By: Kolkhorst S.B. No. 745
(Murphy)
A BILL TO BE ENTITLED
AN ACT
relating to the exemption of certain services performed by certain
employees from the sales and use tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 151.057, Tax Code, is transferred to
Subchapter H, Chapter 151, Tax Code, redesignated as Section
151.3503, Tax Code, and amended to read as follows:
Sec. 151.3503 [151.057]. SERVICES BY EMPLOYEES. (a) The
following [services] are exempted from the taxes imposed by [not
taxable under] this chapter:
(1) a service performed by an employee for the
employee's [his] employer in the regular course of business, within
the scope of the employee's duties, and for which the employee is
paid [his] regular wages or salary;
(2) a service performed by an employee of a temporary
employment service [as defined by Section 93.001, Labor Code,] for
a host [an] employer to supplement the host employer's existing
work force on a temporary basis, if:
(A) [when] the service is normally performed by
the host employer's own employees;
(B) [,] the host employer provides all supplies
and equipment necessary to perform the service, other than personal
protective equipment provided by the temporary employment service
pursuant to a federal law or regulation;
(C) the host employer does not rent, lease,
purchase, or otherwise acquire for use the supplies and equipment
described by Paragraph (B), other than the personal protective
equipment described by that paragraph, from the temporary
employment service or an entity that is a member of an affiliated
group of which the temporary employment service is also a member;
[,] and
(D) the host employer has the sole right to
supervise, direct, and control the work performed by the employee
of the temporary employment service as necessary to conduct the
host employer's business or to comply with any licensing,
statutory, or regulatory requirement applicable to the host [help
is under the direct or general supervision of the] employer [to whom
the help is furnished]; or
(3) a service performed by covered employees of a
professional employer organization, either licensed under Chapter
91, Labor Code, or exempt from the licensing requirements of that
chapter, for a client under a written contract that provides for
shared employment responsibilities between the professional
employer organization and the client for the covered employees,
most of whom must have been previously employed by the client.
(b) The comptroller shall prescribe by rule the minimum
percentage of covered employees that must have been previously
employed by the client, the minimum time period the covered
employees must have been employed by the client prior to the
commencement of its contract, and such other criteria as the
comptroller may deem necessary to properly implement Subsection
(a)(3) [this section].
(c) In this section:
(1) "Affiliated group" has the meaning assigned by
Section 171.0001.
(2) "Host employer" means the employer who owns,
manages, or controls the property or worksite where an employee of a
temporary employment service performs a service.
(3) "Temporary employment service" has the meaning
assigned by Section 93.001, Labor Code.
SECTION 2. The changes in law made by this Act apply only to
a service commenced on or after the effective date of this Act. A
service commenced before that date is governed by the law in effect
on the date the service was commenced, and the former law is
continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2017.