85R24416 CJC-F
	By: Watson	S.B. No. 1539
	(Bohac)
	Substitute the following for S.B. No. 1539:  No.

	A BILL TO BE ENTITLED
	AN ACT
	relating to the application of the sales and use tax to certain
	property and services.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 151.0028, Tax Code, is amended by
	amending Subsection (b) and adding Subsection (c) to read as
	follows:
	(b)  "Amusement services" includes:
	(1)  membership in a private club or organization that
	provides entertainment, recreational, sports, dining, or social
	facilities to its members; and
	(2)  the purchase of an admission to an amusement
	service through the use of a coin-operated machine.
	(c)  Except as provided by Subsection (b), "amusement
	services" does not include services provided through coin-operated
	machines that are operated by the consumer.
	SECTION 2.  Section 151.0045, Tax Code, is amended to read as
	follows:
	Sec. 151.0045.  "PERSONAL SERVICES". "Personal services"
	means those personal services listed as personal services under
	Group 721, Major Group 72 of the Standard Industrial Classification
	Manual, 1972, and includes massage parlors, escort services, and
	Turkish baths under Group 729 of said manual but does not include
	any other services listed under Group 729 unless otherwise covered
	under this chapter [Act], prepared by the statistical policy
	division of the office on management and budget, office of the
	president of the United States. The term does not include services
	provided through coin-operated machines that are operated by the
	consumer.
	SECTION 3.  Section 151.006, Tax Code, is amended by
	amending Subsections (a) and (c) and adding Subsection (e) 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 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 an entity or
	organization exempted from the taxes imposed by this chapter under
	Section 151.309 or 151.310 [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 exempt
	entity or organization [federal government] under the contract and
	applicable [federal] acquisition regulations.
	(c)  A sale for resale does not include the sale of tangible
	personal property or a taxable service to a purchaser who acquires
	the property or service for the purpose of performing a contract, or
	a subcontract of a contract, for services with an entity or
	organization exempted from the taxes imposed by this chapter under
	Section 151.309 or 151.310 [service that is not taxed under this
	chapter], regardless of whether title transfers to the service
	provider's customer, unless the tangible personal property or
	taxable service is purchased for the purpose of reselling it to the
	United States in a contract, or a subcontract of a contract, with
	any branch of the Department of Defense, Department of Homeland
	Security, Department of Energy, National Aeronautics and Space
	Administration, Central Intelligence Agency, National Security
	Agency, National Oceanic and Atmospheric Administration, or
	National Reconnaissance Office to the extent allocated and billed
	to the contract with the federal government.
	(e)  A sale for resale does not include the sale of tangible
	personal property to a purchaser who acquires the property for the
	purpose of using, consuming, or expending it in, or incorporating
	it into, an oil or gas well in the performance of an oil well service
	taxable under Chapter 191.
	SECTION 4.  Section 151.338, Tax Code, is amended to read as
	follows:
	Sec. 151.338.  ENVIRONMENT AND CONSERVATION SERVICES. (a)
	Subject to Subsections (b) and (c), labor to [The services involved
	in the] repair, remodel, maintain, or restore [remodeling,
	maintenance, or restoration of] tangible personal property is
	exempted from the taxes imposed by [are not taxable under] this
	chapter if:
	(1)  the amount of the charge for labor is separately
	itemized; and
	(2)  the repair, remodeling, maintenance, or
	restoration is required by statute, ordinance, order, rule, or
	regulation of any commission, agency, court, or political,
	governmental, or quasi-governmental entity in order to protect the
	environment or to conserve energy.
	(b)  Except as provided by Subsection (c), the exemption
	provided by this section does not apply to tangible personal
	property transferred by the service provider to the purchaser as
	part of the service.
	(c)  If the purchaser is a health care facility, as defined
	by Section 108.002, Health and Safety Code, or an oncology center,
	or if the purchase is made on behalf of an oncology center, and the
	amount of the charge for labor is not separately itemized as
	required by Subsection (a)(1), there is exempted from the taxes
	imposed by this chapter 65 percent of the total lump-sum charge for
	labor and tangible personal property transferred by the service
	provider to the purchaser for the repair, remodeling, maintenance,
	or restoration of tangible personal property if the repair,
	remodeling, maintenance, or restoration is required under the
	circumstances described by Subsection (a)(2).
	SECTION 5.  Section 151.335, Tax Code, is repealed.
	SECTION 6.  The amendments made by this Act are a
	clarification of existing law and do not imply that existing law may
	be construed as inconsistent with the law as amended by this Act.
	SECTION 7.  This Act takes effect immediately if it receives
	a vote of two-thirds of all the members elected to each house, as
	provided by Section 39, Article III, Texas Constitution.  If this
	Act does not receive the vote necessary for immediate effect, this
	Act takes effect September 1, 2017.