Bill Text: TX SB1038 | 2021-2022 | 87th Legislature | Introduced
Bill Title: Relating to the place of business of a retailer for purposes of municipal sales and use taxes.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2021-03-18 - Referred to Finance [SB1038 Detail]
Download: Texas-2021-SB1038-Introduced.html
87R7697 CJC-F | ||
By: Schwertner | S.B. No. 1038 |
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relating to the place of business of a retailer for purposes of | ||
municipal sales and use taxes. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 321.002(a), Tax Code, is amended by | ||
amending Subdivision (3) and adding Subdivision (4) to read as | ||
follows: | ||
(3)(A) "Place of business of the retailer" means an | ||
established outlet, office, or location operated by the retailer or | ||
the retailer's agent or employee for the purpose of receiving | ||
orders for taxable items and includes any location at which three or | ||
more orders are received by the retailer during a calendar year and | ||
at which at least four primary selling activities occur. A | ||
warehouse, storage yard, or manufacturing plant is not a "place of | ||
business of the retailer" unless at least three orders are received | ||
by the retailer during the calendar year and at least four primary | ||
selling activities occur at the warehouse, storage yard, or | ||
manufacturing plant. | ||
(B) An outlet, office, facility, or any location | ||
that contracts with a retail or commercial business to process for | ||
that business invoices, purchase orders, bills of lading, or other | ||
equivalent records onto which sales tax is added, including an | ||
office operated for the purpose of buying and selling taxable goods | ||
to be used or consumed by the retail or commercial business, is not | ||
a "place of business of the retailer" if the comptroller determines | ||
that the outlet, office, facility, or location functions or exists | ||
to avoid the tax legally due under this chapter or exists solely to | ||
rebate a portion of the tax imposed by this chapter to the | ||
contracting business. An outlet, office, facility, or location | ||
does not exist to avoid the tax legally due under this chapter or | ||
solely to rebate a portion of the tax imposed by this chapter if the | ||
outlet, office, facility, or location provides significant | ||
business services, beyond processing invoices, to the contracting | ||
business, including logistics management, purchasing, inventory | ||
control, or other vital business services. | ||
(C) Notwithstanding any other provision of this | ||
subdivision, a kiosk is not a "place of business of the | ||
retailer." In this subdivision, "kiosk" means a small stand-alone | ||
area or structure that: | ||
(i) is used solely to display merchandise | ||
or to submit orders for taxable items from a data entry device, or | ||
both; | ||
(ii) is located entirely within a location | ||
that is a place of business of another retailer, such as a | ||
department store or shopping mall; and | ||
(iii) at which taxable items are not | ||
available for immediate delivery to a customer. | ||
(4) "Primary selling activity" means: | ||
(A) any of the following actions, if performed by | ||
a retailer or the agent or employee of a retailer: | ||
(i) exercising discretion and independent | ||
authority to solicit customers on behalf of the retailer and to bind | ||
the retailer to a sale; | ||
(ii) taking an action that binds the | ||
retailer to a sale, including accepting a purchase order or | ||
submitting an offer to a buyer that is subject to the buyer's | ||
unilateral acceptance; | ||
(iii) receiving a payment or issuing an | ||
invoice; | ||
(iv) engaging in marketing and solicitation | ||
activities on behalf of the retailer; | ||
(v) procuring goods for sale by the | ||
retailer; | ||
(vi) receiving and accepting purchase | ||
orders or, if the retailer's purchase orders are accepted, | ||
processed, or fulfilled in another location, receiving and | ||
accepting contracts and other documents; | ||
(vii) transferring title to an item to a | ||
buyer; or | ||
(viii) displaying goods for sale to | ||
prospective customers; or | ||
(B) the use of a structure owned or leased by a | ||
retailer to: | ||
(i) store or otherwise hold the retailer's | ||
inventory; | ||
(ii) house the retailer's business | ||
headquarters, meaning the location from which the retailer directs | ||
or manages the retailer's business; or | ||
(iii) provide office space for the | ||
retailer's officers, executives, or other employees who have | ||
authority to set prices and determine the terms of a sale. | ||
SECTION 2. The change in law made by this Act does 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 3. This Act takes effect September 1, 2021. |