TITLE public-finance

Part I. Comptroller of Public Accounts

Chapter 3. Tax Administration

Subchapter N. County Sales and Use Tax

34 TAC §3.251

The Comptroller of Public Accounts adopts an amendment to §3.251, concerning adopting or abolishing county tax, without changes to the proposed text as published in the February 20, 1998, issue of the Texas Register (23 TexReg 1515).

House Bill 92, 75th Legislature, 1997, amended the Local Government Code effective September 1, 1997, by adding Chapter 334 and Chapter 335 concerning sports and community venue projects and districts. The amendment explains that the notification requirements, effective dates, and contested election provisions in §3.251 apply to an election to impose sales and use tax for a sports and community venue project that increases a county tax rate.

The amendment also replaces all references to Texas Civil Statutes, Articles 1118x or 1118y with references to the Transportation Code, Chapters 451 or 452. The provisions in Articles 1118x and 1118y have been recodified in the Transportation Code.

No comments were received regarding adoption of the amendment.

This amendment is adopted under the Tax Code, §111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2.

The amendment implements acts by the 75th Legislature, 1997, amending the Local Government Code.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 1, 1998.

TRD-9810390

Martin Cherry

Chief, General Law

Comptroller of Public Accounts

Effective date: July 21, 1998

Proposal publication date: February 20, 1998

For further information, please call: (512) 463-4062


Subchapter O. State Sales and Use Tax

34 TAC §3.285

The Comptroller of Public Accounts adopts an amendment to §3.285, concerning resale certificate; sales for resale, without changes to the proposed text as published in the February 20, 1998, issue of the Texas Register (23 TexReg 1515).

The Tax Code was amended effective October 1, 1997, by adding §151.154(f) as a clarification. The amendment clarifies that a retailer is liable for sales tax on the original purchase price of a taxable item if the retailer purchases the taxable item tax free for resale and then uses the taxable item as a trade-in on the purchase of another taxable item.

No comments were received regarding adoption of the amendment.

This amendment is adopted under the Tax Code, §111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2.

The amendment implements the acts of the 75th Legislature, 1997, amending the Tax Code, §151.154.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 6, 1998.

TRD-9810617

Martin Cherry

Chief, General Law

Comptroller of Public Accounts

Effective date: July 26, 1998

Proposal publication date: February 20, 1998

For further information, please call: (512) 463-4062


34 TAC §3.298

The Comptroller of Public Accounts adopts an amendment to §3.298, concerning amusement services, with changes to the proposed text as published in the February 20, 1998, issue of the Texas Register (23 TexReg 1516).

The Tax Code was amended effective October 1, 1997, to add §151.432, concerning the deduction of tax on a ticket or admission document to an amusement service. The amendment allows resellers of tickets or admission documents to amusement services to deduct from reported taxable sales the adjusted value of tickets purchased from non-permitted purchasers provided the tickets or admission documents had the tax included.

Non-substantive grammatical corrections were made in subsections (a)(1)(A)(vii), (a)(1)(D)(xv), and (i)(3)(A).

No comments were received regarding adoption of the amendment.

This amendment is adopted under the Tax Code, §111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2.

The amendment implements acts by the 75th Legislature, 1997, amending the Tax Code by adding §151.432, effective October 1, 1997.

§3.298.Amusement Services.

(a)

Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1)

Amusement services - Entertainment, recreation, sport, pastime, diversion, or enjoyment that is a pleasurable occupation of the senses. Amusement services and places offering amusement services include, but are not limited to, the following:

(A)

live or recorded performances, whether by individual ticket or by season tickets:

(i)

ballet performances;

(ii)

circuses;

(iii)

ice skating shows;

(iv)

motion pictures;

(v)

musical concerts;

(vi)

opera performances;

(vii)

outdoor theatres; and

(viii)

theatres (movies and plays);

(B)

exhibitions or displays:

(i)

animal shows (contests, exhibitions);

(ii)

antique shows;

(iii)

aquatic shows;

(iv)

arts and crafts, and art shows (fairs);

(v)

auto shows;

(vi)

museums (displaying art objects, wax figures, antique autos, etc.); and

(vii)

zoos;

(C)

spectator sports:

(i)

dragstrip operation;

(ii)

horse shows (horse riding exhibitions);

(iii)

motorcycle races;

(iv)

automobile races (full size and miniature cars);

(v)

rodeo;

(vi)

sporting events such as football, baseball, basketball, hockey, and soccer games; and

(vii)

wrestling, boxing, or arm wrestling;

(D)

participatory sports or games:

(i)

athletic clubs;

(ii)

bowling games;

(iii)

court fees - tennis, racketball, handball, etc.;

(iv)

domino games (including by the hour);

(v)

go-cart raceways;

(vi)

golf courses;

(vii)

golf driving ranges;

(viii)

health clubs (spas), (admissions and memberships);

(ix)

miniature golf courses;

(x)

chartered boat or party boat excursions (see paragraph (2) of this subsection for excursions of more than one day duration and for excursions on which fishing guide services are provided);

(xi)

pool (billiards) games (by the game or by the hour);

(xii)

skate board tracks;

(xiii)

skating rinks (roller skating and ice skating);

(xiv)

swimming pools;

(xv)

water slides; and

(xvi)

physical fitness centers;

(E)

fairs or carnivals:

(i)

amusement parks;

(ii)

carnivals;

(iii)

fairs;

(iv)

games of skill, at circus, carnival, etc.;

(v)

shooting galleries (ranges); and

(vi)

side shows;

(F)

other:

(i)

except as provided by subsection (e)(4) of this section, cover charges (for admission to night clubs, dance halls, discos, etc., providing dancing, music, or other entertainment);

(ii)

hot tub concessions;

(iii)

parties (New Year's Eve) sponsored by radio stations, hotels, etc. Ticket price includes meal, set-ups, entertainment, party favors;

(iv)

rides for pleasure (in hot-air balloons, helicopters, trains, ships, boats, etc.);

(v)

tour trains and buses, whose primary purpose is to show tourist sights along a route as opposed to regular transportation;

(vi)

tours of tourist attractions, such as ships, buildings, and monuments, and natural wonders such as caves and caverns; and

(vii)

palm reading, fortune telling, and astrological chart preparation;

(G)

country clubs and other private clubs and organizations that provide entertainment, recreation, sports, dining, or social facilities to members.

(2)

Nonamusement services - Activities which are primarily instructional in nature or nontaxable personal services. Places, services, and clubs not covered by the tax on amusement services include, but are not limited to:

(A)

hobby clubs (stamp collecting clubs, toastmaster clubs, camera clubs, amateur radio clubs);

(B)

instructions for any sport or musical discipline;

(C)

camps for children (day camps or boarding camps);

(D)

video cassette clubs;

(E)

political fundraisers;

(F)

campground admissions;

(G)

cruises which last longer than 24 hours and extend offshore outside Texas territorial limits;

(H)

fishing and hunting leases and guide services; and

(I)

membership in sororities and fraternities.

(3)

Occasional sale - The sale of not more than 10 admissions for amusement services during a 12- month period by a person who does not hold himself out as engaging, or does not habitually engage, in the selling of amusement services.

(4)

Provider of an amusement service - The person who has legal rights of ownership over or the legal right to provide, present, or offer an amusement, entertainment, or recreation that is rendered on a regular basis at a fixed location and for which admissions are sold, such as the owner of the wax figure display at a wax museum. The provider of an amusement service is also the person who has legal rights of ownership to an amusement, entertainment, or recreation that will not be rendered on a regular basis at a fixed location and for which amusement service admissions will be sold, such as the provider of a one-night live performance by a singer. A provider of an amusement service may be, but is not always, the owner of the facility (land and/or building) at which the amusement service is offered or performed. A provider of an amusement service may gain the right of providing an amusement service by virtue of a contract or agreement (lease, rental, concession right) with the performer(s) of the entertainment or with a facility owner when the use of that facility constitutes the amusement service. Terms used within the amusements industry to refer to a provider include manager, promoter, concessionaire, tenant, or association (or club) president.

(5)

Sales price of an amusement service - The fee charged for admission to an amusement, including a convenience fee, handling charge, service charge, or other amount over and above the amount that would be charged for an amusement admission at the ticket counter of the facility at which the amusement service will be rendered. Also included are dues, initiation fees, and other charges, assessments, and fees required for a special privilege, status, or membership classification in a private club or organization. Receipts subject to tax under the Texas Alcoholic Beverage Code, §202.02, are not included in the sales price of an amusement service.

(6)

Sales price of membership to country clubs, including clubs described by the Internal Revenue Code of 1986, §501(c)(7) - The sales price includes dues, initiation fees, and other charges, assessments, and fees required for a special privilege, status, or membership classification in a private club or organization. Whether or not the club has its own facilities is not relevant. Receipts subject to tax under the Texas Alcoholic Beverage Code, §202.02, are not included in the sales price of an amusement service.

(7)

Seller of admissions to amusement services - A person who sells more than ten admissions to amusement services during a 12-month period and includes those persons who hold themselves out as engaging, or who habitually engage, in the selling of admissions to amusement services.

(8)

Sale of an amusement service admission - The transfer of title to or possession of a ticket or other admission document for a consideration or the collection of an admission, membership, or enrollment fee, whether by individual performance, subscription series, or membership privilege, or through the use of a coin-operated or credit-card-operated machine. The consideration paid may secure the admission privilege for an individual or a group of individuals. The contract or agreement whereby the right is secured for a provider to offer an amusement, recreation, or entertainment as an amusement service is not the sale of an admission to an amusement service and is not subject to sales tax, such as the paying of a fee to a singer for a performance that will be provided by the payer of the fee as an amusement service through the sales of tickets.

(b)

Charges to private club members and guests. The membership dues, initiation fees, and other assessments and fees charged for a special privilege, status, or membership classification in a private club or organization, including organizations described by the Internal Revenue Code of 1986, §501(c)(7), if the organizations provide amusements, are taxable. Taxable fees for special privileges in the organization include, but are not limited to, liquor pool dues, boat slip rental fees, golf cart storage fees, locker rental fees, locker room use fees, and fees for access to the restaurant and bar. Separate charges for amusement services by persons operating clubs or other facilities over and above amounts received for membership or initiation fees, such as green fees or fees for admissions to swimming pools, racketball courts, or tennis courts, are also taxable. Initiation fees which are refundable, as evidenced by a written agreement, are not taxable.

(c)

Entry fees. Entry fees will not be taxable as amusements if:

(1)

the fee substantially exceeds what would normally be paid for using the facility and a person is paying to compete in a contest, and part of the fee goes toward the cost of conducting the contest and for prizes; or

(2)

an individual would not normally use the facility, or pay a fee except for the purpose of participating in a contest.

(d)

Travel agencies.

(1)

Tickets to amusements sold by travel agencies as part of a travel package are taxable only if:

(A)

the price of the ticket is separately stated from the price for the remainder of the package; or

(B)

though not separately stated, the surrounding additional costs are inconsequential.

(2)

If the sales tax is not required to be collected by the travel agency, sales tax must be paid at the time the travel agency purchases the tickets originally.

(e)

Imposition of tax.

(1)

Sales tax is due on the sale of an admission to an amusement service if the event or location of the service is within the State of Texas. Sales tax is also due on admissions to gambling ships that operate outside Texas waters if they depart from and return to Texas ports. Sales tax is not due on the sale of an admission to an amusement service if the event or location of the service is outside Texas.

(2)

Use tax is due on an out-of-state sale of an admission to an amusement event that will take place in Texas.

(3)

When there is a sale of an amusement service which does not involve the transfer of a ticket or other physical evidence of admission, possession of or title to the admission is to be regarded as taking place at the seller's place of business. An example would be when admission is secured by a reservation made by the seller for the purchaser.

(4)

Sales or use tax is not due on cover charges which are taxable under the Texas Alcoholic Beverage Code, §202.02.

(f)

Taxable item sold or transferred with amusement service.

(1)

Sellers of service may issue a resale certificate in lieu of tax to suppliers of tangible personal property only if care, custody, and control of the property is transferred to the client. For example, a taxpayer purchases padlocks to transfer to customers when lockers are rented. The padlock is transferred to customers, and the customers use the padlock when renting the locker. Taxpayer may purchase the padlock tax free by issuing a resale certificate. Tax is due on the total amount charged the customer, including amounts for the padlock and for the services.

(2)

A resale certificate may be issued for a service if the buyer intends to transfer the service as an integral part of taxable services. A service will be considered an integral part of a taxable service if the service purchased is essential to the performance of the taxable service and without which the taxable service could not be rendered.

(3)

A resale certificate may be issued for a taxable service if the buyer intends to incorporate the service into tangible personal property which will be resold. If the entire service is not incorporated into the tangible personal property, it will be presumed the service is subject to tax and the service will only be exempt to the extent the buyer can establish the portion of the service actually incorporated into the tangible personal property. If the buyer does not intend to incorporate the entire service into the tangible personal property, no resale certificate may be issued, but credit may be claimed at the time of sale of the tangible personal property to the extent the service was actually incorporated into the tangible personal property.

(4)

Any item, such as machinery or equipment, purchased to be used in the providing of an amusement service is not an item transferred with an amusement service and is subject to sales tax.

(5)

A reseller of a ticket or admission document to an amusement service may deduct from taxable sales reported the "adjusted value" of the ticket or admission document purchased for resale from a non-permitted purchaser of the ticket or admission document. The "adjusted value" is the face value of the ticket or admission document, less the included sales tax. A reseller is allowed the deduction from taxable sales when filing a sales tax report if all of the following criteria are met:

(A)

the sales tax was paid by the purchaser and the purchaser does not hold a Texas Sales and Use Tax Permit;

(B)

the language on the ticket or admission document purchased for resale states that all taxes have been included in the price of the ticket or admission document;

(C)

the ticket or admission document for which a deduction is claimed was not purchased tax-free by use of a resale or exemption certificate; and

(D)

the ticket or admission document is actually resold.

(g)

Exemptions.

(1)

Sales tax is not due on the sale of an amusement service if the service is provided exclusively:

(A)

by a nonprofit organization, corporation, or association, other than organizations described by the Internal Revenue Code of 1986, §501(c)(7), if the proceeds do not go to the benefit of an individual, except as a part of the services of a purely public charity. Initiation and membership fees and other assorted fees charged by such a nonprofit organization, corporation, or association are not taxable. Examples would include: organizations, corporations, or associations recognized as nonprofit organizations under the Internal Revenue Code, §501(c), Kiwanis clubs, labor unions, and ex-students organizations. Organizations described by the Internal Revenue Code of 1986, §501(c)(7), that provide amusements, do not qualify for this exemption even though organized as nonprofit organizations;

(B)

by a nonprofit corporation organized under the laws of this state for the purpose of encouraging agriculture by the maintenance of public fairs and exhibitions;

(C)

by an educational, religious, law enforcement, or charitable association or organization as long as no part of the proceeds goes to the benefit of a private individual;

(D)

by the United States, the State of Texas, a municipality, county, school district, special district, or other political subdivision of the State of Texas. An amusement service is not "exclusively provided" by a governmental entity if the entity contracts with an entity not listed in the Tax Code, §151.3101(a)(1), for the provision of the amusement;

(E)

in a place that is included in the National Register of Historic Places; or

(F)

in a place that is designated as a Recorded Texas Historic Landmark by the Texas Historical Commission.

(2)

Sales tax is not due on the sale of an amusement service by a ticket service, ticket agent, ticket outlet, or any other seller of amusement services when the provider of the amusement service is exempt as set forth in paragraph (1) of this subsection.

(3)

Except as provided by subsection (h) of this section, a nonprofit group may hire a for- profit organization to provide the expertise to produce an event without loss of the exemption provided by paragraph (1)(A) of this subsection. The nonprofit organization must hold itself out as the provider of the amusement and may not be a joint venturer with the for-profit entity.

(4)

Amusement services provided through coin-operated machines that are operated by the consumer are exempt from sales tax. The coin used to operate the machine may be a token as well as a United States coin. Examples are coin-operated:

(A)

pinball machines;

(B)

video games and motion pictures;

(C)

pool tables;

(D)

televisions;

(E)

shuffleboard;

(F)

jukeboxes; and

(G)

batting cages.

(5)

Sales tax is not due on the occasional sale of an amusement service.

(6)

Sales tax is not due on the purchase of an amusement service by an exempt entity for its own amusement or for the amusement of its members. See §3.322 of this title (relating to Exempt Organizations). The seller must secure a valid exemption certificate.

(7)

Sales tax is not due on the purchase of the admission to an activity which may be classified as an amusement, entertainment, or recreation if purchased under a written prescription of a licensed practitioner of the healing arts for the primary purpose of health maintenance or improvement. The written prescription must specify the type of the treatment needed. If a membership privilege is purchased pursuant to a written prescription, a new prescription must be obtained each time the membership is renewed.

(h)

Governmental entities.

(1)

Entities recognized as governmental entities are subject to the provisions of this subsection even though the entities may also be classified under the Tax Code, §151.3101(a)(3), (4), or (5).

(2)

Unless an event is solely for educational purposes, this state, an institution owned or operated by the state, an agency of this state, city, county, school district, special district, political subdivision of this state, or the United States that contracts with a person, a for-profit organization, or any other organization not listed in the Tax Code, §151.3101(a)(1), to provide the expertise to produce or provide a musical concert or other amusement event loses the exemption provided in subsection (g) of this section. These organizations must collect sales tax on admissions to amusement events provided by or in conjunction with a person, a for-profit organization, or other organizations not listed in the Tax Code, §151.3101(a)(1).

(3)

An amusement is not solely for educational purposes unless either: 100% of the proceeds from the admissions go to the educational organization; or students at the educational institution actually perform the amusement.

(i)

Collection of the tax.

(1)

Persons who sell admissions to an amusement service for resale may accept a resale certificate from the purchaser of the amusement in lieu of tax. The resale certificate will cover all convenience fees, handling charges, service charges, etc., added to the sales price of the admission by promoters, ticket services, and others.

(2)

Each seller of amusement services selling to the final consumer must collect and remit the tax to the comptroller on the total receipts from all taxable sales. A seller will be responsible for remitting the correct amount of tax based on the total sales price of admissions including any charges added by others.

(3)

The comptroller may regard any seller of an admission to an amusement service as the agent of the person from whom he obtains the tickets or other admission document if the comptroller determines that the tax will be collected more efficiently. The seller of an admission to amusement service will be regarded as agent if:

(A)

the person providing the tickets or other admission documents obtains written authorization from the comptroller to assume responsibility for the tax collection of his agent;

(B)

the person providing the tickets includes in the sales price of the admission any convenience fee, handling charge, etc., added on by his agent; and

(C)

the provider of the tickets gives to the seller/agent a written statement that the provider holds a tax permit issued by the comptroller and is assuming responsibility for tax collection and reporting for his agent.

(j)

Records. Every seller of admissions to amusement services is responsible for keeping accurate records of all sales and purchases. See §3.281 of this title (relating to Records Required; Information Required). Every seller of admissions to amusement services must hold a sales tax permit and must file reports as required by §3.286 of this title (relating to Seller's and Purchaser's Responsibilities). A reseller of a ticket or admission document to an amusement service that is deducting the "adjusted value" of the ticket or admission document purchased for resale from a non-permitted purchaser, as provided in subsection (f)(5) of this section, must have records verifying the deduction that include:

(1)

the name and address of the non-permitted purchaser;

(2)

the face value of any ticket or admission document purchased by a non-permitted purchaser;

(3)

proof (such as a copy of the ticket or admission document) showing that sales tax is included in the price of the ticket or admission document;

(4)

the sales of tickets or admission documents; and

(5)

the remaining inventory of unsold tickets or admission documents.

(k)

Local tax. City, county, transit authority, and special purpose district tax should be allocated to the city, county, transit authority, and/or special purpose district where the amusement event occurred.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 6, 1998.

TRD-9810616

Martin Cherry

Chief, General Law

Comptroller of Public Accounts

Effective date: July 26, 1998

Proposal publication date: February 20, 1998

For further information, please call: (512) 463-4062


Subchapter P. Municipal Sales and Use Tax

34 TAC §3.372

The Comptroller of Public Accounts adopts an amendment to §3.372, concerning adopting, increasing, decreasing, or abolishing city tax, without changes to the proposed text as published in the February 20, 1998, issue of the Texas Register (23 TexReg 1518).

House Bill 92, 75th Legislature, 1997, amended the Local Government Code effective September 1, 1997, by adding Chapter 334 and Chapter 335 concerning sports and community venue projects and districts. The amendment explains that the notification requirements, effective dates, and contested election provisions in §3.372 apply to an election to impose sales and use tax for a sports and community venue project that increases a city tax rate or that reduces a tax rate for industrial development to allow the imposition of the tax for the sports and community venue project within the 2.0% cap on local taxes.

The amendment also replaces all references to Texas Civil Statutes, Articles 1118x, 1118y, or 1118z with references to the Transportation Code, Chapters 451, 452, or 453. The provisions in Articles 1118x, 1118y, and 1118z have been recodified in the Transportation Code.

No comments were received regarding adoption of the amendment.

This amendment is adopted under the Tax Code, §111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2.

The amendment implements acts by the 75th Legislature, 1997, amending the Local Government Code.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 1, 1998.

TRD-9810391

Martin Cherry

Chief, General Law

Comptroller of Public Accounts

Effective date: July 21, 1998

Proposal publication date: February 20, 1998

For further information, please call: (512) 463-4062


Subchapter R. Transit Sales and Use Tax

34 TAC §3.422

The Comptroller of Public Accounts adopts an amendment to §3.422, concerning adopting, increasing, decreasing, or abolishing transit (MTA) tax, without changes to the proposed text as published in the February 20, 1998, issue of the Texas Register (23 TexReg 1519).

House Bill 92, 75th Legislature, 1997, amended the Local Government Code effective September 1, 1997, by adding Chapter 334 and Chapter 335 concerning sports and community venue projects and districts. The amendment explains that the notification requirements, effective dates, and contested election provisions in §3.422 apply to an election to impose sales and use tax for a sports and community venue project that reduces a transit tax rate.

The amendment also replaces all references to Texas Civil Statutes, Articles 1118x, 1118y, or 1118z with references to the Transportation Code, Chapters 451, 452, or 453. The provisions in Articles 1118x, 1118y, and 1118z have been recodified in the Transportation Code.

No comments were received regarding adoption of the amendment.

This amendment is adopted under the Tax Code, §111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2.

The amendment implements acts by the 75th Legislature, 1997, amending the Local Government Code.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 1, 1998.

TRD-9810392

Martin Cherry

Chief, General Law

Comptroller of Public Accounts

Effective date: July 21, 1998

Proposal publication date: February 20, 1998

For further information, please call: (512) 463-4062


Subchapter II. Telecommunications Infrastructure Fund Assessment

34 TAC §§3.1101-3.1103

The Comptroller of Public Accounts adopts the repeal of §§3.1101-3.1103, concerning the telecommunications infrastructure fund, without changes to the proposed text as published in the April 3, 1998, issue of the Texas Register (23 TexReg 3421).

The comptroller has determined the consolidation of sections dealing with similar subject matter will benefit taxpayers by providing a more effective means of obtaining information. These sections are being repealed in order to simplify the consolidation of related sections into a single section. The new §3.1101, concerning telecommunications receipts, assessment determination, due date for assessment report and payment, auditing, records, and assessments, includes the substance of the current §3.1101, concerning due date for assessment report and payment, the substance of the current §3.1102, concerning telecommunications receipts and assessment determination, and the substance of the current §3.1103, concerning auditing, records, and assessments.

No comments were received regarding adoption of the repeals.

These repeals are adopted under the Tax Code, §111.002 and §111.0022, which provide the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions assigned the comptroller by law.

The repeals implement the Texas Utility Code, §§57.041, 57.042, 57.043, and 57.048.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 1, 1998.

TRD-9810388

Martin Cherry

Chief, General Law

Comptroller of Public Accounts

Effective date: July 21, 1998

Proposal publication date: April 3, 1998

For further information, please call: (512) 463-4062


34 TAC §3.1101

The Comptroller of Public Accounts adopts a new §3.1101, concerning telecommunications receipts, assessment determination, due date for assessment report and payment, auditing, records, and assessments, without changes to the proposed text as published in the April 3, 1998, issue of the Texas Register (23 TexReg 3421).

The Public Utility Regulatory Act of 1995, Title III, §3.606 (Texas Civil Statutes, Article 1446c-0), was amended in Senate Bill 249, 75th Legislature, 1997, to impose a Telecommunications Infrastructure Fund (TIF) Assessment at a rate of 1.25%. The Public Utility Regulatory Act of 1995 was recodified in Senate Bill 1751, 75th Legislature, 1997, into the Utilities Code, Title 2, titled the Public Utility Regulatory Act, in a nonsubstantive recodification. The Utility Code, Title 2, §§57.041-57.051, deal with the Telecommunications Infrastructure Fund. The assessment is on sales taxable telecommunications revenue from both telecommunications utilities and commercial mobile service providers. Information regarding telecommunications receipts, reporting due dates, penalty for late filing, interest rates, and audits is moved from §§3.1101-3.1103 of this title (relating to Due Date for Assessment Report and Payment, Telecommunications Receipts and Assessment Determination, and Auditing, Records, Assessments) which are proposed for repeal. Senate Bill 862 redefined "Telephone Prepaid Calling Cards" as tangible personal property and excluded them from the definition of telecommunications services effective September 1, 1997. Accordingly, subsection (a)(9) defining "Telecommunications Utility" excludes sales of telephone prepaid calling cards made after September 1, 1997.

No comments were received regarding adoption of the new section.

This new section is adopted under the Tax Code, §111.002 and §111.0022, which provide the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions assigned the comptroller by law.

The new section implements the Public Utility Regulatory Act, §§57.041-57.051.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 1, 1998.

TRD-9810389

Martin Cherry

Chief, General Law

Comptroller of Public Accounts

Effective date: July 21, 1998

Proposal publication date: April 3, 1998

For further information, please call: (512) 463-4062