34 Tex. Admin. Code § 3.353 - Sales Tax Holiday - Certain Emergency Preparation Supplies

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Emergency preparation item--

(A) A portable generator used to provide light or communications or to preserve perishable food in the event of a power outage, the sales price of which is less than $3,000;

(B) a storm protection device manufactured, rated, and marketed specifically to prevent damage to a glazed or non-glazed opening during a storm, the sales price of which is less than $300;

(C) an emergency or rescue ladder, such as a collapsible or chain ladder designed to hang from a window sill, the sales price of which is less than $300; or

(D) an item listed in this subparagraph, the sales price of which is less than $75:

(i) a reusable or artificial ice product;

(ii) a portable, self-powered light source;

(iii) a gasoline or diesel fuel container;

(iv) a AAA cell, AA cell, C cell, D cell, 6 volt, or 9 volt battery, or a package containing more than one battery, other than an automobile or boat battery;

(v) a nonelectric cooler or ice chest for food storage;

(vi) a tarpaulin or other flexible waterproof sheeting; (vii) a ground anchor system or tie-down kit;

(viii) a mobile telephone battery or battery charger;

(ix) a portable self-powered radio, including a two-way radio or weatherband radio;

(x) a fire extinguisher, smoke detector, or carbon monoxide detector;

(xi) a hatchet or axe;

(xii) a self-contained first aid kit; or (xiii) a nonelectric can opener.

(2) Exemption period--The period beginning at 12:01 a.m. on the Saturday before the last Monday in April and ending at 12 midnight on the last Monday in April.

(3) Layaway sales--A transaction in which merchandise is set aside for future delivery to a customer who makes a deposit, agrees to pay the balance of the purchase price over a period of time, and, at the end of the payment period, receives the merchandise.

(4) Rain check--A document assuring that a person can take advantage of a sale or special offer made by a seller at a later time if the item offered is not available.

(b) Exempt sales.

(1) Sales or use tax is not due on the sale of an emergency preparation item during the exemption period.

(2) Any person can purchase emergency preparation items tax-free during the exemption period. There is no limit to the number of emergency preparation items one person can purchase tax-free during the exemption period. An exemption or resale certificate is not required to purchase an emergency preparation item tax-free during the exemption period.

(3) The exemption applies to each emergency preparation item sold during the exemption period, regardless of how many emergency preparation items are sold on the same invoice. For example, a person can purchase two generators with a sales price of $2,500 each, even though the total price on the invoice exceeds $3,000.

(4) Emergency preparation items may be rented or leased tax-free, including under a "rent to own" contract, if the rental or lease contract is executed during the exemption period. Extensions or renewals of rental or lease contracts do not qualify for the exemption unless executed during the exemption period.

(c) Taxable sales. The exemption under this section does not apply to:

(1) tangible personal property that is not an emergency preparation item, as that term is defined in subsection (a)(1) of this section, for example, camp stoves, camping supplies, chainsaws, extension ladders, step-ladders, plywood, tents, or automobile or boat batteries;

(2) a portable generator with a sales price of $3,000 or more;

(3) a storm protection device or emergency or rescue ladder with a sales price of $300 or more;

(4) any item listed in subsection (a)(1)(D) of this section with a sales price of $75 or more;

(5) repair or replacement parts for an emergency preparation item that do not otherwise qualify for exemption; or

(6) services performed on or related to emergency preparation items as well as warranty plans and extended protection plans. For example, repair services for an eligible portable generator are taxable as the repair of tangible personal property. See § 3.292 of this title (relating to Repair, Remodeling, Maintenance, and Restoration of Tangible Personal Property) for more information.

(d) Sales of pre-packaged combinations containing both exempt and taxable items.

(1) When an emergency preparation item is sold together in a pre-packaged combination with an item that is not eligible for the exemption described in subsection (b) of this section, the full price of the pre-packaged combination is subject to sales tax, unless the price of the emergency preparation item is separately stated. For example, a portable generator and a portable cooking device sold as a set for a single price is taxable regardless of the price of the generator or the package. A separately-stated charge for the portable generator is eligible for the sales tax exemption during the exemption period if the sales price of the portable generator is less than $3,000.

(2) When an emergency preparation item is sold in a pre-packaged combination that contains as a free gift an item that is not eligible for the exemption described in subsection (b) of this section, the emergency preparation item may qualify for the exemption under this section if the price of the set is the same as the price of the emergency preparation item sold separately. For example, a portable generator with a sales price of less than $3,000 may be sold in a package with a free extension cord. If the price of the set is the same as the price of the portable generator sold separately, the product that is being sold is the portable generator, which is exempt from tax if sold during the exemption period. See § 3.301 of this title (relating to Promotional Plans, Coupons, Retailer Reimbursement) for additional information on the seller's tax responsibility for the free item.

(e) Sales price. Whether an item described in subsection (a)(1) of this section satisfies the definition of an emergency supply item, and can be purchased tax-free during the exemption period, depends upon the sales price of the item.

(1) Delivery or shipping and handling charges. Delivery or shipping and handling charges are included as part of the total sales price of an item of tangible personal property, regardless of whether the charges are separately stated.

(A) The addition of delivery or shipping and handling charges to the price of an item may result in the item no longer qualifying as an emergency preparation item. For example, a portable generator with a sales price of $2,999 is eligible for the exemption during the exemption period. A generator that sells for $2,999 and is delivered for a charge of $25, for a total sales price of $3,024, does not qualify as an emergency preparation item and sales tax is due on the total sales price of $3,024, even if the sale occurs during the exemption period.

(B) Delivery or shipping and handling charges which are part of the sales price of an exempt item are exempt so long as the total charge does not exceed the limits set forth in this exemption. For example, a portable generator with a sales price of $1,999 and delivery charge of $50, for a total sales price of $2,049, is eligible for the exemption during the exemption period. The total sales price of $2,049, is exempt.

(2) Discounts. A seller may offer discounts to reduce the sales price of an item described in subsection (a)(1) of this section in order to qualify the item as an emergency preparation item. When a discount is given during the exemption period to reduce the sales price of an item described in subsection (a)(1) of this section, the item can qualify as an emergency preparation item based on the reduced sales price.

(3) Coupons. When sellers accept a coupon as a part of the sales price of any item of tangible personal property, the value of the coupon is excluded from the sales price as a cash discount, regardless of whether the seller is reimbursed for the amount that the coupon represents. When a coupon is used during the exemption period to reduce the sales price of an item described in subsection (a)(1) of this section, the item can qualify as an emergency preparation item based on the reduced sales price.

(4) Buy one, get one free or for a reduced price. The total price of an item that is advertised as "buy one, get one free," or "buy one, get one for a reduced price," cannot be averaged across two items in order for both to qualify for the exemption under this section as emergency preparation items. For example, an emergency rescue ladder with a sales price of $400 that is advertised as buy one, get one free does not qualify as an emergency preparation item based on the sales price even though the purchaser is receiving two emergency rescue ladders and the average sales price of each would be $200.

(5) Rebates. Rebates that are paid to a purchaser after the exemption period do not affect the sales price of an item purchased for purposes of determining whether an item qualifies for exemption under this section. The full amount of the sales price, before the rebate, is used to determine whether an item meets the definition of an emergency preparation item.

(f) Layaway sales and purchases by means other than in person.

(1) The sale of an emergency preparation item under a layaway plan or purchased by mail, telephone, email, Internet, custom order, or any other means other than in person qualifies for exemption when either:

(A) the purchaser places on layaway the emergency preparation item during the exemption period and the seller accepts the order for immediate delivery upon full payment, even if delivery is made after the exemption period;

(B) the purchaser places the order and the seller accepts the order during the exemption period for immediate shipment, even if delivery is made after the exemption period; or

(C) final payment on the layaway order is made by, and the merchandise is given to, the purchaser during the exemption period.

(2) For purposes of this subsection, the seller accepts an order when the seller has taken action to fill the order for immediate shipment. Actions to fill an order include placement of an "in date" stamp on a mail order, or assignment of an "order number" to a telephone order. An order is for immediate shipment notwithstanding that the shipment may be delayed because of a backlog of orders or because stock is currently unavailable to, or on back order by, the seller.

(g) Rain checks. Emergency preparation items purchased during the exemption period with use of a rain check qualify for the exemption regardless of when the rain check was issued. The issuance of a rain check during the exemption period will not qualify an emergency preparation item for the exemption if the item is purchased after the exemption period.

(h) Exchanges.

(1) Tax is not due on an emergency preparation item purchased during the exemption period but exchanged, after the exemption period ends, for an emergency preparation item of equal or lesser value.

(2) Tax is due on the difference in sales price of an emergency preparation item purchased during the exemption period but exchanged, after the exemption period ends, for another emergency preparation item of greater value that would qualify for exemption if purchased during the exemption period.

(i) Returned merchandise. For a 30-day period after the temporary exemption period, when a customer returns an emergency preparation item that would qualify for the exemption, no credit for or refund of sales tax shall be given unless the customer provides a receipt or invoice that shows tax was paid, or the seller has sufficient documentation to show that tax was paid on the specific item.

(1) This 30-day period begins the Tuesday immediately following the end of the exemption period and ends 30 calendar days later with no exclusions for weekend days or holidays.

(2) This 30-day period is set solely for the purpose of designating a time period during which the purchaser must provide documentation that shows that sales tax was paid on returned merchandise. The 30-day period is not intended to change a seller's policy on the time period during which the seller will accept returns.

(j) Documenting exempt sales. A seller is not required to obtain an exemption certificate on sales of eligible items during the exemption period; however, the seller's records should clearly identify the type of item sold, the date on which the item was sold, and the sales price of each exempt item sold.

Notes

34 Tex. Admin. Code § 3.353

The provisions of this §3.353 adopted to be effective April 21, 2016, 41 TexReg 2772.