Texas House Bill HB2319

Texas 2009 - 81st Regular

• Out of House Committee: 5/11/09

Caption

Relating to the treatment of certain exempt organizations as agents of suppliers or distributors of taxable items for purposes of the sales and use tax.

Impact

The bill primarily affects the sales tax structure in Texas by providing a clear framework for fundraising sales, allowing qualified organizations, such as nonprofits, certain tax exemptions that facilitate easier fundraising efforts. It makes it possible for these groups to engage in fundraising without the typical tax burdens, thereby potentially increasing their revenue capacities. This change is significant for many organizations reliant on fundraising sales to support their missions, reinforcing their operational viability.

Summary

House Bill 2319 addresses the sales tax implications of fundraising sales conducted by qualified organizations in Texas. The bill amends the Tax Code to clarify how qualified organizations can manage sales activities aimed at fundraising. Under this bill, these organizations can hold tax-exempt sales for items under a specific sales price, contingent upon certain conditions related to the nature and duration of the sale. It emphasizes that these organizations can conduct sales for no longer than 14 consecutive days and simplifies the process for them to sell taxable items without incurring sales tax.

Contention

The legislative discussion surrounding HB2319 was centered on balancing tax exemptions for fundraising while ensuring that such provisions do not lead to unintended loopholes for commercial entities. Some lawmakers expressed concerns that broader access to tax exemptions might be exploited by groups not primarily focused on fundraising, leading to unfair competitive advantages against taxable retailers. The bill's language attempts to mitigate these concerns by defining 'qualified organizations' and their fundraising activities more rigorously, ensuring clarity in the types of entities that benefit from these tax exemptions.