Part 1.
COMPTROLLER OF PUBLIC ACCOUNTS
Chapter 3.
TAX ADMINISTRATION
Subchapter O. STATE SALES AND USE TAX
34 TAC §3.316
The Comptroller of Public Accounts proposes an amendment
to §3.316, concerning occasional sales. This section is being amended
to implement House Bill 82, 77th Legislature, 2001. Effective October 1, 2001,
this legislation amended Tax Code, §151.321, to exempt the first $5,000
of a qualified student organization's total receipts from sales of taxable
items in a calendar year if those receipts are not otherwise exempted by Tax
Code, §151.321. This change is reflected in subsection (k)(3) of the
proposed rule. Additional amendments are made for the purpose of clarity.
James LeBas, Chief Revenue Estimator, has determined that for the first
five-year period the rule will be in effect, there will be no significant
fiscal impact on the state or units of local government.
Mr. LeBas also has determined that for each year of the first five years
the rule is in effect, the public benefit anticipated as a result of enforcing
the rule will be in providing taxpayers with additional information regarding
their tax responsibilities. This rule is adopted under the Tax Code, Title
2, and does not require a statement of fiscal implications for small businesses.
There is no significant anticipated economic cost to individuals who are required
to comply with the proposed rule.
Comments on the proposal may be submitted to Bryant K. Lomax, Manager,
Tax Policy Division, P.O. Box 13528, Austin, Texas 78711.
This amendment is proposed under 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
Tax Code, Title 2.
The amendment implements Tax Code, §151.321.
§3.316.Occasional Sales; Joint Ownership Transfers; Sales by Senior Citizens' Organizations; Sales by University and College Student Organizations; and Sales by Nonprofit Animal Shelters.
(a)
Sales exempt.
A
[
(b)
Occasional sales by persons not in the business of selling,
leasing, or renting.
(1)
One or two sales of taxable items, other than an amusement
service, during any 12-month period by a person who does not hold himself
out as
engaged
[
(2)
(No change.)
(3)
The sale of not more than ten admissions for amusement
services during a 12-month period by a person who does not hold himself out
as
engaged
[
(4)
(No change.)
(c)
Persons
who hold
[
(1)
Persons
who hold themselves out as
engaged in
the business of selling, leasing, or renting taxable items and persons
who sell, lease, or rent
[
(2)
Sales
that retailers
[
(3)
Sales
that
[
(d)
Sale of a business or an identifiable segment of a business.
(1)
(No change.)
(2)
The sale of the entire operating assets of a separate division,
branch
,
or identifiable segment of a business is an occasional
sale if, prior to the sale, the income and expenses attributable to the separate
division, branch or identifiable segment could be separately established from
the books of account or record.
(3)
For the purposes of this section, a "separate division,
branch
,
or identifiable segment" means an enterprise engaged in
providing a product or service to customers, usually for a profit. "Income"
means revenue generated by the enterprise in providing that product or service.
"Expenses" mean those operating expenses incurred by the enterprise in providing
the product or services that are directly traceable to that enterprise. "Operating
assets" means tangible personal property used exclusively by the enterprise
in providing the product or service but does not mean tangible personal property
maintained and used both for general business purposes and by the specific
enterprise. Inventory and intangible property are not operating assets for
purposes of the exemption.
(4)
The entire operating assets of the business or of the division,
branch
,
or identifiable segment of the business must be sold in
a single transaction to a single purchaser. The sale of the entire operating
assets through several transactions to several purchasers
does
[
(e)
Transfer without change in ownership.
(1)
(No change.)
(2)
For the purposes of this section, stockholders, bondholders,
partners, or other persons
who hold
[
(3)
"All or substantially all" of the property
is
[
(f)
(No change.)
(g)
Resale certificates--occasional sales--leases.
(1)
When a lessor purchases a taxable item tax free for rental
or lease and later sells, leases
,
or rents the item by way of an
occasional sale as provided in subsection (d) or (e) of this section, then
the lessor owes tax on the amount by which the lessor's purchase price exceeds
the amount of rent, if any, upon which tax has been collected and reported
from the prior rental or lease of the item.
(2)
(No change.)
(h)
Purchases exempt from tax.
The
[
(i)
Exception to subsection (h) of this section. A person who
holds a permit
that is
issued pursuant to [
(j)
Senior citizens' organizations. Sales
that a
[
(1) - (3)
(No change.)
(4)
the
organization has
[
(k)
University and college student organizations.
(1)
A sale of a taxable item by a qualified student organization
is
exempt
[
(A)
the student organization sells the items at a sale that
lasts for one day only
, and
the primary purpose of
the sale
[
(B)
the
student
[
(C)
the
student
[
(D)
the sales price of
the
[
(2)
(No change.)
(3)
The first $5,000 of a qualified student
organization's total receipts from sales of taxable items in a calendar year
that are not exempted under paragraph (1) of this subsection are exempt from
sales tax.
(4)
[
(l)
Sales by religious, educational, charitable organizations,
and organizations classified as 501(c)(3), (4), (8), (10), or (19).
(1)
A religious, educational, charitable, eleemosynary organization,
or an organization exempt under Internal Revenue Code, §501(c)(3), (4),
(8), (10), or (19) that has
been granted exempt status by the comptroller
[
(2) - (3)
(No change.)
(4)
If two or more exempt organizations or chapters jointly
hold a tax-free sale or auction, each is considered to have held a tax-free
sale or auction during that calendar year.
Each exempt organization that
participates in a joint one-day tax-free sale or auction may hold one other
tax-free sale or auction during the remainder of that calendar year.
(m)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State, on December 20, 2001.
TRD-200108192
Martin Cherry
Deputy General Counsel for Taxation
Comptroller of Public Accounts
Earliest possible date of adoption: February 3, 2002
For further information, please call: (512) 463-3699
34 TAC §3.1281
The Comptroller of Public Accounts proposes a new §3.1281,
concerning fireworks tax. This new rule is proposed to implement House Bill
3667, 77th Legislature, 2001, which added Tax Code, Chapter 161. This new
chapter imposes a 2.0% fireworks sales tax on fireworks sold on or after October
1, 2001. The new rule provides important information to taxpayers concerning
the collection and remittance of the fireworks tax.
James LeBas, Chief Revenue Estimator, has determined that for the first
five-year period the rule will be in effect, there will be no significant
fiscal impact on the state or units of local government.
Mr. LeBas also has determined that for each year of the first five years
the rule is in effect, the public benefit anticipated as a result of enforcing
the rule will be in providing taxpayers with additional information regarding
their tax responsibilities. This rule is adopted under the Tax Code, Title
2, and does not require a statement of fiscal implications for small businesses.
There is no significant anticipated economic cost to individuals who are required
to comply with the proposed rule.
Comments on the proposal may be submitted to Bryant K. Lomax, Manager,
Tax Policy Division, P.O. Box 13528, Austin, Texas 78711.
This new rule is proposed under 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
Tax Code, Title 2.
The new rule implements Tax Code, §161.002, and Government Code, §614.075.
§3.1281.Fireworks Tax.
(a)
Definitions. The following words and terms, when used in
this section, shall have the following meanings, unless the context clearly
indicates otherwise.
(1)
Fireworks--Any composition or device that is designed to
produce a visible or audible effect by combustion, explosion, deflagration,
or detonation that is classified as Division 1.4G explosives by the United
States Department of Transportation in 49 C.F.R. Part 173 as of September
1, 1999. Examples of fireworks include items that are commonly known as firecrackers,
bottle rockets, Roman candles, and shooting stars.
(2)
Retail sale--Any sale of fireworks directly to the public.
(b)
Imposition. A 2.0% tax is imposed on the retail sale of
fireworks in Texas. This tax is in addition to state and local sales taxes
that are due on the fireworks. Tax Code, §161.005, directs the comptroller
to allocate the revenue collected under this tax to the rural volunteer fire
department fund that is established under Government Code, §614.075.
The following items are excluded from the fireworks tax, but may be subject
to sales tax:
(1)
a toy pistol, toy cane, toy gun, or other device that uses
a paper or plastic cap;
(2)
a model rocket or model rocket motor that is designed,
sold, and used for the purpose of propelling a recoverable aero model;
(3)
a propelling or expelling charge that consists of a mixture
of sulfur, charcoal, and potassium nitrate;
(4)
a novelty or trick noisemaker;
(5)
a pyrotechnic signaling device or distress signal that
is designed for marine, aviation, or highway use in an emergency situation;
(6)
a fusee or railway torpedo for use by a railroad;
(7)
a blank cartridge that is sold for use in a radio, television,
film, or theater production, for signal or ceremonial purposes in athletic
events, or for industrial purposes; or
(8)
a pyrotechnic device that is sold for use by a military
organization.
(c)
Collection. Each seller must collect the fireworks tax
from the purchaser on the total price of each retail sale of fireworks in
Texas. The fireworks tax is collected in the same manner as sales tax. See §3.286
of this title (relating to Seller's and Purchaser's Responsibilities) for
information on the collection and remittance of sales tax.
(d)
Exemptions.
(1)
No fireworks tax is due on a sale that is exempt from sales
tax.
(2)
A seller who accepts a valid and properly completed resale
or exemption certificate for sales tax is not required to collect the fireworks
tax. All sales that are unsupported by valid resale or exemption certificates
or by other exemption documentation acceptable under the law are considered
to be retail sales, and the seller will be liable for the fireworks tax on
those sales.
(e)
Reports and payments.
(1)
A seller must report and remit fireworks tax on or before
August 20 on sales that occur during the period that begins June 24 and ends
midnight July 4. A seller must report and remit fireworks tax on or before
February 20 on sales that occur during the period that begins December 20
and ends midnight January 1.
(2)
A seller must report and pay the fireworks tax to the comptroller
on forms that the comptroller prescribes. A seller who fails to receive the
correct form from the comptroller is not relieved of the responsibility for
filing a fireworks tax report and for payment of the tax by the due date.
(3)
The penalties and interest that are imposed for failure
to timely file and pay the fireworks tax are the same as those that are imposed
for failure to timely file and pay sales tax. Likewise, the 0.5% discount
for timely filing and payment applies to fireworks tax reports and payments.
No prepayment discount will be allowed for prepayment of the fireworks tax.
See §3.286 of this title.
(f)
Effective date. The fireworks tax is effective October
1, 2001.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State, on December 20, 2001.
TRD-200108193
Martin Cherry
Deputy General Counsel for Taxation
Comptroller of Public Accounts
Earliest possible date of adoption: February 3, 2002
For further information, please call: (512) 463-3699
Subchapter C. APPRAISAL DISTRICT ADMINISTRATION
34 TAC §9.415
The Comptroller of Public Accounts proposes an amendment
to §9.415, concerning applications for property tax exemptions. This
rule is being amended to change model application form for disabled veteran's
or survivor's exemption adopted by reference, in response to House Bill 16,
77th Legislature, 2001, effective September 1, 2001, which allow a late application
by a disabled veteran or survivor under certain conditions. Changes to the
miscellaneous property tax exemptions application form are proposed in response
to House Bill 824, 77th Legislature, 2001, effective January 1, 2002, to add
an exemption for certain nonprofit county fair associations. Changes to the
model application form for exemption of goods exported from Texas are proposed
in response to Senate Bill 862, 77th Legislature, 2001, effective January
1, 2002, which allows a late application. Changes to the property tax abatement
exemption application form are proposed in response to House Bill 1448, 77th
Legislature, 2001, effective September 1, 2001, to allow for a tax abatement
with the owner of a leasehold interest in real property. Changes to the community
housing development organizations improving property for low-income and moderate-income
housing forms are proposed in response to House Bill 1392, 77th Legislature,
2001, effective June 14, 2001, to specify that an exemption, once allowed,
does not need to be claimed annually. Also, House Bill 3383, 77th Legislature,
2001, effective January 1, 2002, changes the requirement for exemption status
of community housing development organizations. Changes to the water conservation
exemption form are proposed in response to Senate Bill 2, 77th Legislature,
2001, effective September 1, 2001, to add an exemption for desalination and
brush control. In addition, the amendment is proposed to adopt a new model
exemption application form for raw cocoa and green coffee held in Harris County,
as provided by Senate Bill 1574, 77th Legislature, 2001, effective January
1, 2002; and to adopt a new model exemption application for certain travel
trailers, as provided by House Bill 2076, 77th Legislature, 2001, effective
January 1, 2002. New language regarding the use of social security number
under the Federal Privacy Act is added to forms that contain a field for reporting
a social security number.
James LeBas, Chief Revenue Estimator, has determined that for the first
five-year period the rule will be in effect, there will be no significant
fiscal impact on the state or units of local government.
Mr. LeBas also has determined that for each year of the first five years
the rule is in effect, the public benefit anticipated as a result of enforcing
the rule will be in providing taxpayers with additional information regarding
their tax responsibilities. There are no fiscal implications for small businesses.
There is no significant anticipated economic cost to individuals who are required
to comply with the proposed rule.
Comments on the proposal may be submitted to Buddy Breivogel, Manager,
Property Tax Division, P.O. Box 13528, Austin, Texas 78711-3528.
This amendment is proposed under Tax Code, §11.43(f), which
requires the comptroller to prescribe the contents and form for each kind
of property tax exemption.
The amendment implements Tax Code, §§11.111, 11.13, 11.14, 11.17,
11.18, 11.181, 11.19, 11.20, 11.21, 11.22, 11.23(a)-(k), 11.24, 11.251, 11.27,
11.271, 11.28, 11.29, 11.30, 11.31, 11.32, 11.33, 11.437, and 11.182.
§9.415.Applications for Property Tax Exemptions.
(a)
With the application for exemption for residence homesteads
(Form 50-114), the appraisal office shall:
(1)
provide a list of taxing units served by the appraisal
district, together with all residential homestead exemptions each offers;
or
(2)
provide the appraisal district's name and appraisal district's
phone number on the form, with an instruction that the property owner may
call the appraisal district to determine what homestead exemptions are offered
by the property owner's taxing units.
(b)
If the chief appraiser learns of the death of a person
qualified for over-65 homestead exemptions (Tax Code, §11.13) and it
appears that the person's spouse has acquired ownership of the homestead,
the chief appraiser should require the surviving spouse to file a new homestead
exemption application. Based on the information provided in the new application,
the chief appraiser shall determine whether the surviving spouse qualifies
for homestead exemptions, including over-65 exemptions, and whether the surviving
spouse may retain the tax ceiling for school tax purposes established on the
homestead by the decedent.
(c)
The model forms in paragraphs
(1)-(23)
[
(1)
Application for Transitional Housing Property Tax Exemption
(Form 50-140);
(2)
Application for Residence Homesteads (Form 50-114);
(3)
Application for Cemetery Exemption (Form 50-120);
(4)
Application for Charitable Organizations (Form 50-115);
(5)
Application(s) for Charitable Organization Providing Low-Income
Housing (Form 50-242 and Form 50-243);
(6)
Application for Youth Spiritual, Mental, and Physical Development
Organizations (Form 50- 118);
(7)
Application for Religious Organizations (Form 50-117);
(8)
Application for Privately Owned Schools (Form 50-119);
(9)
Application for Disabled Veteran's or Survivor's Exemption
(Form 50-135);
(10)
Application for Miscellaneous Property Tax Exemptions
(Form 50-128);
(11)
Application for Theater School Property Tax Exemption
(Form 50-125);
(12)
Application for Historic Sites Property Tax Exemption
(Form 50-122);
(13)
Application for Goods Exported from Texas (freeport exemption)
(Form 50-113);
(14)
Application for Solar and Wind-Powered Energy Device Exemption
(Form 50-123);
(15)
Application for Property Tax Abatement Exemption (Form
50-116);
(16)
Application for Stored Offshore Drilling Rig Exemption
(Form 50-124);
(17)
Application for Dredge Disposal Site Exemption (Form 50-121);
(18)
Application for Nonprofit Water Supply or Wastewater Services
Corporation (Form 50- 214);
(19)
Application for Pollution Control Property (Form 50-248);
(20)
Application for Cotton Stored in a Warehouse (Form 50-245);
(21)
Application(s) for Community Housing Development Organizations
Improving Property for Low-Income and Moderate-Income Housing (Form 50-263
and Form 50-264);
(22)
Application for Water Conservation Initiatives Property
Tax Exemption (Form 50-270); [
(23)
Application for Ambulatory Health Care Center Assistance
Exemption (Form 50- 282)
;
[
(24)
Application for Raw Cocoa
and Green Coffee Held in Harris County (Form 50-297); and
(25)
Travel Trailer Exemption Application
(Form 50-298).
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State, on December 21, 2001.
TRD-200108224
Martin Cherry
Deputy General Counsel for Taxation
Comptroller of Public Accounts
Earliest possible date of adoption: February 3, 2002
For further information, please call: (512) 463-3699
Chapter 53.
CERTIFICATION BY COMPANIES OFFERING QUALIFIED INVESTMENT PRODUCTS
Except as provided by
subsection (i) of this section, a
] taxable item
that is
sold
or purchased by way of an occasional sale is exempt from sales and use taxes
, except as provided by subsection (i) of this section
.
engaging
] (or who does not habitually
engage) in the business of selling taxable items are occasional sales.
engaging
] (or who does not habitually engage)
in the provision of amusement services are occasional sales.
holding
] permits.
selling, leasing, or renting
] three
or more taxable items in a 12-month period are retailers for the purposes
of this section. Also, persons
who sell
[
selling
] more
than
10
[
ten
] admissions for amusement services during
a 12-month period are retailers for the purposes of this section.
made by a retailer
] and other persons
who hold
[
holding
] sales or
use tax permits
make
[
that are not made in the regular course
of business
] are not occasional sales
, even if the sales are not
made in the regular course of business (e.g., a restaurant owner sells a dining
table)
. All sales by a retailer
or permit holder
are subject
to tax
, unless the
[
except for
] sales [
that
]
qualify for exemption under subsection (d) or (e) of this section.
made by
] persons
who hold
[
holding
] direct payment permits
make
are not occasional sales. All sales by direct payment permit holders are subject
to tax
unless the
[
except for
] sales [
that
]
qualify for exemption under subsection (d) or (e) of this section.
will
] not qualify as an occasional sale under this section.
holding
] an interest
in a corporation or other entity are regarded as having the "real or ultimate
ownership" of the property of such corporation or other entity. Ownership
is "substantially similar" if the person
who transfers
[
transferring
] the property owns 80% or more of the stock in the corporation to which
the transfer is being made. Ownership is "substantially similar" if 80% or
more of the stock in the corporation
that makes
[
making
]
the transfer is owned by the transferee.
will be
] considered [
to have been
] transferred if 80%
or more is transferred.
Except
as provided in subsection (i) of this section, the
] purchase price of
an item
that is
sold by means of an occasional sale is not subject
to tax
, except as provided in subsection (i) of this section
.
the
] Tax
Code, Chapter 151,
and
who makes a purchase in a transaction on
which the seller is not required to collect tax under subsection (b) of this
section, must accrue and remit tax to the comptroller on the transaction.
made by
] senior citizens'
organization makes are
[
organizations will be
] exempt from tax if all of the following qualifications
are met:
organizations have
] not conducted more than four separate fund-raising drives each calendar
year for a total of not more than 20 days per year.
exempted
] from sales tax if:
which
] is to raise funds for the organization;
qualifying
] organization
holds not more than one fund-raising sale each calendar month for which the
exemption is claimed;
qualifying
] organization
has as its primary purpose a purpose other than
being engaged
[
engaging
] in business or
performance of
[
performing
] an activity
that is
designed to make a profit; and
a
] taxable
item [
sold
] is $5,000 or less, except that a taxable item
that
[
manufactured by or donated to
] the organization
manufactures or has received by donation
may be sold tax free during
the one-day sale, regardless of sales price,
if
[
provided
] the item is not sold to the donor.
(3)
] A
qualified
[
qualifying
] student organization must be affiliated with an institution
of higher education as defined by Education Code, §61.003, or a private
or independent college or university that is located in this state and that
is accredited by a recognized accrediting agency under Education Code, §61.003.
A student organization must file with the comptroller a certification issued
by the institution, college, or university showing that the organization is
affiliated with the institution, college, or university. A college, university,
or institution may designate one of its departments or officers to compile
a list of registered or certified student organizations and submit the list
to the comptroller in lieu of having each student organization submit individual
certifications. The certification is valid until the institution, university,
or college notifies the comptroller that a student organization is decertified,
suspended, or otherwise loses its campus privileges or affiliation with the
institution, university, or college.
qualified for exemption under this section
], and each bona
fide chapter of
an exempt
[
a qualifying
] organization,
is not required to collect sales tax on the sales price of taxable items sold
for $5000 or less at a sale or auction held by the organization or chapter
only twice a calendar year and each sale or auction lasting only one day.
See §3.322 of this title (relating to Exempt Organizations).
Additionally,
a taxable item may be sold tax free during a one-day tax-free sale or auction,
regardless of price, if the item is
one that the organization manufactured
or has received by donation and the item
[
manufactured by the organization
or donated to the organization and
] is not sold to the donor.
Subchapter NN. FIREWORKS TAX
Chapter 9.
PROPERTY TAX ADMINISTRATION
(1)-(22)
] of this subsection and the new model
forms in paragraphs
(24) and (25)
[
form in paragraph (23)
] of this subsection
are adopted by reference by the Comptroller of Public Accounts. Copies of
these forms are available for inspection at the office of the
Texas Register
or can be obtained from the Comptroller of Public Accounts,
Property Tax Division, P.O. Box 13528, Austin, Texas 78711- 3528. Copies may
also be requested by calling our toll-free number 1-800-252-9121. In Austin,
call (512) 305-9999. From a Telecommunications Device for the Deaf (TDD),
call 1-800-248- 4099, toll free. In Austin, the local TDD number is (512)
463-4621:
and
]
.
]
Part 3.
TEACHER RETIREMENT SYSTEM OF TEXAS