Beginning September 1, 2007, payphone providers will
no longer pay sales tax on their coin revenue in Texas. This is due to
the passage of HB 1459 by the Texas Legislature earlier this year.
The bill was sponsored by TPA. Following is an update on the
implementation of the bill.
Last month, the legal staff at the
State Comptroller’s office conducted an internal meeting to discuss
implementation of all legislation passed in the 80th session of the
Texas Legislature that affects state sales tax. TPA has confirmed with
the Comptroller’s staff that HB 1459, which removes payphone coin
revenue from the sales tax base, will be implemented in normal fashion,
i.e.:
1. The Comptroller will change
its rules to eliminate those provisions that require payphone
providers to pay sales tax on their coin revenue. The rule change is
now in the process of being drafted.
2. Following drafting, the rule
change will be forwarded to the Comptroller’s legal division for
approval to be published in the Texas Register.
3. The rule will be published in
the Texas Register probably sometime in late September.
The public will have 30 days to comment.
4. Following the comment period,
the rule change will be approved by the Comptroller - probably in
November.
All of the above is a formal
process that has to be followed by all state agencies when changing any
rule published by the agency. Nonetheless, the content of HB 1459
becomes effective September 1 regardless of when the rule is changed.
However, it is important to get the rule changed as soon as possible -
and correctly.
The Comptroller’s staff has agreed to contact TPA
when the rule is sent to the Texas Register for
publication. As a formality, we will probably file brief comments
stating that we agree with the rule change. We will keep you informed.
Please call if you have any questions. And once again, congratulations
on passing this bill!!!