Bill Text: TX SB1539 | 2017-2018 | 85th Legislature | Comm Sub


Bill Title: Relating to the application of the sales and use tax to certain property and services.

Spectrum: Bipartisan Bill

Status: (Engrossed - Dead) 2017-05-26 - House appoints conferees-reported [SB1539 Detail]

Download: Texas-2017-SB1539-Comm_Sub.html
  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.
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