"
means packing, crating, or wrapping. The term includes gift and
package wrapping.
Sec. 151.00442. "PERSONAL INSTRUCTION SERVICES". "Personal
instruction services" means coaching or instruction in an
individual skill, including dance, golf, or tennis.
SECTION 2.11. Section 151.0047, Tax Code, is amended to
read as follows:
Sec. 151.0047. "REAL PROPERTY CONSTRUCTION SERVICES"
[REPAIR AND REMODELING"]. [(a)] "Real property construction
services [repair and remodeling]" means the construction, repair,
restoration, remodeling, or modification of an improvement to real
property [other than:
[(1) a structure or separate part of a structure used
as a residence;
[(2) an improvement immediately adjacent to a
structure described by Subdivision (1) of this section and used in
the residential occupancy of the structure or separate part of the
structure by the person using the structure or part as a residence;
or
[(3) an improvement to a manufacturing or processing
production unit in a petrochemical refinery or chemical plant that
provides increased capacity in the production unit].
[(b) In this section:
[(1) "Increased capacity" means the capability to
produce:
[(A) additional products or services as measured
by units per hour or units per year; or
[(B) a new product or service.
[(2) "Production unit" means a group of manufacturing
and processing machines and ancillary equipment that together are
necessary to create or produce a physical or chemical change
beginning with the first processing of the raw material and ending
with the finished product.
[(3) "New product" means a product that:
[(A) has different product properties and a
different commercial application than the product previously
manufactured or processed by the production unit that produced the
previous product; and
[(B) is not created by straining or purifying an
existing product or by making cosmetic changes, such as adding or
removing color or odor, to or from an existing product.]
SECTION 2.12. Section 151.006(a), Tax Code, is amended to
read as follows:
(a) "Sale for resale" means a sale of:
(1) tangible personal property or a taxable service to
a purchaser who acquires the property or service for the purpose of
reselling it with or as a taxable item as defined by Section 151.010
in the United States of America or a possession or territory of the
United States of America or in the United Mexican States in the
normal course of business in the form or condition in which it is
acquired or as an attachment to or integral part of other tangible
personal property or taxable service;
(2) tangible personal property to a purchaser for the
sole purpose of the purchaser's leasing or renting it in the United
States of America or a possession or territory of the United States
of America or in the United Mexican States in the normal course of
business to another person, but not if incidental to the leasing or
renting of real estate;
(3) tangible personal property to a purchaser who
acquires the property for the purpose of transferring it in the
United States of America or a possession or territory of the United
States of America or in the United Mexican States as an integral
part of a taxable service;
(4) a taxable service, other than a transport service,
performed on tangible personal property that is held for sale by the
purchaser of the taxable service; or
(5) except as provided by Subsection (c), tangible
personal property to a purchaser who acquires the property for the
purpose of transferring it as an integral part of performing a
contract, or a subcontract of a contract, with the federal
government only if the purchaser:
(A) allocates and bills to the contract the cost
of the property as a direct or indirect cost; and
(B) transfers title to the property to the
federal government under the contract and applicable federal
acquisition regulations.
SECTION 2.13. Section 151.0101(a), Tax Code, is amended to
read as follows:
(a) "Taxable services" means:
(1) amusement services;
(2) cable television services;
(3) personal services;
(4) motor vehicle parking and storage services;
(5) the repair, remodeling, maintenance, and
restoration of tangible personal property, except:
(A) aircraft;
(B) a ship, boat, or other vessel, other than:
(i) a taxable boat or motor as defined by
Section 160.001;
(ii) a sports fishing boat; or
(iii) any other vessel used for pleasure;
and
(C) [the repair, maintenance, and restoration of
a motor vehicle; and
[(D)] the repair, maintenance, creation, and
restoration of a computer program, including its development and
modification, not sold by the person performing the repair,
maintenance, creation, or restoration service;
(6) telecommunications services;
(7) credit reporting services;
(8) debt collection services;
(9) insurance services;
(10) information services;
(11) real property services;
(12) data processing services;
(13) real property construction services, except to
the extent prohibited by Section 29, Article VIII, Texas
Constitution [repair and remodeling];
(14) security services;
(15) telephone answering services;
(16) Internet access service; [and]
(17) a sale by a transmission and distribution
utility, as defined in Section 31.002, Utilities Code, of
transmission or delivery of service directly to an electricity
end-use customer whose consumption of electricity is subject to
taxation under this chapter;
(18) accounting and audit services;
(19) automotive services;
(20) barbering or cosmetology services;
(21) dating services;
(22) debt management services;
(23) funeral services;
(24) hunting or fishing guide services;
(25) interior design or interior decorating services;
(26) massage therapy services;
(27) packing services;
(28) personal instruction services;
(29) transport services; and
(30) veterinary services.
SECTION 2.14. Subchapter A, Chapter 151, Tax Code, is
amended by adding Sections 151.0108 and 151.013 to read as follows:
Sec. 151.0108. "TRANSPORT SERVICES". "Transport services"
means private mail or package delivery or courier service sold to a
person in this state.
Sec. 151.013. "VETERINARY SERVICES". "Veterinary
services" means an act or activity constituting the "practice of
veterinary medicine," as that term is defined by Section 801.002,
Occupations Code, and any other act or activity provided to a
veterinarian's client in relation to the practice of veterinary
medicine. The term also includes:
(1) prescribed medications, artificial insemination,
breeding services, boarding, and training provided by a
veterinarian or a person employed by a veterinarian; and
(2) medical tests performed on an animal or on tissue,
fluids, or other substances removed from an animal in connection
with diagnosis or treatment.
SECTION 2.15. Section 151.1551(a), Tax Code, is amended to
read as follows:
(a) This section applies to an exemption provided by:
(1) Section 151.316(a)(6), (7), (8), (10), (11), (12),
or (14);
(2) Section 151.316(b) for tangible personal property
used in the production of agricultural products for sale;
(3) Section 151.3162(b) for tangible personal
property used in the production of timber for sale;
(4) Sections 151.317(a)(4) and (10) [151.317(a)(5)
and (11)] for electricity used in agriculture or timber operations;
and
(5) Section 151.3111 for services performed on
tangible personal property exempted under Section 151.316(a)(6),
(7), (8), (10), (11), or (12), 151.316(b), or 151.3162(b).
SECTION 2.16. Section 151.313(a), Tax Code, is amended to
read as follows:
(a) The following items are exempted from the taxes imposed
by this chapter:
(1) a drug or medicine, other than insulin, if
prescribed or dispensed for a human or animal by a licensed
practitioner of the healing arts;
(2) insulin;
(3) [a drug or medicine that is required to be labeled
with a "Drug Facts" panel in accordance with regulations of the
federal Food and Drug Administration, without regard to whether it
is prescribed or dispensed by a licensed practitioner of the
healing arts;
[(4)] a hypodermic syringe or needle;
(4) [(5)] a brace; hearing aid or audio loop;
orthopedic, dental, or prosthetic device; ileostomy, colostomy, or
ileal bladder appliance; or supplies or replacement parts for the
listed items;
(5) [(6)] a therapeutic appliance, device, and any
related supplies specifically designed for those products, if
dispensed or prescribed by a licensed practitioner of the healing
arts, when those items are purchased and used by an individual for
whom the items listed in this subdivision were dispensed or
prescribed;
(6) [(7)] corrective lens and necessary and related
supplies, if dispensed or prescribed by an ophthalmologist or
optometrist;
(7) [(8)] specialized printing or signalling
equipment used by the deaf for the purpose of enabling the deaf to
communicate through the use of an ordinary telephone and all
materials, paper, and printing ribbons used in that equipment;
(8) [(9)] a braille wristwatch, braille writer,
braille paper and braille electronic equipment that connects to
computer equipment, and the necessary adaptive devices and adaptive
computer software;
(9) [(10)] each of the following items if purchased
for use by the blind to enable them to function more independently:
a slate and stylus, print enlarger, light probe, magnifier, white
cane, talking clock, large print terminal, talking terminal, or
harness for guide dog;
(10) [(11)] hospital beds;
(11) [(12)] blood glucose monitoring test strips;
(12) [(13)] an adjustable eating utensil used to
facilitate independent eating if purchased for use by a person,
including a person who is elderly or physically disabled, has had a
stroke, or is a burn victim, who does not have full use or control of
the person's hands or arms;
(13) [(14)] subject to Subsection (d), a dietary
supplement; and
(14) [(15)] intravenous systems, supplies, and
replacement parts designed or intended to be used in the diagnosis
or treatment of humans.
SECTION 2.17. Sections 151.314(b), (c), (c-2), (c-3), and
(d), Tax Code, are amended to read as follows:
(b) "Food products" shall include, except as otherwise
provided herein, but shall not be limited to cereals and cereal
products; milk and milk products[, including ice cream];
oleomargarine; meat and meat products; poultry and poultry
products; fish and fish products; eggs and egg products; vegetables
and vegetable products; fruit and fruit products; spices,
condiments, and salt; sugar and sugar products; coffee and coffee
substitutes; tea; cocoa products; [snack items;] or any combination
of the above.
(c) "Food products" shall not include:
(1) drugs, medicines, tonics, vitamins, dietary
supplements, and medicinal preparations in any form;
(2) carbonated and noncarbonated packaged soft
drinks, which are nonalcoholic beverages that contain natural or
artificial sweeteners;
(3) ice; [or]
(4) candy;
(5) bakery items; or
(6) snack items.
(c-2) The exemption provided by Subsection (a) does not
include the following prepared food:
(1) [except as provided by Subsection (c-3)(1),] food,
food products, and drinks, including meals, milk and milk products,
fruit and fruit products, sandwiches, salads, processed meats and
seafoods, and vegetable juice[, and ice cream in cones or small
cups,] served, prepared, or sold ready for immediate consumption by
restaurants, lunch counters, cafeterias, delis, vending machines,
hotels, or like places of business or sold ready for immediate
consumption from pushcarts, motor vehicles, or any other form of
vehicle;
(2) [except as provided by Subsection (c-3)(1),] food
sold in a heated state or heated by the seller; or
(3) two or more food ingredients mixed or combined by
the seller for sale as a single item, including items that are sold
in an unheated state by weight or volume as a single item, but not
including food that is only cut, repackaged, or pasteurized by the
seller.
(c-3) The exemption provided by Subsection (a) includes[:
[(1) bakery items sold by a bakery, regardless of
whether the items are:
[(A) heated by the consumer or seller; or
[(B) served with plates or other eating utensils;
[(2) bakery items sold at a retail location other than
a bakery without plates or other eating utensils; and
[(3)] eggs, fish, meat, and poultry, and foods
containing these raw animal foods, that require cooking by the
consumer as recommended by the Food and Drug Administration in
Chapter 3, Section 401.11 of its Food Code to prevent food-borne
illness and any other food that requires cooking by the consumer
before the food is edible.
(d) Food products, meals, soft drinks, bakery items, snack
items, and candy for human consumption are exempted from the taxes
imposed by this chapter if:
(1) served by a public or private school, school
district, student organization, booster club or other school
support organization, or parent-teacher association under an
agreement with the proper school authorities in an elementary or
secondary school during the regular school day or by a
parent-teacher association during a fund-raising sale the proceeds
of which do not benefit an individual;
(2) sold by a church or at a function of a church;
(3) served to a patient or inmate of a hospital or
other institution licensed by the state for the care of humans;
(4) served to a permanent resident of a retirement
facility which provides permanent housing and residence to
individuals, a majority of whom are 60 years or older; or
(5) sold during an event sponsored or sanctioned by an
elementary or secondary school or school district at a concession
stand operated by a booster club or other school support
organization formed to support the school or school district, but
only if the proceeds from the sales benefit the school or school
district.
SECTION 2.18. Section 151.314(e), Tax Code, as amended by
Chapters 209 (H.B. 2424) and 1310 (H.B. 2425), Acts of the 78th
Legislature, 2003, is reenacted and amended to read as follows:
(e) Food products, candy, snack items, bakery items, and
soft drinks are exempted from the taxes imposed by this chapter if
sold at an exempt sale qualifying under this subsection or if stored
or used by the purchaser of the item at the exempt sale. A sale is
exempted under this subsection if[:
[(1)] the sale is made by a member of or volunteer for
a nonprofit organization devoted to the exclusive purpose of
education or religious or physical training or by a group
associated with a public or private elementary or secondary school
and:
(1) [;
[(2)] the sale is made as a part of a fund-raising
drive sponsored by the organization or group; and
(2) [(3)] all net proceeds from the sale go to the
organization or group for its exclusive use.
SECTION 2.19. Sections 151.317(a) and (d), Tax Code, are
amended to read as follows:
(a) Subject to Sections 151.1551, 151.359, and 151.3595 and
Subsection (d) of this section, gas and electricity are exempted
from the taxes imposed by this chapter when sold for:
(1) [residential use;
[(2)] use in powering equipment exempt under Section
151.318 or 151.3185 by a person processing tangible personal
property for sale as tangible personal property, other than
preparation or storage of prepared food described by Section
151.314(c-2);
(2) [(3)] use in lighting, cooling, and heating in the
manufacturing area during the actual manufacturing or processing of
tangible personal property for sale as tangible personal property,
other than preparation or storage of prepared food described by
Section 151.314(c-2);
(3) [(4)] use directly in exploring for, producing, or
transporting, a material extracted from the earth;
(4) [(5)] use in agriculture, including dairy or
poultry operations and pumping for farm or ranch irrigation;
(5) [(6)] use directly in electrical processes, such
as electroplating, electrolysis, and cathodic protection;
(6) [(7)] use directly in the off-wing processing,
overhaul, or repair of a jet turbine engine or its parts for a
certificated or licensed carrier of persons or property;
(7) [(8)] use directly in providing, under contracts
with or on behalf of the United States government or foreign
governments, defense or national security-related electronics,
classified intelligence data processing and handling systems, or
defense-related platform modifications or upgrades;
(8) [(9)] use directly by a data center or large data
center project that is certified by the comptroller as a qualifying
data center under Section 151.359 or a qualifying large data center
project under Section 151.3595 in the processing, storage, and
distribution of data;
(9) [(10)] a direct or indirect use, consumption, or
loss of electricity by an electric utility engaged in the purchase
of electricity for resale; or
(10) [(11)] use in timber operations, including
pumping for irrigation of timberland.
(d) To qualify for the exemptions in Subsections (a)(1)-(8)
[(a)(2)-(9)], the gas or electricity must be sold to the person
using the gas or electricity in the exempt manner. For purposes of
this subsection, the use of gas or electricity in an exempt manner
by an independent contractor engaged by the purchaser of the gas or
electricity to perform one or more of the exempt activities
identified in Subsections (a)(1)-(8) [(a)(2)-(9)] is considered
use by the purchaser of the gas or electricity.
SECTION 2.20. Section 151.350(d), Tax Code, is amended to
read as follows:
(d) In this section, "restore" means:
(1) launder, clean, repair, treat, or apply protective
chemicals to an item, to the extent the service is a personal
service as defined in Section 151.0045; and
(2) repair, restore, or remodel, to the extent the
service is:
(A) considered to be the [a real property]
repair, restoration, [or] remodeling, or modification of an
improvement to real property under [service as defined in] Section
151.0047; or
(B) defined as a taxable service in Section
151.0101(a)(5).
SECTION 2.21. Section 151.401(a), Tax Code, is amended to
read as follows:
(a) The taxes imposed by this chapter are due and payable to
the comptroller on or before the 20th day of the month following the
end of each calendar month unless a taxpayer qualifies as a
quarterly filer under Subsection (b) [of this section or unless the
taxpayer prepays the tax on a quarterly basis as permitted by
Section 151.424 of this code].
SECTION 2.22. Section 151.425, Tax Code, is amended to read
as follows:
Sec. 151.425. FORFEITURE OF [DISCOUNT OR] REIMBURSEMENT.
If a taxpayer fails to file a report required by this chapter when
due or to pay the tax when due, the taxpayer forfeits any claim to a
deduction [or discount] allowed under Section 151.423 [or Section
151.424 of this code].
SECTION 2.23. Section 151.428(c), Tax Code, is amended to
read as follows:
(c) The reporting, collection, refund, and penalty
provisions of this chapter and Subtitle B of this title apply to the
payments required by this section, except that Section [Sections]
151.423 does [and 151.424 of this code do] not apply to this
section.
SECTION 2.24. Section 152.047(a), Tax Code, is amended to
read as follows:
(a) Except as inconsistent with this chapter and rules
adopted under this chapter, the seller of a motor vehicle shall
report and pay the tax imposed on a seller-financed sale to the
comptroller on the seller's receipts from seller-financed sales in
the same manner as the sales tax is reported and paid by a retailer
under Sections 151.401, 151.402, 151.405, 151.406, 151.409,
151.423, [151.424,] and 151.425.
SECTION 2.25. The heading to Section 162.014, Tax Code, is
amended to read as follows:
Sec. 162.014. OTHER MOTOR FUEL EXCISE OR OCCUPATION TAXES
PROHIBITED.
SECTION 2.26. Subtitle E, Title 2, Tax Code, is amended by
adding Chapter 164 to read as follows:
CHAPTER 164. TAX ON SALE OF GASOLINE OR DIESEL FUEL
Sec. 164.0001. DEFINITIONS. In this chapter:
(1) "Diesel fuel" and "gasoline" have the meanings
assigned by Section 162.001.
(2) "Motor fuel" means diesel fuel or gasoline.
Sec. 164.0002. RULES. The comptroller may adopt rules
necessary for the administration of this chapter.
Sec. 164.0003. SALES TAX IMPOSED. (a) A tax is imposed on
each sale at retail of motor fuel in this state.
(b) The rate of the tax is 6.25 percent of the sales price of
the motor fuel.
Sec. 164.0004. APPLICABILITY OF OTHER LAW. (a) Except as
otherwise provided by this chapter:
(1) the tax imposed by this chapter is administered,
collected, and enforced in the same manner as the tax under Chapter
151 is administered, collected, and enforced; and
(2) Chapter 151 applies to the tax imposed by this
chapter in the same manner as Chapter 151 applies to the tax imposed
under Section 151.051.
(b) The tax imposed by this chapter is in addition to any
other tax imposed by state law.
(c) Motor fuel subject to the tax imposed under this chapter
is exempt from the taxes imposed under Subtitle C, Title 3.
Sec. 164.0005. ALLOCATION OF TAX. The comptroller shall
allocate the net revenue derived from the tax imposed by this
chapter as follows:
(1) 25 percent to the credit of the available school
fund; and
(2) the remainder to the credit of the state highway
fund.
SECTION 2.27. Subtitle E, Title 2, Tax Code, is amended by
adding Chapter 165 to read as follows:
CHAPTER 165. TAX ON E-CIGARETTE VAPOR PRODUCTS
Sec. 165.0001. DEFINITIONS. In this chapter:
(1) "E-cigarette" has the meaning assigned by Section
161.081, Health and Safety Code.
(2) "Vapor product" means a consumable nicotine liquid
solution or other material containing nicotine suitable for use in
an e-cigarette.
Sec. 165.0002. E-CIGARETTE VAPOR PRODUCT SALES TAX. (a) A
tax is imposed on each sale of a vapor product in this state.
(b) The tax rate is 10 cents for each milliliter or
fractional part of a milliliter of vapor product sold.
(c) The tax imposed under this section is in addition to the
tax imposed under Subchapter C, Chapter 151. The tax imposed under
this section does not apply to a sale unless the tax imposed under
Subchapter C, Chapter 151, applies to the sale.
Sec. 165.0003. E-CIGARETTE VAPOR PRODUCT USE TAX. (a) A
tax is imposed on the storage, use, or other consumption in this
state of a vapor product purchased from a retailer for storage, use,
or other consumption in this state.
(b) The tax rate is 10 cents for each milliliter or
fractional part of a milliliter of vapor product stored, used, or
otherwise consumed in this state.
(c) The tax imposed under this section is in addition to the
tax imposed under Subchapter D, Chapter 151. The tax imposed under
this section does not apply to the storage, use, or other
consumption of a vapor product unless the tax imposed under
Subchapter D, Chapter 151, applies to the storage, use, or other
consumption.
Sec. 165.0004. APPLICATION OF OTHER PROVISIONS OF CODE.
(a) Except as provided by this chapter:
(1) the taxes imposed under this chapter are
administered, imposed, collected, and enforced in the same manner
as the taxes under Chapter 151 are administered, imposed,
collected, and enforced; and
(2) the provisions of Chapter 151 applicable to the
sales tax imposed under Subchapter C, Chapter 151, and the use tax
imposed under Subchapter D, Chapter 151, apply to the sales and use
taxes imposed under this chapter.
(b) A change in the law relating to the taxation of the sale
or use of a vapor product under Chapter 151 also applies to the
sales or use tax imposed under this chapter.
Sec. 165.0005. REPORTS. (a) A person required to file a
report under Section 151.403 who is also required to collect or pay
a tax under this chapter shall file with the comptroller a report
stating:
(1) for sales tax purposes, the volume of vapor
products sold by the seller during the reporting period;
(2) for use tax purposes, the volume of vapor products
sold by the retailer during the reporting period for storage, use,
or other consumption in this state;
(3) the volume of vapor products subject to the use tax
that were acquired during the reporting period for storage, use, or
other consumption in this state by a purchaser who did not pay the
tax to a retailer;
(4) the amount of the taxes due under this chapter for
the reporting period; and
(5) any other information required by the comptroller.
(b) The report required by this section for a reporting
period is due on the same date that the tax payment for the period is
due.
Sec. 165.0006. RECORDS. A person required to file a report
under Section 151.403 who is also required to collect or pay a tax
under this chapter shall keep a complete record of:
(1) the volume of vapor products sold in this state
during each reporting period;
(2) the volume of vapor products, including the
constituent parts of vapor products, purchased from every source
during each reporting period;
(3) all sales and use taxes, and any money represented
to be sales or use tax, collected during each reporting period; and
(4) any other information required by the comptroller.
Sec. 165.0007. DISPOSITION OF PROCEEDS. The comptroller
shall deposit the proceeds from taxes imposed under this chapter to
the credit of the general revenue fund.
SECTION 2.28. Section 171.1012, Tax Code, is amended by
adding Subsection (u) to read as follows:
(u) Notwithstanding any other provision of this section, a
taxable entity that employs a professional athlete and that elects
to subtract costs of goods sold may not include the cost to employ
the professional athlete as labor costs when calculating the
entity's costs of goods sold to the extent the amount paid to the
athlete exceeds the limit on wage and cash compensation under
Section 171.1013(c) as applied to the athlete. In this subsection,
"professional athlete" has the meaning assigned by Section 406.095,
Labor Code.
SECTION 2.29. Section 183.043(b), Tax Code, is amended to
read as follows:
(b) Section [Sections] 151.423 does [and 151.424 do] not
apply to the tax imposed by this subchapter.
SECTION 2.30. Section 313.021(2), Tax Code, is amended to
read as follows:
(2) "Qualified property" means:
(A) land:
(i) that is located in an area designated as
a reinvestment zone under Chapter 311 or 312 or as an enterprise
zone under Chapter 2303, Government Code;
(ii) on which a person proposes to
construct a new building or erect or affix a new improvement that
does not exist before the date the person submits a complete
application for a limitation on appraised value under this
subchapter;
(iii) that is not subject to a tax abatement
agreement entered into by a school district under Chapter 312; and
(iv) on which, in connection with the new
building or new improvement described by Subparagraph (ii), the
owner or lessee of, or the holder of another possessory interest in,
the land proposes to:
(a) make a qualified investment in an
amount equal to at least the minimum amount required by Section
313.023; and
(b) create at least 25 new qualifying
jobs;
(B) the new building or other new improvement
described by Paragraph (A)(ii); and
(C) tangible personal property:
(i) that is not subject to a tax abatement
agreement entered into by a school district under Chapter 312; and
(ii) [for which a sales and use tax refund
is not claimed under Section 151.3186; and
[(iii)] except for new equipment described
in Section 151.318(q) or (q-1), that is first placed in service in
the new building, in the newly expanded building, or in or on the
new improvement described by Paragraph (A)(ii), or on the land on
which that new building or new improvement is located, if the
personal property is ancillary and necessary to the business
conducted in that new building or in or on that new improvement.
SECTION 2.31. Section 321.203(n), Tax Code, is amended to
read as follows:
(n) A sale of a service described by Section 151.0047 to
construct, repair, restore, remodel, [repair,] or modify an
improvement to [restore nonresidential] real property is
consummated at the location of the job site.
SECTION 2.32. Section 323.203(m), Tax Code, is amended to
read as follows:
(m) A sale of a service described by Section 151.0047 to
construct, repair, restore, remodel, [repair,] or modify an
improvement to [restore nonresidential] real property is
consummated at the location of the job site.
SECTION 2.33. Subchapter B, Chapter 501, Transportation
Code, is amended by adding Section 501.0301 to read as follows:
Sec. 501.0301. CERTAIN OFF-HIGHWAY VEHICLES PURCHASED
OUTSIDE THIS STATE. (a) In this section:
(1) "Off-highway vehicle" means:
(A) an all-terrain vehicle or recreational
off-highway vehicle, as those terms are defined by Section 502.001;
(B) a motorcycle, as that term is defined by
Section 541.201, other than a motorcycle described by Section
521.001, that is designed by the manufacturer for off-highway use
only; or
(C) a utility vehicle, as that term is defined by
Section 663.001.
(2) "Retailer" has the meaning assigned by Section
151.008, Tax Code.
(b) A county assessor-collector may not issue a title
receipt and the department may not issue a certificate of title for
an off-highway vehicle purchased from a retailer located outside
this state unless the applicant for the title delivers to the
assessor-collector or the department, as applicable, satisfactory
evidence showing that the applicant:
(1) has paid to the comptroller the applicable use tax
imposed on the vehicle under Subchapter D, Chapter 151, Tax Code; or
(2) is not required to pay any taxes described by
Subdivision (1).
SECTION 2.34. Subchapter F, Chapter 502, Transportation
Code, is amended by adding Sections 502.257 and 502.258 to read as
follows:
Sec. 502.257. FEE; ELECTRIC MOTOR VEHICLE. The fee for a
registration year for registration of a motor vehicle that uses
electricity as its only source of motor power is the greater of:
(1) $225; or
(2) the applicable fee under Section 502.253.
Sec. 502.258. FEE; HYBRID MOTOR VEHICLE. (a) In this
section, "hybrid motor vehicle" means a motor vehicle that draws
propulsion energy from both gasoline or conventional diesel fuel
and a rechargeable energy storage system.
(b) The fee for a registration year for registration of a
hybrid motor vehicle is the greater of:
(1) $125; or
(2) the applicable fee under Section 502.253.
SECTION 2.35. The following provisions of the Tax Code are
repealed:
(1) Section 23.1241(b-1);
(2) Section 151.314(h);
(3) Section 151.315;
(4) Section 151.317(c);
(5) Section 151.3186;
(6) Section 151.319;
(7) Section 151.320;
(8) Section 151.335; and
(9) Section 151.424.
SECTION 2.36. Not later than March 1, 2020, a manufacturer
shall submit the first report required by Section 2301.008,
Occupations Code, as added by this article.
SECTION 2.37. This article applies only to ad valorem taxes
imposed for a tax year beginning on or after the effective date of
this Act.
SECTION 2.38. The changes in law made by this article do not
affect tax liability accruing before the effective date of this
Act. That liability continues in effect as if this Act had not been
enacted, and the former law is continued in effect for the
collection of taxes due and for civil and criminal enforcement of
the liability for those taxes.
SECTION 2.39. Section 501.0301, Transportation Code, as
added by this article, applies only to an application for title that
is filed on or after the effective date of this Act. An application
for title that is filed before the effective date of this Act is
governed by the law in effect on the date the application was filed,
and the former law is continued in effect for that purpose.
ARTICLE 3. EFFECTIVE DATE
SECTION 3.01. This Act takes effect January 1, 2020, but
only if the constitutional amendment proposed by the 86th
Legislature, Regular Session, 2019, authorizing the legislature to
exempt from ad valorem taxation by a school district a portion of
the appraised value of an individual's residence homestead in an
amount equal to the lesser of 50 percent of the appraised value of
the residence homestead after all other applicable exemptions for
which the individual has qualified the homestead are applied or 150
percent of the median appraised value of all single-family
residences in the state and authorizing the legislature to exempt
from ad valorem taxation by one or more political subdivisions of
this state inventory held for sale at retail is approved by the
voters. If that constitutional amendment is not approved by the
voters, this Act has no effect.