S.B. No. 745
  relating to the exemption of certain services performed by certain
  employees from the sales and use tax.
         SECTION 1.  Section 151.057, Tax Code, is transferred to
  Subchapter H, Chapter 151, Tax Code, redesignated as Section
  151.3503, Tax Code, and amended to read as follows:
         Sec. 151.3503 [151.057].  SERVICES BY EMPLOYEES.  (a)  The
  following [services] are exempted from the taxes imposed by [not
  taxable under] this chapter:
               (1)  a service performed by an employee for the
  employee's [his] employer in the regular course of business, within
  the scope of the employee's duties, and for which the employee is
  paid [his] regular wages or salary;
               (2)  a service performed by an employee of a temporary
  employment service [as defined by Section 93.001, Labor Code,] for
  a host [an] employer to supplement the host employer's existing
  work force on a temporary basis, if:
                     (A)  [when] the service is normally performed by
  the host employer's own employees;
                     (B)  [,] the host employer provides all supplies
  and equipment necessary to perform the service, other than personal
  protective equipment provided by the temporary employment service
  pursuant to a federal law or regulation;
                     (C)  the host employer does not rent, lease,
  purchase, or otherwise acquire for use the supplies and equipment
  described by Paragraph (B), other than the personal protective
  equipment described by that paragraph, from the temporary
  employment service or an entity that is a member of an affiliated
  group of which the temporary employment service is also a member; 
  [,] and
                     (D)  the host employer has the sole right to
  supervise, direct, and control the work performed by the employee
  of the temporary employment service as necessary to conduct the
  host employer's business or to comply with any licensing,
  statutory, or regulatory requirement applicable to the host [help
  is under the direct or general supervision of the] employer [to whom
  the help is furnished]; or
               (3)  a service performed by covered employees of a
  professional employer organization, either licensed under Chapter
  91, Labor Code, or exempt from the licensing requirements of that
  chapter, for a client under a written contract that provides for
  shared employment responsibilities between the professional
  employer organization and the client for the covered employees,
  most of whom must have been previously employed by the client.
         (b)  The comptroller shall prescribe by rule the minimum
  percentage of covered employees that must have been previously
  employed by the client, the minimum time period the covered
  employees must have been employed by the client prior to the
  commencement of its contract, and such other criteria as the
  comptroller may deem necessary to properly implement Subsection
  (a)(3) [this section].
         (c)  In this section:
               (1)  "Affiliated group" has the meaning assigned by
  Section 171.0001.
               (2)  "Host employer" means the employer who owns,
  manages, or controls the property or worksite where an employee of a
  temporary employment service performs a service.
               (3)  "Temporary employment service" has the meaning
  assigned by Section 93.001, Labor Code.
         SECTION 2.  The changes in law made by this Act apply only to
  a service commenced on or after the effective date of this Act. A
  service commenced before that date is governed by the law in effect
  on the date the service was commenced, and the former law is
  continued in effect for that purpose.
         SECTION 3.  This Act takes effect September 1, 2017.
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
         I hereby certify that S.B. No. 745 passed the Senate on
  April 3, 2017, by the following vote:  Yeas 31, Nays 0.
  Secretary of the Senate    
         I hereby certify that S.B. No. 745 passed the House on
  May 24, 2017, by the following vote:  Yeas 146, Nays 0, two
  present not voting.
  Chief Clerk of the House