| (3) Local taxing jurisdiction rate increase; partial
exemption for certain contracts and bids. When an existing local taxing
jurisdiction raises its sales and use tax rate, the additional amount
of tax that would be due as a result of the rate increase is not due
on the sale, use, storage, or other consumption in this state of taxable
items used:
(A) for the performance of a written contract executed
prior to the effective date of the tax rate increase if the contract
may not be modified because of the tax; or
(B) pursuant to the obligation of a bid or bids submitted
prior to the effective date of the tax rate increase if the bid or
bids and contract entered into pursuant thereto are at a fixed price
and not subject to withdrawal, change, or modification because of
the tax.
(4) Three-year statute of limitations.
(A) The exemption in paragraph (1) of this subsection
and the partial exemption in paragraph (3) of this subsection have
no effect after three years from the date the adoption or increase
of the tax takes effect in the local taxing jurisdiction.
(B) The provisions of §3.319 of this title apply
to this subsection to the extent they are consistent.
(C) Leases. Any renewal or exercise of an option to
extend the time of a lease or rental contract under the exemptions
provided by this subsection shall be deemed to be a new contract and
no exemption will apply.
(5) Records. Persons claiming the exemption provided
by this subsection must maintain records which can be verified by
the comptroller or the exemption will be lost.
(6) Exemption certificate. An identification number
is required on the prior contract exemption certificates furnished
to sellers. The identification number should be the person's 11-digit
Texas taxpayer number or federal employer's identification (FEI) number.
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