By Davis H.B. No. 3163
74R5718 CBH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the authority of certain municipalities to impose a
1-3 local tax on the gross rental receipts from the rental of a rented
1-4 motor vehicle.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subtitle C, Title 3, Tax Code, is amended by
1-7 adding Chapter 325 to read as follows:
1-8 CHAPTER 325. MUNICIPAL TAX ON RENTAL OF RENTED MOTOR VEHICLE
1-9 SUBCHAPTER A. GENERAL PROVISIONS
1-10 Sec. 325.001. DEFINITIONS. (a) In this chapter, "place of
1-11 business of the owner" means an established outlet, office, or
1-12 location operated by the owner of a motor vehicle or the owner's
1-13 agent or employee for the purpose of receiving orders for the
1-14 rental of rented motor vehicles and includes any location at which
1-15 five or more orders are received by the owner during a calendar
1-16 year.
1-17 (b) Words used in this chapter and defined by Chapter 152
1-18 have the meanings assigned by Chapter 152.
1-19 Sec. 325.002. OTHER PORTIONS OF TAX APPLICABLE. Subtitles A
1-20 and B, Title 2, and Chapter 152 apply to the taxes and to the
1-21 administration and enforcement of the taxes imposed by this chapter
1-22 in the same manner that those laws apply to state taxes, unless
1-23 modified by this chapter.
1-24 Sec. 325.003. APPLICATION OF CHAPTER. This chapter applies
2-1 only in a municipality located in a county that has a population of
2-2 1.2 million or more and that is adjacent to a county with a
2-3 population of more than 250,000.
2-4 (Sections 325.004-325.100 reserved for expansion
2-5 SUBCHAPTER B. IMPOSITION OF GROSS RENTAL RECEIPTS
2-6 TAXES BY MUNICIPALITY
2-7 Sec. 325.101. TAX AUTHORIZED. (a) A municipality by
2-8 ordinance may impose a tax on the gross rental receipts from the
2-9 rental of a rented motor vehicle.
2-10 (b) A municipality by ordinance may repeal or increase or
2-11 decrease the rate of a tax imposed under Subsection (a).
2-12 Sec. 325.102. EFFECTIVE DATES: NEW TAX, TAX REPEAL,
2-13 BOUNDARY CHANGE. (a) The imposition of a tax under this chapter,
2-14 the repeal of a tax imposed under this chapter, or a change in the
2-15 tax rate takes effect on the first day of the first calendar
2-16 quarter occurring after the expiration of the first complete
2-17 calendar quarter occurring after the date on which the comptroller
2-18 receives a notice of the action sent by United States registered or
2-19 certified mail that includes a certified copy of the ordinance and,
2-20 if the action is the initial imposition of the tax, a map of the
2-21 municipality clearly showing its boundaries.
2-22 (b) If a municipality in which the tax imposed under this
2-23 chapter is in effect changes its boundaries, the municipal
2-24 secretary shall send by United States registered or certified mail
2-25 to the comptroller a certified copy of the ordinance that adds or
2-26 detaches municipal territory and that shows the effective date of
2-27 the boundary change. The ordinance must be accompanied by a map
3-1 clearly showing the added or detached territory. Except as
3-2 provided by Subsection (c), the tax takes effect in the added
3-3 territory or is inapplicable to the detached territory on the first
3-4 day of the first calendar quarter after the comptroller receives
3-5 the ordinance and map.
3-6 (c) If, within 10 days after the receipt of an ordinance and
3-7 map sent under Subsection (b), the comptroller notifies the
3-8 secretary of the municipality that more time is required, the
3-9 effective date of the application of the tax in the added or
3-10 detached area is the first day of the first calendar quarter after
3-11 the expiration of the first complete calendar quarter occurring
3-12 after the date on which the comptroller receives the ordinance and
3-13 map.
3-14 Sec. 325.103. RENTAL TAX. The tax authorized by this
3-15 chapter may be imposed at a rate in increments of one-eighth of one
3-16 percent, not to exceed two percent, on the gross rental receipts
3-17 from the rental of a rented motor vehicle within the municipality.
3-18 (Sections 325.104-325.200 reserved for expansion
3-19 SUBCHAPTER C. COMPUTATION OF TAXES
3-20 Sec. 325.201. COMPUTATION OF GROSS RENTAL RECEIPTS TAXES.
3-21 (a) Each motor vehicle owner registered as a retailer under
3-22 Section 152.065 in a municipality that has adopted a tax authorized
3-23 by this chapter shall add the gross rental receipts tax imposed by
3-24 the municipality under this chapter and by Chapter 152 to the
3-25 rental charge, and the sum of the taxes is a part of the rental
3-26 charge, a debt owed to the motor vehicle owner by the person
3-27 renting the vehicle, and recoverable at law in the same manner as
4-1 the rental charge.
4-2 (b) The amount of the total tax is computed by multiplying
4-3 the combined applicable tax rates by the amount of the rental
4-4 charge. If the product results in a fraction of a cent less than
4-5 one-half of one cent, the fraction of a cent is not collected. If
4-6 the fraction of a cent is one-half of one cent or more, the
4-7 fraction shall be collected as one cent.
4-8 (c) The comptroller may publish schedules and brackets of
4-9 amounts of taxes based on the formula provided by Subsection (b)
4-10 for use in municipalities that have adopted the tax authorized by
4-11 this chapter.
4-12 Sec. 325.202. CONSUMMATION OF RENTAL. (a) A rental of a
4-13 rented motor vehicle occurs within the municipality in which the
4-14 rental is consummated. A rental is consummated as provided by this
4-15 section regardless of the place where transfer of possession
4-16 occurs.
4-17 (b) If an owner has only one place of business in this
4-18 state, all of the owner's rentals are consummated at that place of
4-19 business.
4-20 (c) If an owner has more than one place of business in this
4-21 state, a rental of a rented motor vehicle by the owner is
4-22 consummated at the owner's place of business:
4-23 (1) where the owner delivers the motor vehicle, if the
4-24 owner delivers the motor vehicle to a point designated by the
4-25 renter; or
4-26 (2) where the renter takes possession of and removes
4-27 the motor vehicle, if the renter takes possession of and removes
5-1 the motor vehicle from the owner's place of business.
5-2 (d) If neither the possession of the motor vehicle is taken
5-3 at or delivery of the motor vehicle is made from the owner's place
5-4 of business in this state, the rental is consummated:
5-5 (1) at the owner's place of business in this state
5-6 where the order is received; or
5-7 (2) if the order is not received at a place of
5-8 business of the owner, at the place of business from which the
5-9 owner's agent who took the order operates.
5-10 Sec. 325.203. LOCAL TAX INAPPLICABLE WHEN NO STATE TAX. The
5-11 tax authorized by this chapter does not apply to the gross receipts
5-12 from the rental of a rented motor vehicle unless the tax imposed by
5-13 Chapter 152 also applies to the rental.
5-14 Sec. 325.204. STATE EXEMPTIONS APPLICABLE. The exemptions
5-15 provided by Subchapter E, Chapter 152, apply to the taxes
5-16 authorized by this chapter.
5-17 Sec. 325.205. TRANSITION EXEMPTION. (a) For a period of
5-18 three years only after the effective date of the imposition or
5-19 increase of the tax authorized by this chapter in a municipality,
5-20 the gross rental receipts from the rental of a rented motor vehicle
5-21 are exempt from that imposition or increase if the notice required
5-22 by Subsection (b) is given and if:
5-23 (1) the items are used for the performance of a
5-24 written contract entered into before the effective date of the
5-25 imposition or increase if the contract may be affected and the
5-26 contract may not be modified because of the tax; or
5-27 (2) the items are used under the obligation of a bid
6-1 submitted before the effective date of the imposition or increase
6-2 if the contract may be affected and the bid may not be withdrawn or
6-3 modified because of the tax.
6-4 (b) The taxpayer must give the comptroller notice of the
6-5 contract or bid on which an exemption is to be claimed within 60
6-6 days after the effective date of the imposition or increase of the
6-7 tax under this chapter in the municipality.
6-8 (Sections 325.206-325.300 reserved for expansion
6-9 SUBCHAPTER D. ADMINISTRATION OF TAXES
6-10 Sec. 325.301. COMPTROLLER TO COLLECT AND ADMINISTER TAXES.
6-11 The comptroller shall administer, collect, and enforce the tax
6-12 imposed by a municipality under this chapter. The tax imposed
6-13 under this chapter and the tax imposed under Chapter 152 shall be
6-14 collected together.
6-15 Sec. 325.302. COMPTROLLER'S REPORTING DUTIES. (a) The
6-16 comptroller shall make quarterly reports to a municipality that has
6-17 adopted the tax authorized by this chapter if the municipality
6-18 requests the reports. A report must include the name, address, and
6-19 account number of each person in the municipality that has remitted
6-20 to the comptroller a tax payment during the quarter covered by the
6-21 report.
6-22 (b) If a municipality requests an additional report, the
6-23 comptroller shall make an additional quarterly report to the
6-24 municipality including the name, address, and account number, if
6-25 any, of, and the amount of tax due from, each person doing business
6-26 in the municipality who has failed to pay the tax under this
6-27 chapter to the municipality or under Chapter 152. The additional
7-1 report must also include statements:
7-2 (1) showing whether or not there has been a partial
7-3 tax payment by the delinquent taxpayer;
7-4 (2) showing whether or not the taxpayer is delinquent
7-5 in the payment of gross rental receipts taxes to the state; and
7-6 (3) describing the steps taken by the comptroller to
7-7 collect the delinquent taxes.
7-8 (c) If a municipality determines that a person doing
7-9 business in the municipality is not included in a comptroller's
7-10 report, the municipality shall report to the comptroller the name
7-11 and address of the person. Within 90 days after receiving the
7-12 report from a municipality, the comptroller shall send to the
7-13 municipality:
7-14 (1) an explanation as to why the person is not
7-15 obligated for the municipal tax;
7-16 (2) a statement that the person is obligated for the
7-17 municipal tax and the tax is delinquent; or
7-18 (3) a certification that the person is obligated for
7-19 the municipal tax and that the full amount of the tax due has been
7-20 credited to the municipality's account.
7-21 (d) The comptroller shall send by United States certified or
7-22 registered mail to the municipal tax collector a notice of each
7-23 person who is delinquent in the payment to the municipality of the
7-24 taxes authorized by this chapter and shall send a copy of the
7-25 notice to the attorney general. A notice sent under this
7-26 subsection is a certification of the amount of tax owed and is
7-27 prima facie evidence of a determination of that amount and of its
8-1 delinquency.
8-2 Sec. 325.303. DISPOSITION OF AMOUNT ERRONEOUSLY COLLECTED.
8-3 (a) If in a territory added to a municipality an owner erroneously
8-4 collects an amount as a tax imposed under this chapter before the
8-5 date the taxes imposed under this chapter by the municipality take
8-6 effect in the added territory under Section 325.102, the amount
8-7 collected is treated as if it were revenue from the tax imposed by
8-8 the municipality under this chapter, and the comptroller shall
8-9 collect and administer the amount in the same manner as tax
8-10 revenue.
8-11 (b) This section does not affect the right of a person who
8-12 paid an amount erroneously collected by an owner to claim a refund
8-13 or the authority of the comptroller to make a refund of that
8-14 amount.
8-15 Sec. 325.304. PERMITS. (a) A motor vehicle owner required
8-16 to collect, report, and pay a tax on gross rental receipts under
8-17 this chapter shall comply with Section 152.065 and applicable
8-18 provisions of Chapter 151.
8-19 (b) An additional permit, exemption, or certificate is not
8-20 required except that the comptroller may prescribe a separate
8-21 exemption certificate form for the transition exemption for prior
8-22 contracts and bids under Section 325.205.
8-23 Sec. 325.305. DISCOUNTS. A discount allowed an owner under
8-24 Chapter 152 and applicable provisions of Chapter 151 for the
8-25 collection and prepayment of the taxes under that chapter are
8-26 allowed and applicable to the taxes collected under this chapter.
8-27 Sec. 325.306. COMPTROLLER'S RULES. The comptroller may
9-1 adopt reasonable rules and prescribe forms that are consistent with
9-2 this chapter for the administration, collection, reporting, and
9-3 enforcement of this chapter.
9-4 Sec. 325.307. DELINQUENT TAXES: LIMITATIONS. The
9-5 limitations for the bringing of a suit for the collection of a tax
9-6 imposed or a penalty due under this chapter after the tax and
9-7 penalty are delinquent or after a determination against the
9-8 taxpayer are the same as limitations provided by Chapter 152 and
9-9 applicable provisions of Chapter 151.
9-10 Sec. 325.308. SEIZURE AND SALE OF PROPERTY. If the
9-11 comptroller lawfully seizes property for the payment of the taxes
9-12 imposed under Chapter 152 and the property owner is delinquent in
9-13 the payment of taxes under this chapter, the comptroller shall sell
9-14 sufficient property to pay the delinquent taxes and penalties of
9-15 both taxes. The proceeds of a sale of seized property shall first
9-16 be applied to the payment of amounts due the state and the
9-17 remainder, if any, to the amounts due to the municipality to which
9-18 the taxes are due.
9-19 Sec. 325.309. SUIT FOR TAX COLLECTION. (a) A municipality
9-20 acting through its attorney may join as a plaintiff in any suit
9-21 brought by the attorney general to seek a judgment for delinquent
9-22 taxes and penalties due to the municipality under this chapter.
9-23 (b) A municipality may bring suit for the collection of
9-24 taxes owed to the municipality under this chapter if:
9-25 (1) the taxes are certified by the comptroller in the
9-26 notice required by Section 325.302(d);
9-27 (2) a written notice of the tax delinquency and the
10-1 municipality's intention to bring suit is given by certified mail
10-2 to the taxpayer, the attorney general, and the comptroller at least
10-3 60 days before the suit is filed; and
10-4 (3) neither the comptroller nor the attorney general
10-5 disapproves of the suit.
10-6 Sec. 325.310. DISAPPROVAL OF MUNICIPAL SUIT. (a) The
10-7 comptroller or the attorney general may disapprove of the
10-8 institution of a suit by a municipality under Section 325.309(b)
10-9 if:
10-10 (1) negotiations between the state and the taxpayer
10-11 are being conducted for the purpose of the collection of delinquent
10-12 taxes owed to the state and the municipality seeking to bring suit;
10-13 (2) the taxpayer owes substantial taxes to the state
10-14 and there is a reasonable possibility that the taxpayer may be
10-15 unable to pay the total amount owed;
10-16 (3) the state will bring suit against the taxpayer for
10-17 all taxes due under Chapter 152 and this chapter; or
10-18 (4) the suit involves a critical legal question
10-19 relating to the interpretation of state law or a provision of the
10-20 Texas or United States constitution in which the state has an
10-21 overriding interest.
10-22 (b) A notice of disapproval to a municipality must be in
10-23 writing and give the reason for the determination by the
10-24 comptroller or attorney general.
10-25 (c) A disapproval is final and not subject to review.
10-26 (d) Not earlier than the first anniversary of the date of a
10-27 disapproval of the institution of a municipal collection suit, the
11-1 municipality may again proceed as provided by Section 325.309(b)
11-2 even though the liability of the taxpayer includes taxes for which
11-3 the municipality has previously given notice and the comptroller or
11-4 attorney general has disapproved of the suit.
11-5 Sec. 325.311. JUDGMENTS IN MUNICIPAL SUIT. (a) A judgment
11-6 in a suit under Section 325.309(b) for or against a taxpayer does
11-7 not affect a claim against the taxpayer by another municipality or
11-8 the state unless the state is party to the suit.
11-9 (b) A municipality shall abstract a copy of each final
11-10 judgment for taxes imposed under this chapter in a case in which
11-11 the state is not a party and shall send to the comptroller a copy
11-12 of the judgment and the abstract.
11-13 (c) A municipality shall by execution collect the taxes
11-14 awarded to it in each judgment received by the municipality and is
11-15 responsible for the renewal of the judgment before its expiration.
11-16 (d) The municipality shall notify the comptroller by
11-17 certified mail of the amount of any taxes collected on the
11-18 judgment.
11-19 (Sections 325.312-325.400 reserved for expansion
11-20 SUBCHAPTER E. REVENUE DEPOSIT, DISTRIBUTION, AND USE
11-21 Sec. 325.401. TRUST ACCOUNT. (a) The comptroller shall
11-22 deposit the taxes collected by the comptroller under this chapter
11-23 with the state treasurer. The treasurer shall keep the deposits in
11-24 trust in the separate suspense account of the municipality from
11-25 which the taxes were collected.
11-26 (b) The comptroller and each employee of the comptroller who
11-27 has any duty or responsibility in connection with the collection,
12-1 deposit, transfer, transmittal, disbursement, safekeeping,
12-2 accounting, or recording of the funds that are acquired by the
12-3 comptroller under this chapter shall enter into one or more surety
12-4 bonds in the amount of $100,000 payable to any and all
12-5 municipalities from which the funds are collected. The comptroller
12-6 may enter into a blanket bond or bonds covering the comptroller and
12-7 the comptroller's employees. A separate bond is not required under
12-8 this section if a bond that meets the requirements of Section
12-9 321.501(c) also meets the requirements of this section.
12-10 (c) The premiums for the bonds required by this section
12-11 shall be paid when due from the state's share of money collected
12-12 and held by the comptroller under this chapter before its deposit
12-13 in the general revenue fund.
12-14 Sec. 325.402. DISTRIBUTION OF TRUST FUNDS. At least twice
12-15 during each state fiscal year and at other times as often as
12-16 feasible, the comptroller shall send to the municipal treasurer or
12-17 to the person who performs the office of the municipal treasurer
12-18 payable to the municipality the municipality's share of the taxes
12-19 collected by the comptroller under this chapter.
12-20 Sec. 325.403. STATE'S SHARE. Before sending any money to a
12-21 municipality under this subchapter the comptroller shall deduct two
12-22 percent of the amount of the taxes collected within the
12-23 municipality during the period for which a distribution is made as
12-24 the state's charge for its services under this chapter and shall,
12-25 subject to premium payments under Section 325.401(c), credit the
12-26 money deducted to the general revenue fund.
12-27 Sec. 325.404. AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
13-1 comptroller may retain in the suspense account of a municipality a
13-2 portion of the municipality's share of the tax collected for the
13-3 municipality under this chapter, not to exceed five percent of the
13-4 amount remitted to the municipality. If the municipality has
13-5 abolished the tax, the amount that may be retained may not exceed
13-6 five percent of the final remittance to the municipality at the
13-7 time of the termination of the collection of the tax.
13-8 (b) From the amounts retained in a municipality's suspense
13-9 account, the comptroller may make refunds for overpayments to the
13-10 account and to redeem dishonored checks and drafts deposited to the
13-11 credit of the account.
13-12 (c) Not later than the first anniversary of the effective
13-13 date of the abolition of a municipality's tax under this chapter
13-14 the comptroller shall send to the municipality the remainder of the
13-15 money in the municipality's account and shall close the account.
13-16 Sec. 325.405. INTEREST ON TRUST ACCOUNT. Interest earned on
13-17 all deposits made with the state treasurer under Section 325.401,
13-18 including interest earned from retained suspense accounts, shall be
13-19 credited to the general revenue fund.
13-20 Sec. 325.406. USE OF TAX REVENUE BY MUNICIPALITY. The money
13-21 received by a municipality under this chapter is for the use and
13-22 benefit of the municipality and may be used for any purpose for
13-23 which the general funds of the municipality may be used.
13-24 Sec. 325.407. TAX POWERS OF MUNICIPALITY NOT LIMITED. This
13-25 chapter does not abolish or limit the tax powers of a municipality.
13-26 SECTION 2. The importance of this legislation and the
13-27 crowded condition of the calendars in both houses create an
14-1 emergency and an imperative public necessity that the
14-2 constitutional rule requiring bills to be read on three several
14-3 days in each house be suspended, and this rule is hereby suspended,
14-4 and that this Act take effect and be in force from and after its
14-5 passage, and it is so enacted.