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A BILL TO BE ENTITLED
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AN ACT
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relating to the location at which certain sales are consummated for |
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purposes of local sales and use taxes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 321.002(a)(3)(A), Tax Code, is amended |
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to read as follows: |
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(A) "Place of business of the retailer" means an |
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established outlet, office, or location operated by the retailer or |
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the retailer's agent or employee for the purpose of receiving |
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orders for taxable items and includes any location at which three or |
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more orders are received by the retailer during a calendar year. |
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The term does not include a computer server, Internet protocol |
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address, domain name, website, or software application. A |
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warehouse, storage yard, or manufacturing plant is not a "place of |
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business of the retailer" unless at least three orders are received |
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by the retailer during the calendar year at the warehouse, storage |
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yard, or manufacturing plant. |
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SECTION 2. Section 321.002(a), Tax Code, is amended by |
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amending Subdivision (1) and adding Subdivisions (1-a), (1-b), (4), |
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and (5) to read as follows: |
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(1) "Active economic development agreement" means an |
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agreement under Chapter 380, 381, 504, or 505, Local Government |
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Code, under which the local government made payments on or before |
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January 1, 2023, based on local sales and use tax collections. |
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(1-a) "Additional municipal sales and use tax" means |
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only the additional tax authorized by Section 321.101(b). |
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(1-b) "Affiliated group" has the meaning assigned by |
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Section 171.0001. |
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(4) "Principal business location" means the business |
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location where the decision makers of a business conduct the daily |
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affairs of the organization. |
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(5) "Small business" means a sales tax permit holder |
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that has: |
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(A) its principal business location in this |
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state; |
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(B) not more than 20 employees, including all |
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employees of each member of an affiliated group that includes the |
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permit holder; and |
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(C) total combined gross receipts from the sale |
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of tangible personal property and services in the preceding twelve |
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calendar months of less than $500,000, including the gross receipts |
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of each member of an affiliated group that includes the permit |
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holder. |
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SECTION 3. Section 321.203, Tax Code, is amended by |
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amending Subsections (b), (c), (c-1), (d), and (e-1) and adding |
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Subsections (o), (p), and (q) to read as follows: |
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(b) Except as otherwise provided by this section, the sale |
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of a taxable item by a small business is consummated at the |
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principal business location of the small business [If a retailer |
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has only one place of business in this state, all of the retailer's |
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retail sales of taxable items are consummated at that place of |
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business except as provided by Subsection (e)]. |
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(c) Each [If a retailer has more than one place of business |
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in this state, each] sale of each taxable item by a [the] retailer |
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other than a small business is consummated at the place of business |
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of the retailer in this state where the retailer [first] receives |
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the order, provided that the order is placed in person by the |
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purchaser or lessee of the taxable item at the place of business of |
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the retailer in this state where the retailer [first] receives the |
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order. |
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(c-1) If Subsections (b) and (c) do [the retailer has more |
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than one place of business in this state and Subsection (c) does] |
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not apply, the sale is consummated at the location in this state to |
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which the item is shipped or delivered or at which possession is |
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taken by the purchaser [place of business of the retailer in this |
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state: |
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[(1) from which the retailer ships or delivers the |
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item, if the retailer ships or delivers the item to a point |
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designated by the purchaser or lessee; or |
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[(2) where the purchaser or lessee takes possession of |
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and removes the item, if the purchaser or lessee takes possession of |
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and removes the item from a place of business of the retailer]. |
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(d) If [the retailer has more than one place of business in |
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this state and] Subsections (b), (c), and (c-1) do not apply, the |
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sale is consummated at: |
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(1) the place of business of the retailer in this state |
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where the order is received; or |
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(2) if the order is not received at a place of business |
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of the retailer, the place of business from which the retailer's |
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agent or employee who took the order operates. |
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(e-1) Except as otherwise provided by Subsection (f), (g), |
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(g-1), (g-2), (g-3), (h), (i), (j), (k), (m), [or] (n), (p), or (q), |
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a sale of a taxable item made by a marketplace seller through a |
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marketplace as provided by Section 151.0242 is consummated at the |
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location in this state to which the item is shipped or delivered or |
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at which possession is taken by the purchaser. |
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(o) An order is received at the location where all of the |
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information from the purchaser necessary to determine whether the |
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order can be accepted has been received by or on behalf of the |
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seller. The order is not received at a location where the order is |
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subsequently accepted, completed, or fulfilled. |
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(p) A retailer that has an active economic development |
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agreement with a municipality and has a single place of business in |
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this state that is within the municipality may elect to collect and |
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report the sales tax authorized by this chapter based on the |
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location of the retailer's single place of business. An election |
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under this subsection is binding on the retailer and the purchaser. |
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This subsection expires December 31, 2028. |
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(q) A retailer that has an active economic development |
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agreement with a municipality may elect to collect and report the |
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sales tax authorized by this chapter based on the location of the |
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retailer within the municipality from which an item is shipped |
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directly to the purchaser or the purchaser's designee. An election |
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under this subsection is binding on the retailer and the purchaser. |
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This subsection expires December 31, 2028. |
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SECTION 4. The heading to Section 323.203, Tax Code, is |
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amended to read as follows: |
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Sec. 323.203. CONSUMMATION OF SALE: CERTAIN PROVISIONS OF |
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MUNICIPAL SALES AND USE TAX APPLICABLE. |
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SECTION 5. Section 323.203(a), Tax Code, is amended to read |
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as follows: |
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(a) Sections 321.002 and 321.203 apply to the taxes |
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authorized by this chapter in the same manner as those sections |
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apply to the taxes authorized under Chapter 321 [A sale of a taxable |
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item occurs within the county in which the sale is consummated. A |
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sale is consummated as provided by this section regardless of the |
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place where transfer of title or possession occurs]. |
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SECTION 6. The following laws are repealed: |
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(1) Section 3853.202(d), Special District Local Laws |
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Code; and |
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(2) Sections 323.203(b), (c), (c-1), (c-4), (c-5), |
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(d), (e), (e-1), (f), (g), (g-1), (g-2), (g-3), (h), (i), (j), (k), |
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and (m), Tax Code. |
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SECTION 7. The changes in law made by this Act do not affect |
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tax liability accruing before the effective date of this Act. That |
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liability continues in effect as if this Act had not been enacted, |
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and the former law is continued in effect for the collection of |
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taxes due and for civil and criminal enforcement of the liability |
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for those taxes. |
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SECTION 8. This Act takes effect January 1, 2024. |