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A BILL TO BE ENTITLED
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AN ACT
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relating to the exemption of certain services performed by certain |
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employees from the sales and use tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 151.057, Tax Code, is transferred to |
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Subchapter H, Chapter 151, Tax Code, redesignated as Section |
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151.3503, Tax Code, and amended to read as follows: |
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Sec. 151.3503 [151.057]. SERVICES BY EMPLOYEES. (a) The |
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following [services] are exempted from the taxes imposed by [not
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taxable under] this chapter: |
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(1) a service performed by an employee for the |
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employee's [his] employer in the regular course of business, within |
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the scope of the employee's duties, and for which the employee is |
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paid [his] regular wages or salary; |
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(2) a service performed by an employee of a temporary |
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employment service [as defined by Section 93.001, Labor Code,] for |
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an employer to supplement the employer's existing work force on a |
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temporary basis, if: |
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(A) [when] the service is normally performed by |
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the employer's own employees; |
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(B) [,] the employer provides all supplies and |
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equipment necessary to perform the service; |
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(C) the employer does not rent, lease, purchase, |
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or otherwise acquire for use the supplies and equipment described |
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by Paragraph (B) from the temporary employment service or an entity |
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that is a member of an affiliated group of which the temporary |
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employment service is also a member; |
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(D) the temporary employment service is not a |
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member of the employer's affiliated group; and |
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(E) [, and] the employee of the temporary |
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employment service [help] is under the [direct or general] |
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supervision of the employer to whom the employee of the temporary |
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employment service [help] is furnished; or |
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(3) a service performed by covered employees of a |
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professional employer organization, either licensed under Chapter |
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91, Labor Code, or exempt from the licensing requirements of that |
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chapter, for a client under a written contract that provides for |
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shared employment responsibilities between the professional |
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employer organization and the client for the covered employees, |
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most of whom must have been previously employed by the client. |
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(b) The comptroller shall prescribe by rule the minimum |
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percentage of covered employees that must have been previously |
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employed by the client, the minimum time period the covered |
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employees must have been employed by the client prior to the |
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commencement of its contract, and such other criteria as the |
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comptroller may deem necessary to properly implement Subsection |
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(a)(3) [this section]. |
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(c) For purposes of this section, an employee of a temporary |
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employment service is under the supervision of an employer if the |
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employer has the sole right to direct and control the employee as |
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necessary to conduct the employer's business or to comply with any |
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licensing, statutory, or regulatory requirement applicable to the |
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employer. |
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(d) In this section: |
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(1) "Affiliated group" has the meaning assigned by |
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Section 171.0001. |
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(2) "Temporary employment service" has the meaning |
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assigned by Section 93.001, Labor Code. |
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SECTION 2. The changes in law made by this Act apply only to |
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a service commenced on or after the effective date of this Act. A |
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service commenced before that date is governed by the law in effect |
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on the date the service was commenced, and the former law is |
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continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2017. |