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Relating to the application of the sales and use tax to certain property and services.
No fiscal implication to the State is anticipated.
The "sale for resale" sales tax exemption is typically granted to a taxpayer who is purchasing products to be resold to the final consumer, who ultimately pays the sales tax.
SB 1525 would clarify that "sale for resale" under the Limited Sales, Excise, and Use Tax includes tangible personal property or a taxable service to a purchaser who acquires the property or service for the purpose of transferring it for the sale of tangible personal property with a governmental entity or a religious, education, or public service organization exempted from the sales tax only if the purchaser allocates and bills the cost of the property or service as a direct or indirect cost and transfers title to the property to the exempt entity under the contract. In simpler terms, taxable items integral to the performance of a contract with a non-profit organization or governmental entity may be purchased tax-free for resale.
This bill would also repeal the sales and use tax exemption for amusement and personal services provided through coin-operated machines that are operated by the consumer.
Texas Action remains neutral on SB 1525 because it does not affect our liberty principles.
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