By: Ellis S.B. No. 1603
A BILL TO BE ENTITLED
AN ACT
1-1 relating to a municipal short-term automobile rental tax by certain
1-2 municipalities.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. The tax code is amended by adding the following
1-5 as Chapter 353.
1-6 CHAPTER 353. MUNICIPAL SHORT-TERM AUTOMOBILE RENTAL TAX ACT
1-7 SUBCHAPTER A. GENERAL PROVISIONS
1-8 Sec. 353.001. SHORT TITLE. This chapter may be cited as the
1-9 Municipal Short-Term Automobile Rental Tax Act.
1-10 Sec. 353.002. DEFINITIONS. (a) In this chapter:
1-11 (1) "Convention Center Facilities" means improvements
1-12 such as civic centers, civic center buildings, civic center hotels,
1-13 auditoriums, theaters, opera houses, music halls, exhibition halls,
1-14 coliseums, stadiums, museums, aquariums, natatoriums and plazas
1-15 located in the vicinity of municipality owned convention center
1-16 facilities and structures, areas, or facilities, to be used in
1-17 connection with such improvements for off-street parking or storage
1-18 of motor vehicles or other conveyances.
1-19 (2) "Motor Vehicle" means a self-propelled vehicle
1-20 designed principally to transport persons or property on a public
1-21 highway and includes a passenger car, van, station wagon, sports
1-22 utility vehicle, truck, and jeep. "Motor Vehicle" does not
1-23 include:
2-1 (A) a trailer, or semi-trailer, house trailer, a
2-2 truck larger than one half ton or road-building machinery,
2-3 (B) a device moved only by human power,
2-4 (C) a device used exclusively on stationary
2-5 rails or tracks,
2-6 (D) a farm machine, or
2-7 (E) a mobile office.
2-8 (3) "Municipal short-term auto rental tax" means the
2-9 tax authorized by Section 353.004.
2-10 (4) "Municipality" means a municipality that has a
2-11 population of at least 1,500,000.
2-12 (5) "Place of business of the owner" means an
2-13 established outlet, office, or location operated by the owner or
2-14 the owner's agent or employee for the purpose of renting motor
2-15 vehicles and includes any location at which three or more rentals
2-16 are made during a calendar year.
2-17 (6) "Rental" means an agreement by the owner of a
2-18 motor vehicle to give for not longer than 30 days the exclusive use
2-19 of that vehicle to another for consideration.
2-20 (b) Except as otherwise defined in Subsection (a), words
2-21 used in this chapter and defined by Chapter 152 have the meanings
2-22 assigned by Chapter 152.
2-23 Sec. 353.003. OTHER PORTIONS OF TAX CODE APPLICABLE.
2-24 Subtitles A and B, Title 2, and Chapter 152 apply to the tax and to
2-25 the administration and enforcement of the tax imposed under this
3-1 chapter in the same manner that those laws apply to state taxes,
3-2 unless modified by this chapter.
3-3 Sec. 353.004. TAX AUTHORIZED. (a) A municipality may by
3-4 ordinance impose a tax on the gross rental receipts from the rental
3-5 of a motor vehicle in the municipality or in the municipality's
3-6 extraterritorial jurisdiction at a rate not to exceed 5 percent of
3-7 the gross rental receipts.
3-8 (b) The municipal short-term auto rental tax does not apply
3-9 to the sale of a motor vehicle or the rental of a motor vehicle for
3-10 a term longer than 30 days.
3-11 Sec. 353.005. EFFECTIVE DATE. A tax imposed under this
3-12 chapter or the repeal of a tax abolished under this chapter takes
3-13 effect on the first day of the first calendar quarter occurring
3-14 after the expiration of the first complete calendar quarter
3-15 occurring after the date on which the comptroller receives a notice
3-16 from the municipality of the adoption, increase, reduction, or
3-17 repeal of the tax imposed under this chapter.
3-18 Sec. 353.006. CONSUMMATION OF RENTAL. (a) A rental of a
3-19 motor vehicle occurs within the municipality in which the rental is
3-20 consummated. A rental is consummated as provided by this section
3-21 regardless of the place where transfer of possession of the motor
3-22 vehicle occurs.
3-23 (b) If an owner of a motor vehicle has only one place of
3-24 business in this state, all of the owner's rentals of motor
3-25 vehicles are consummated at that place of business except as
4-1 provided by Subsection (e).
4-2 (c) If an owner of a motor vehicle has more than one place
4-3 of business in this state, a rental of a motor vehicle is
4-4 consummated at the place of business of the owner:
4-5 (1) from which the owner delivers the motor vehicle,
4-6 if the owner delivers the motor vehicle to a point designated by
4-7 the person renting the motor vehicle from the owner; or
4-8 (2) where the person renting the motor vehicle from
4-9 the owner takes possession of the motor vehicle, if the person
4-10 renting the motor vehicle from the owner takes possession of the
4-11 motor vehicle from a place of business of the owner.
4-12 (d) If neither the possession of the motor vehicle is taken
4-13 at nor delivery of the motor vehicle is made from the place of
4-14 business of the owner in this state, the rental is consummated at:
4-15 (1) the place of business of the owner in this state
4-16 where the order is received; or
4-17 (2) if the order is not received at a place of
4-18 business of the owner, the place of business from which the owner's
4-19 salesman who took the order operates.
4-20 (e) A rental is consummated at the location in this state to
4-21 which a motor vehicle is delivered or at which possession is taken
4-22 by the person renting the motor vehicle from the owner if transfer
4-23 of possession of a motor vehicle occurs at, or delivery of the
4-24 motor vehicle originates from, a location in this state other than
4-25 a place of business of the owner and if:
5-1 (1) the owner has no place of business; or
5-2 (2) the place of business of the owner where the order
5-3 is initially received or from which the owner's salesman who took
5-4 the order operates is outside this state.
5-5 Sec. 353.007. EXEMPTIONS. A person or entity exempted from
5-6 the state tax imposed on gross rental receipts by Chapter 152 under
5-7 Section 152.026 is exempt from the tax authorized by this chapter.
5-8 SUBCHAPTER B. REVENUE USE
5-9 Sec. 353.101. USE OF TAX REVENUE. (a) Revenue from the
5-10 municipal short-term auto rental tax may be used only to promote
5-11 the arts, tourism and the convention and hotel industry, and that
5-12 use is limited to the following:
5-13 (1) the acquisition of sites for and the acquisition,
5-14 construction, improvement, enlarging, equipping, repairing,
5-15 operation, programming and maintenance of convention center
5-16 facilities;
5-17 (2) the furnishing of facilities, personnel, and
5-18 materials for the registration of convention delegates or
5-19 registrants; and
5-20 (3) advertising and conducting solicitations and
5-21 promotional programs to attract tourists and convention delegates
5-22 or registrants to the municipality or its vicinity.
5-23 Sec. 353.102. PLEDGE FOR BONDS. Subject to the limitations
5-24 provided by this subchapter, a municipality may pledge the revenue
5-25 derived from the municipal short-term auto rental tax imposed under
6-1 this chapter for the payment of bonds that are issued by the
6-2 municipality pursuant to Article 1269j-4.1, Vernon's Texas Civil
6-3 Statutes, for one of the purposes set forth in Section 353.101 or
6-4 by a non-profit corporation created by the municipality pursuant to
6-5 the provisions of Section 4B of Article 5190.6, Vernon's Texas
6-6 Civil Statutes, or Section 4A of Article 1528l Vernon Texas Civil
6-7 Statutes, for one or more of the purposes provided by Section
6-8 353.101.
6-9 Sec. 353.103. CONTRACTS. The governing body of a
6-10 municipality may contract with a person, including another
6-11 governmental entity or a private organization, for the
6-12 construction, operation, management or supervision of programs,
6-13 activities and projects funded with revenue from the tax authorized
6-14 by this chapter. The governing body in writing shall approve in
6-15 advance the annual budget of the person with which it contracts for
6-16 those functions and shall require the person to make periodic
6-17 reports to the governing body at least quarterly listing the
6-18 expenditures made by the person with revenue from the tax
6-19 authorized by this chapter. The person must maintain revenue
6-20 provided from the tax authorized by this chapter in a separate
6-21 account established for that purpose and may not commingle that
6-22 revenue with any other money. The municipality may not delegate to
6-23 any person the management or supervision of its convention and
6-24 visitors programs and activities funded with revenue from the tax
6-25 authorized by this chapter other than by contract as provided by
7-1 this subsection. The approval by the governing body of the
7-2 municipality of the annual budget of the person to whom the
7-3 governing body contracts those functions creates a fiduciary duty
7-4 in the person with respect to the revenue provided by the tax
7-5 authorized by this chapter.
7-6 SUBCHAPTER C. TAX COLLECTION
7-7 Sec. 353.201. COLLECTION OF TAX. (a) The owner of a motor
7-8 vehicle subject to the municipal short-term auto rental tax shall
7-9 collect the tax for the benefit of the municipality. Except as
7-10 inconsistent with this chapter and the rules adopted under this
7-11 chapter, an owner of a motor vehicle subject to the municipal
7-12 short-term auto rental tax on gross rental receipts that may be
7-13 imposed under this chapter shall report and pay the tax to the
7-14 comptroller in the same manner as the tax on gross rental receipts
7-15 from the rental of a rented motor vehicle imposed by Section
7-16 152.026 is reported and paid by the owner under Chapter 152.
7-17 (b) The owner shall add the municipal short-term auto rental
7-18 tax to the rental charge for rentals of motor vehicles, and when
7-19 added, the tax is:
7-20 (1) a part of the rental charge;
7-21 (2) a debt owed to the motor vehicle owner by the
7-22 person renting the vehicle; and
7-23 (3) recoverable at law in the same manner as the
7-24 rental charge.
7-25 (c) The comptroller may proceed against a person renting a
8-1 motor vehicle for any unpaid municipal short-term auto rental tax.
8-2 Sec. 353.202. GROSS RECEIPTS PRESUMED SUBJECT TO TAX. All
8-3 gross receipts of an owner from the rental of a motor vehicle are
8-4 presumed to be subject to the municipal short-term auto rental tax,
8-5 except for gross receipts for which the owner has accepted in good
8-6 faith a properly completed resale or exemption certificate.
8-7 Sec. 353.203. RECORDS. (a) The owner of a motor vehicle
8-8 used for rental purposes shall keep for four years records and
8-9 supporting documents containing the following information on the
8-10 amount of:
8-11 (1) gross rental receipts received from the rental of
8-12 the motor vehicle; and
8-13 (2) the municipal short-term auto rental tax paid to
8-14 the comptroller on each motor vehicle used for rental purposes by
8-15 the owner.
8-16 (b) No mileage records are required.
8-17 Sec. 353.204. FAILURE TO KEEP RECORDS. (a) An owner
8-18 commits an offense if he fails to make and retain complete records
8-19 for the period of four years as provided by Section 353.203.
8-20 (b) An offense under this section is a misdemeanor
8-21 punishable by a fine of not less than $25 nor more than $500.
8-22 SUBCHAPTER D. ADMINISTRATION OF TAXES
8-23 Sec. 353.301. COMPTROLLER TO COLLECT AND ADMINISTER TAXES.
8-24 The comptroller shall administer, collect and enforce any tax
8-25 imposed by a municipality under this chapter. The tax imposed
9-1 under this chapter and the tax imposed on gross rental receipts
9-2 from the rental of a rented motor vehicle under Chapter 152 shall
9-3 be collected together, if both taxes are imposed.
9-4 Sec. 353.302. COMPTROLLER'S REPORTING DUTIES. (a) The
9-5 comptroller shall make quarterly reports to a municipality that has
9-6 adopted the taxes authorized by this chapter if the municipality
9-7 requests the reports. A report must include the name, address, and
9-8 account number of each person in the municipality that has remitted
9-9 to the comptroller a tax payment during the quarter covered by the
9-10 report.
9-11 (b) If a municipality requests an additional report, the
9-12 comptroller shall make an additional quarterly report to the
9-13 municipality including the name, address, and account number, if
9-14 any, of, and the amount of tax due from, each person doing business
9-15 in the municipality who has failed to pay the tax under this
9-16 chapter to the municipality or the tax on gross rental receipts
9-17 from the rental of a rented motor vehicle under Chapter 152. The
9-18 additional report must also include statements:
9-19 (1) showing whether or not there has been a partial
9-20 tax payment by the delinquent taxpayer;
9-21 (2) showing whether or not the taxpayer is delinquent
9-22 in the payment of the tax imposed on gross rental receipts from the
9-23 rental of a rented motor vehicle under Chapter 152 to the state;
9-24 and
9-25 (3) describing the steps taken by the comptroller to
10-1 collect the delinquent taxes.
10-2 (c) If a municipality determines that a person doing
10-3 business in the municipality is not included in a comptroller's
10-4 report, the municipality shall report to the comptroller the name
10-5 and address of the person. Within 90 days after receiving the
10-6 report from a municipality, the comptroller shall send to the
10-7 municipality:
10-8 (1) an explanation as to why the person is not
10-9 obligated for the municipal short-term auto rental tax;
10-10 (2) a statement that the person is obligated for the
10-11 municipal short-term auto rental tax and the tax is delinquent; or
10-12 (3) a certification that the person is obligated for
10-13 the municipal short-term auto rental tax and that the full amount
10-14 of the tax due has been credited to the municipality's account.
10-15 (d) The comptroller shall send by United States certified or
10-16 registered mail to the municipal tax collector a notice of each
10-17 person who is delinquent in the payment to the municipality of the
10-18 tax authorized by this chapter and shall send a copy of the notice
10-19 to the attorney general. A notice sent under this subsection is a
10-20 certification of the amount of tax owed and is prima facie evidence
10-21 of a determination of that amount and of its delinquency.
10-22 Sec. 353.303. SALES TAX PERMITS AND EXEMPTION AND RESALE
10-23 CERTIFICATES. (a) Each place of business of an owner must have a
10-24 permit issued by the comptroller under Subchapter F, Chapter 151.
10-25 (b) The same sales tax permit, exemption certificate, and
11-1 resale certificate required by Chapter 152 for the administration
11-2 and collection of the taxes imposed under that chapter satisfy the
11-3 requirements of this chapter. No additional permit or exemption or
11-4 resale certificate may be required.
11-5 Sec. 353.304. DISCOUNTS FOR PREPAYMENT AND TAX COLLECTION.
11-6 All discounts allowed a retailer under Chapter 151 for the
11-7 collection and prepayment of the taxes under that chapter are
11-8 allowed and applicable to the taxes collected under this chapter.
11-9 Sec. 353.305. PENALTIES AND INTEREST. The penalties and
11-10 interest provided by Chapter 152 for failure to pay the tax imposed
11-11 on gross rental receipts from the rental of a rented motor vehicle
11-12 under Chapter 152 are applicable to the tax imposed under this
11-13 chapter.
11-14 Sec. 353.306. COMPTROLLER'S RULES. The comptroller may
11-15 adopt reasonable rules and prescribe forms that are consistent with
11-16 this chapter for the administration, collection, reporting, and
11-17 enforcement of the tax imposed under this chapter.
11-18 Sec. 353.307. DELINQUENT TAXES: LIMITATIONS. The
11-19 limitations for the bringing of a suit for the collection of a tax
11-20 imposed or a penalty due under this chapter after the tax and
11-21 penalty are delinquent or after a determination against the
11-22 taxpayer are the same as limitations provided by Chapter 152 with
11-23 respect to the tax imposed on gross rental receipts from the rental
11-24 of a rented motor vehicle under Chapter 152.
11-25 Sec. 353.308. SEIZURE AND SALE OF PROPERTY. If the
12-1 comptroller lawfully seizes property for the payment of the taxes
12-2 imposed on gross rental receipts from the rental of a rented motor
12-3 vehicle under Chapter 152 and the property owner is delinquent in
12-4 the payment of taxes under this chapter, the comptroller shall sell
12-5 sufficient property to pay the delinquent taxes and penalties of
12-6 both taxes. The proceeds of a sale of seized property shall first
12-7 be applied to the payment of amounts due the state and the
12-8 remainder, if any, to the amounts due to the municipality to which
12-9 the taxes are due.
12-10 Sec. 353.309. SUIT FOR TAX COLLECTION. (a) A municipality
12-11 acting through its attorney may join as a plaintiff in any suit
12-12 brought by the attorney general to seek a judgment for delinquent
12-13 taxes and penalties due to the municipality under this chapter.
12-14 (b) A municipality may bring suit for the collection of
12-15 taxes owed to the municipality under this chapter if:
12-16 (1) the taxes are certified by the comptroller in the
12-17 notice required by Section 353.302(d);
12-18 (2) a written notice of the tax delinquency and the
12-19 municipality's intention to bring suit is given by certified mail
12-20 to the taxpayer, the attorney general, and the comptroller at least
12-21 60 days before the suit is filed; and
12-22 (3) neither the comptroller nor the attorney general
12-23 disapproves of the suit.
12-24 Sec. 353.310. DISAPPROVAL OF MUNICIPAL SUIT. (a) The
12-25 comptroller or the attorney general may disapprove of the
13-1 institution of a suit by a municipality under Section 353.309(b)
13-2 if:
13-3 (1) negotiations between the state and the taxpayer
13-4 are being conducted for the purpose of the collection of delinquent
13-5 taxes owed to the state and the municipality seeking to bring suit;
13-6 (2) the taxpayer owes substantial taxes to the state
13-7 and there is a reasonable possibility that the taxpayer may be
13-8 unable to pay the total amount owed;
13-9 (3) the state will bring suit against the taxpayer for
13-10 all taxes due under Chapter 152 and this chapter; or
13-11 (4) the suit involves a critical legal question
13-12 relating to the interpretation of state law or a provision of the
13-13 Texas or United States constitution in which the state has an
13-14 overriding interest.
13-15 (b) A notice of disapproval to a municipality must be in
13-16 writing and give the reason for the determination by the
13-17 comptroller or attorney general.
13-18 (c) A disapproval is final and not subject to review.
13-19 (d) Not earlier than one year after the date of a
13-20 disapproval of the institution of a municipal collection suit, the
13-21 municipality may again proceed as provided by Section 353.309(b)
13-22 even though the liability of the taxpayer includes taxes for which
13-23 the municipality has previously given notice and the comptroller or
13-24 attorney general has disapproved of the suit.
13-25 Sec. 353.311. JUDGMENTS IN MUNICIPAL SUIT. (a) A judgment
14-1 in a suit under Section 353.309(b) for or against a taxpayer does
14-2 not affect a claim against the taxpayer by another municipality or
14-3 the state unless the state is party to the suit.
14-4 (b) A municipality shall abstract a copy of each final
14-5 judgment for taxes imposed under this chapter in a case in which
14-6 the state is not a party and shall send to the comptroller a copy
14-7 of the judgment and the abstract.
14-8 (c) A municipality shall by execution collect the taxes
14-9 awarded to it in each judgment received by the municipality and is
14-10 responsible for the renewal of the judgment before its expiration.
14-11 (d) The municipality shall notify the comptroller by
14-12 certified mail of the amount of any taxes collected on the
14-13 judgment.
14-14 SUBCHAPTER E. REVENUE DEPOSIT AND DISTRIBUTION
14-15 Sec. 353.401. COLLECTIONS HELD BY COMPTROLLER. The
14-16 comptroller shall deposit, hold, account for, and transmit the
14-17 taxes collected by the comptroller under this chapter for each
14-18 municipality in the same manner as required under Section 321.501.
14-19 Sec. 353.402. DISTRIBUTION OF TRUST FUNDS. At least twice
14-20 during each state fiscal year and at other times as often as
14-21 feasible, the comptroller shall send to the municipal treasurer or
14-22 to the person who performs the office of the municipal treasurer
14-23 payable to the municipality the municipality's share of the taxes
14-24 collected by the comptroller under this chapter.
14-25 Sec. 353.403. STATE'S SHARE. Before sending any money to a
15-1 municipality under this subchapter, the comptroller shall deduct
15-2 two percent of the amount of the taxes collected within the
15-3 municipality during the period for which a distribution is made as
15-4 the state's charge for its services under this chapter and shall
15-5 credit the money deducted to the general revenue fund.
15-6 Sec. 353.404. AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
15-7 comptroller may retain in the suspense account of a municipality a
15-8 portion of the municipality's share of the tax collected for the
15-9 municipality under this chapter, not to exceed five percent of the
15-10 amount remitted to the municipality. If the municipality has
15-11 abolished the tax, the amount that may be retained may not exceed
15-12 five percent of the final remittance to the municipality at the
15-13 time of the termination of the collection of the tax.
15-14 (b) From the amounts retained in a municipality's suspense
15-15 account, the comptroller may make refunds for overpayments to the
15-16 account and to redeem dishonored checks and drafts deposited to the
15-17 credit of the account.
15-18 (c) Before the expiration of one year after the effective
15-19 date of the abolition of a municipality's tax under this chapter
15-20 the comptroller shall send to the municipality the remainder of the
15-21 money in the municipality's account and shall close the account.
15-22 Sec. 353.405. INTEREST ON TRUST ACCOUNT. Interest earned on
15-23 all deposits made with the state treasurer under Section 353.401,
15-24 including interest earned from retained suspense accounts, shall be
15-25 credited to the general revenue fund.
16-1 SECTION 2. The importance of this legislation and the
16-2 crowded condition of the calendars in both houses create an
16-3 emergency and an imperative public necessity that the
16-4 constitutional rule requiring bills to be read on three several
16-5 days in each house be suspended, and this rule is hereby suspended.