86R11371 GRM-F
By: Sanford H.B. No. 3787
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) an admission or ticket to an amusement service.
(c) "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 or a taxable service to a purchaser who acquires
the property or service for the purpose of transferring it as an
integral part of performing a contract, or a subcontract of a
contract, for the sale of tangible personal property 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 or service 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
any 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 a service not listed as a taxable
service under Section 151.0101 [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 151.302, Tax Code, is amended by adding
Subsection (b-1) to read as follows:
(b-1) A taxable service used to perform a taxable service is
not considered resold unless the purchaser acquires the service for
the purpose of transferring it as an integral part of performing a
taxable service.
SECTION 5. 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 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; and
(2) the charge for the labor is itemized separately
from the charge for materials furnished.
(b) The exemption provided by Subsection (a) does not apply
to the charge for materials furnished by the service provider to the
purchaser as part of the service.
(c) Sixty-five percent of a lump-sum charge for labor and
materials to repair, remodel, maintain, or restore tangible
personal property is exempted from the taxes imposed by this
chapter if:
(1) the repair, remodeling, maintenance, or
restoration is required under the circumstances described by
Subsection (a)(1); and
(2) the labor and materials are purchased for a health
care facility, as defined by Section 108.002, Health and Safety
Code, or for an oncology center.
SECTION 6. Section 151.335, Tax Code, is repealed.
SECTION 7. 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 8. 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 October 1, 2019.