Bill Text: TX HB2153 | 2019-2020 | 86th Legislature | Engrossed


Bill Title: Relating to a single local use tax rate as an alternative to combined local use tax rates for computing the amount of local use taxes remote sellers are required to collect and to the allocation of tax revenue collected at that rate.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Engrossed) 2019-04-24 - Considered in public hearing [HB2153 Detail]

Download: Texas-2019-HB2153-Engrossed.html
  86R19842 BEF-F
 
  By: Burrows H.B. No. 2153
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to a single local use tax rate as an alternative to
  combined local use tax rates for computing the amount of local use
  taxes remote sellers are required to collect and to the allocation
  of tax revenue collected at that rate.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The purpose of this Act is to provide an
  optional, simplified means of computing the amount of local use tax
  remote sellers are required to collect following the decision of
  the United States Supreme Court in South Dakota v. Wayfair, Inc.,
  138 S. Ct. 2080 (2018).
         SECTION 2.  Subchapter C, Chapter 151, Tax Code, is amended
  by adding Section 151.0595 to read as follows:
         Sec. 151.0595.  SINGLE LOCAL TAX RATE FOR REMOTE SELLERS.
  (a)  In this section, "remote seller" means a seller whose only
  activities in this state are described by Section 151.107(a)(4) or
  (5).
         (b)  A remote seller required to collect and remit one or
  more local use taxes in connection with a sale of a taxable item
  made by the remote seller shall compute the amount to collect and
  remit using:
               (1)  the combined rate of all applicable local use
  taxes authorized or governed by Title 3; or
               (2)  at the remote seller's election, the single local
  use tax rate published in the Texas Register as required by
  Subsection (d).
         (c)  A remote seller who elects under Subsection (b)(2) to
  use the single local use tax rate shall notify the comptroller of
  the election before using that rate. The election applies to all
  sales of taxable items made by the remote seller unless the remote
  seller revokes the election by notifying the comptroller. Notice to
  the comptroller under this subsection must be in the form and manner
  provided by the comptroller.
         (d)  The single local use tax rate effective in a calendar
  year is equal to the estimated average rate of local sales and use
  taxes imposed in this state during the preceding state fiscal year,
  as determined under Subsection (e). Before the beginning of a
  calendar year, the comptroller shall publish in the Texas Register
  notice of the single local use tax rate that will be in effect for
  that calendar year.
         (e)  As soon as practicable after the end of a state fiscal
  year, the comptroller shall determine the estimated average rate of
  local sales and use taxes imposed in this state during the preceding
  state fiscal year by:
               (1)  dividing the total amount of net local sales and
  use taxes remitted to the comptroller under this section and Title 3
  during that state fiscal year by the total amount of net state sales
  and use taxes remitted to the comptroller under this chapter during
  that state fiscal year;
               (2)  multiplying the amount computed under Subdivision
  (1) by the rate provided by Section 151.051; and
               (3)  rounding the amount computed under Subdivision (2)
  to the nearest .0025.
         (f)  Notwithstanding Section 111.104(b), a purchaser may
  annually apply for a refund of any amount by which the amount of use
  tax computed using the rate described by Subsection (b)(2) and paid
  by the purchaser exceeds the amount the purchaser would have paid if
  that tax had been computed using the rate described by Subsection
  (b)(1).  The comptroller may adopt rules regarding the procedure
  and proof required for the refund.
         (g)  A person storing, using, or consuming in this state a
  taxable item purchased from a remote seller is not liable for any
  additional amount of local use tax authorized or governed by Title 3
  if the remote seller elects under Subsection (b)(2) to use the
  single local use tax rate and the person pays to the remote seller
  the amount of local use tax computed on the purchase using the
  single local use tax rate.
         (h)  The comptroller shall administer, collect, and enforce
  local use taxes computed using the single local use tax rate.
         (i)  The comptroller shall apportion and distribute revenue
  from local use taxes computed using the single local use tax rate as
  provided by Section 403.107, Government Code.
         (j)  The comptroller may adopt rules to administer this
  section.
         SECTION 3.  Section 403.107, Government Code, is reenacted
  and amended to read as follows:
         Sec. 403.107.  SINGLE LOCAL USE TAXES COLLECTED BY REMOTE
  SELLERS [SALES AND USE TAX FEES].  (a)  The comptroller shall
  deposit revenue remitted to the comptroller from taxes computed
  using the single local use tax rate under Section 151.0595(b)(2)
  [fees imposed under Section 151.059], Tax Code, in the state
  treasury and shall keep records of the amount of money deposited
  [collected] for each reporting period. Money deposited under this
  subsection [Such fees] shall be held in trust for the benefit of
  eligible taxing units, as determined under Subsection (b) [in the
  suspense account of each eligible taxing unit]. The comptroller
  shall distribute money held in trust [in the suspense accounts]
  under this section to each eligible taxing unit in the amount and
  manner provided by [federal law or] this section.
         (b)  A local taxing unit is an eligible taxing unit for
  purposes of [to receive funds under] this section if it has adopted
  a sales and use tax authorized or governed by Title 3, Tax Code
  [under Chapter 321, Chapter 322, or Chapter 323, Tax Code, or has
  adopted a local sales and use tax governed in part by any provision
  of those chapters].
         (c)  Subject to Subsection (d), the [The] comptroller shall
  transmit to each eligible taxing unit's treasurer, or to the
  officer performing the functions of that office, on a monthly
  [quarterly] basis, the taxing unit's share of money held in trust
  under Subsection (a) [the fees remitted to the comptroller],
  together with the pro rata share of any penalty or interest on
  delinquent taxes computed using the single local use tax rate
  [fees] that may be collected. Before transmitting the funds, the
  comptroller shall deduct two percent of [the amount allocated to]
  each taxing unit's share [unit] as a charge by the state for its
  services under this section and deposit that amount into the state
  treasury to the credit of the comptroller's operating fund.
  Interest earned on all deposits made in the state treasury under
  this section shall be credited to the general revenue fund.
         (d)  The comptroller shall retain [in the suspense account
  for a taxing unit] a portion of each eligible [the] taxing unit's
  share of money held in trust under Subsection (a) [the fees
  collected], not to exceed five percent of the amount eligible to be
  transmitted [remitted] to the taxing unit under Subsection (c).
  From the amounts retained [in a taxing unit's suspense account],
  the comptroller may make refunds for overpayments of taxes computed
  using the single local use tax rate, make refunds to purchasers as
  provided by Section 151.0595(f), Tax Code, and [to the account and
  to] redeem dishonored checks and drafts deposited under Subsection
  (a) [to the credit of the account].
         (e)  The [Unless another method is required by federal law,
  the] comptroller shall compute for each calendar month [quarter]
  the percentage of the total sales and use tax allocations made
  pursuant to Title 3, [of the] Tax Code, including any local sales
  and use taxes governed by any provision of Title 3, [of the] Tax
  Code, to each eligible taxing unit.  The comptroller shall
  determine each eligible taxing unit's share of the money held in
  trust from deposits under Subsection (a) for that month by applying
  the percentage computed under this subsection for the eligible
  taxing unit [and shall apply that percentage] to the total amount
  held in trust from deposits for that month [fees collected under
  Section 151.059, Tax Code, and allocated to eligible taxing units
  in that quarter].
         (f)  The comptroller may combine an eligible taxing unit's
  share of the money held in trust under Subsection (a) [fees remitted
  or collected under Section 151.059, Tax Code, a suspense account
  under this section, or an allocation made under this section] with
  other money [trust or suspense accounts] held for that taxing unit
  [or other allocations made to that taxing unit under Title 3 of the
  Tax Code].
         (g)  The comptroller may adopt rules to administer this
  section.
         SECTION 4.  Sections 151.059 and 151.107(c), Tax Code, as
  added by Chapter 291 (H.B. 2215), Acts of the 71st Legislature,
  Regular Session, 1989, are repealed.
         SECTION 5.  The changes in law made by this Act do not affect
  tax liability accruing before the effective date of this Act. That
  liability continues in effect as if this Act had not been enacted,
  and the former law is continued in effect for the collection of
  taxes due and for civil and criminal enforcement of the liability
  for those taxes.
         SECTION 6.  (a)  This Act does not require a remote seller,
  as defined by Section 151.0595, Tax Code, as added by this Act, to
  collect local use taxes on sales of taxable items made before
  October 1, 2019.
         (b)  Notwithstanding Section 151.0595(d), Tax Code, as added
  by this Act, the single local use tax rate in effect for the period
  beginning October 1, 2019, and ending December 31, 2019, is 1.75
  percent.
         SECTION 7.  This Act takes effect October 1, 2019.
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