Bill Text: TX SB1602 | 2011-2012 | 82nd Legislature | Introduced


Bill Title: Relating to the exemption from the sales and use tax for certain agricultural items.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2011-04-07 - Left pending in committee [SB1602 Detail]

Download: Texas-2011-SB1602-Introduced.html
  82R10619 ALL-F
 
  By: Seliger S.B. No. 1602
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the exemption from the sales and use tax for certain
  agricultural items.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter E, Chapter 151, Tax Code, is amended
  by adding Section 151.1551 to read as follows:
         Sec. 151.1551.  EXEMPTION NUMBER REQUIRED FOR CERTAIN
  AGRICULTURAL PROPERTY.  (a)  To qualify for an exemption for an item
  under Section 151.316(a)(3), (6), (7), (10), or (12) or tangible
  personal property under Section 151.316(b), an exemption number
  must be stated on the exemption certificate provided by the
  purchaser.
         (b)  A person is eligible for an exemption number if the
  person owns or operates a business that uses one or more tracts of
  land in this state as a farm or ranch, as those terms are defined by
  Section 151.316(c).
         (c)  A person who is eligible may apply to the comptroller
  for an exemption number. The application must:
               (1)  be on a form prescribed by the comptroller;
               (2)  state the types of crops, livestock, or other
  agricultural products that are held for sale in the regular course
  of the business owned or operated or to be owned or operated by the
  applicant;
               (3)  state the name and address of the business owned or
  operated or to be owned or operated by the applicant; and
               (4)  contain any other information required by the
  comptroller.
         (d)  The comptroller by rule shall develop and implement a
  procedure by which an applicant may submit an application described
  by Subsection (c) electronically.
         (e)  The comptroller by rule shall establish a uniform date
  on which all exemption numbers issued under this section must be
  renewed, regardless of the date on which an exemption number is
  initially issued. The rules must require exemption numbers to be
  renewed every four years.
         (f)  The comptroller, after adequate written notice and a
  hearing, may suspend or revoke the exemption number issued to a
  person who fails to comply with this chapter or with a rule adopted
  under this chapter. At the hearing the person must show cause why
  the person's exemption number should not be suspended or revoked.
         (g)  The comptroller shall give written notice of the
  suspension or revocation of an exemption number under Subsection
  (f) to the person to whom the number was issued.  The notice may be
  personally served on the person or sent by mail to the person's
  address as shown in the comptroller's records.
         (h)  If the comptroller revokes a person's exemption number
  under Subsection (f), the person may not be issued a new exemption
  number unless the comptroller is satisfied that the person will
  comply with this chapter and the rules adopted under this chapter.
  The comptroller may prescribe the terms under which a suspended
  exemption number may be reinstated.
         (i)  A taxpayer may appeal the suspension or revocation of an
  exemption number in the same manner that appeals are made from a
  final deficiency determination.
         (j)  The comptroller by rule shall develop and operate an
  online system to enable a seller of an item or property described by
  Subsection (a) to search and verify the validity of the exemption
  number stated on an exemption certificate at the time the
  certificate is received and to provide documentation of the
  verification. Documentation provided by the system constitutes
  proof that the exemption certificate was received in good faith for
  purposes of Sections 151.054 and 151.104. A seller is not required
  to use the online system.
         SECTION 2.  Section 151.316(a), Tax Code, as amended by
  Chapters 1162 (H.B. 3144) and 1373 (S.B. 958), Acts of the 81st
  Legislature, Regular Session, 2009, is reenacted and amended to
  read as follows:
         (a)  Subject to Section 151.1551, the [The] following items
  are exempted from the taxes imposed by this chapter:
               (1)  horses, mules, and work animals;
               (2)  animal life the products of which ordinarily
  constitute food for human consumption;
               (3)  feed for farm and ranch animals;
               (4)  feed for animals that are held for sale in the
  regular course of business;
               (5)  seeds and annual plants the products of which:
                     (A)  ordinarily constitute food for human
  consumption;
                     (B)  are to be sold in the regular course of
  business; or
                     (C)  are used to produce feed for animals exempted
  by this section;
               (6)  fertilizers, fungicides, insecticides,
  herbicides, defoliants, and desiccants exclusively used or
  employed on a farm or ranch in the production of:
                     (A)  food for human consumption;
                     (B)  feed for animal life; or
                     (C)  other agricultural products to be sold in the
  regular course of business;
               (7)  machinery and equipment exclusively used or
  employed on a farm or ranch in the building or maintaining of roads
  or water facilities or in the production of:
                     (A)  food for human consumption;
                     (B)  grass;
                     (C)  feed for animal life; or
                     (D)  other agricultural products to be sold in the
  regular course of business;
               (8)  machinery and equipment exclusively used in, and
  pollution control equipment required as a result of, the
  processing, packing, or marketing of agricultural products by an
  original producer at a location operated by the original producer
  for processing, packing, or marketing the producer's own products
  if:
                     (A)  50 percent or more of the products processed,
  packed, or marketed at or from the location are produced by the
  original producer and not purchased or acquired from others; and
                     (B)  the producer does not process, pack, or
  market for consideration any agricultural products that belong to
  other persons in an amount greater than five percent of the total
  agricultural products processed, packed, or marketed by the
  producer;
               (9)  ice exclusively used by commercial fishing boats
  in the storing of aquatic species including but not limited to
  shrimp, other crustaceans, finfish, mollusks, and other similar
  creatures;
               (10)  tangible personal property, including a tire,
  sold or used to be installed as a component part of a motor vehicle,
  machinery, or other equipment exclusively used or employed on a
  farm or ranch in the building or maintaining of roads or water
  facilities or in the production of:
                     (A)  food for human consumption;
                     (B)  grass;
                     (C)  feed for animal life; or
                     (D)  other agricultural products to be sold in the
  regular course of business;
               (11)  machinery and equipment exclusively used in an
  agricultural aircraft operation, as defined by 14 C.F.R. Section
  137.3; and
               (12)  tangible personal property incorporated into a
  structure that is used for the disposal of poultry carcasses in
  accordance with Section 26.303, Water Code.
         SECTION 3.  Section 151.316(b), Tax Code, is amended to read
  as follows:
         (b)  Subject to Section 151.1551, tangible [Tangible]
  personal property sold or used to be installed as a component of an
  underground irrigation system is exempt from the taxes imposed by
  this chapter if the system is exclusively used or employed on a farm
  or ranch in the production of:
               (1)  food for human consumption;
               (2)  grass;
               (3)  feed or forage for:
                     (A)  animal life the products of which ordinarily
  constitute food for human consumption; or
                     (B)  horses, mules, and work animals; or
               (4)  other agricultural products to be sold in the
  regular course of business.
         SECTION 4.  Notwithstanding Section 151.1551, Tax Code, as
  added by this Act, a person is not required to state an exemption
  number on an exemption certificate to qualify for an exemption
  under Section 151.316, Tax Code, that is claimed before January 1,
  2012.
         SECTION 5.  The change in law made by this Act does not
  affect tax liability accruing before January 1, 2012. 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 6.  To the extent of any conflict, this Act prevails
  over another Act of the 82nd Legislature, Regular Session, 2011,
  relating to nonsubstantive additions to and corrections in enacted
  codes.
         SECTION 7.  This Act takes effect September 1, 2011.
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