HB 1540

This bill provides that t here is exempt from the sales and use tax the sale of the following items of tangible personal property, if the materials are sold to a teacher employed in this state by a local education agency (LEA) or public charter school:  School supplies with a sales price of $100 or less per item .  School art supplies with a sales price of $100 or less per item .  School instructional materials with a sales price of $100 or less per item. However, this bill clarifies that such exemption does not include c lothing , c omputers , c omputer software , v ideo game consoles , a ny item for personal use outside the classroom , or a ny item for use in a trade or business. This bill requires each retailer making exempt sales under this bill to report the amount of such sales to the commissioner of revenue on the retailer's sales and use tax returns. This bill provides that a discount by the retailer reduces the sales price of the property , and the discounted sales price determines whether the sales price is within a price threshold described above . A coupon that reduces the sales price is treated as a discount if the retailer is not reimbursed for the coupon amount by a third party. If a discount applies to the total amount paid by a purchaser, rather than to the sales price of a particular item , and the purchaser has purchased both eligible propert y and taxable property, then the retailer must allocate the discount based on the total sales price of the taxable property compared to the total sales price of all property sold in that same transaction . Additionally, i tems that are normally sold as a single unit must continue to be sold in that manner. Such articles cannot be priced separately and sold as individual items in order to obtain the exemption. This bill requires a teacher employed by a local education agency (LEA) or public charter school who is seeking the exemption to submit an application for exemption to the commissioner of revenue, providing proof of employment in this state as a teacher by a local education agency or public charter school. The application must be submitted on forms prescribed by the commissioner. If the exemption is approved by the commissioner, then this bill requires the department of revenue to issue a sales and use tax exemption certificate to the applicant that declares that the applicant is a teacher entitled to the exemption. This bill requires a teacher who has obtained an exemption certificate issued by the department to provide a retailer with a copy of the certificate of exemption, which must include the exemption account number included on the certificate issued by the commissioner. The retailer must maintain a copy of such exemption in the retailer's records to document that the purchaser was entitled to the exemption. "TEACHER"" DEFINED As used in this bill, a ""teacher"" m eans an individual who holds a license to teach issued by the state board of education and who spends 50% or more of the individual's time on the job instructing students in class, or through other instructional methods such as online instruction . However, the term does not include licensed individuals, including licensed support personnel, administrators, or supervisors, if the licensed individual spends less than 50% of the individual's time on the job instructing students."