By: Ratliff S.B. No. 1319
A BILL TO BE ENTITLED
AN ACT
1-1 relating to procedures for tax auditing and collection.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Subchapter B, Chapter 151, Tax Code, is amended
1-4 by adding Section 151.0231 to read as follows:
1-5 Sec. 151.0231. MANAGED AUDITS. (a) In this section,
1-6 "managed audit" means a review and analysis of invoices, checks,
1-7 accounting records, or other documents or information to determine
1-8 a taxpayer's liability for tax under this chapter.
1-9 (b) A managed audit may be limited to certain categories of
1-10 liability under this chapter, including tax on:
1-11 (1) sales of one or more types of taxable items;
1-12 (2) purchases of assets;
1-13 (3) purchases of expense items;
1-14 (4) purchases under a direct payment permit; or
1-15 (5) any other category specified in an agreement
1-16 authorized by this section.
1-17 (c) The comptroller may, in a written agreement, authorize a
1-18 taxpayer to conduct a managed audit under this section. The
1-19 agreement must:
1-20 (1) be signed by an authorized representative of the
1-21 comptroller and the taxpayer; and
1-22 (2) specify the period to be audited and the procedure
1-23 to be followed.
1-24 (d) In determining whether to authorize a managed audit, the
2-1 comptroller may consider, in addition to other factors the
2-2 comptroller considers relevant:
2-3 (1) the taxpayer's history of tax compliance;
2-4 (2) the amount of time and resources the taxpayer has
2-5 available to dedicate to the audit;
2-6 (3) the extent and availability of the taxpayer's
2-7 records; and
2-8 (4) the taxpayer's ability to pay any expected
2-9 liability.
2-10 (e) The decision to authorize or not authorize a managed
2-11 audit rests solely with the comptroller.
2-12 (f) The comptroller may examine records and perform reviews
2-13 that the comptroller determines are necessary before the audit is
2-14 finalized to verify the results of the audit.
2-15 (g) Unless the audit or information reviewed by the
2-16 comptroller under Subsection (f) discloses fraud or wilful evasion
2-17 of the tax, the comptroller may not assess a penalty and may waive
2-18 all or part of the interest that would otherwise accrue on any
2-19 amount identified to be due in a managed audit. This subsection
2-20 does not apply to any amount collected by the taxpayer that was a
2-21 tax or represented to be a tax but that was not remitted to this
2-22 state.
2-23 (h) Except as provided by Section 111.104(f), the taxpayer
2-24 is entitled to a refund of any tax overpayment disclosed by a
2-25 managed audit under this section.
2-26 SECTION 2. Subchapter I, Chapter 151, Tax Code, is amended
3-1 by adding Section 151.4171 to read as follows:
3-2 Sec. 151.4171. OPTIONAL REPORTING METHOD: PERCENTAGE-BASED.
3-3 (a) In this section, "percentage-based reporting method" means a
3-4 method by which a taxpayer categorizes purchase transactions
3-5 according to standards specified in the letter of authorization,
3-6 reviews an agreed-on sample of invoices in that category to
3-7 determine the percentage of taxable transactions, and uses that
3-8 percentage to calculate the amount of tax to be reported.
3-9 (b) The comptroller may authorize the holder of a direct
3-10 payment permit to use a percentage-based reporting method. The
3-11 authorized percentage must be used for a three-year period
3-12 specified by the comptroller, unless the authorization is revoked
3-13 by the comptroller.
3-14 (c) The comptroller may revoke the authorization to report
3-15 under this section if the comptroller determines that the
3-16 percentage being used is no longer representative because of a
3-17 change:
3-18 (1) in law, including a change in the interpretation
3-19 of a law or rule; or
3-20 (2) in the taxpayer's business operations.
3-21 (d) The decision of the comptroller to deny or revoke
3-22 authorization under this section is not appealable.
3-23 (e) In deciding whether to authorize reporting under this
3-24 section, the comptroller may categorize transactions by dollar
3-25 amount, by type of taxable item purchased, by the purpose for which
3-26 the taxable item will be used, or by other standards appropriate to
4-1 the taxpayer's operations.
4-2 (f) The comptroller by rule may specify additional
4-3 procedures that must be followed and conditions that must be met
4-4 before the comptroller authorizes a taxpayer to report under this
4-5 section.
4-6 SECTION 3. Subchapter I, Chapter 151, Tax Code, is amended
4-7 by adding Section 151.430 to read as follows:
4-8 Sec. 151.430. DETERMINATION OF OVERPAID AMOUNTS. (a) This
4-9 section applies to the tax on purchases paid by a person holding a
4-10 permit under this chapter who has purchased taxable items for use
4-11 in this state and has remitted tax on those items in error to this
4-12 state or has paid tax on those items in error to a retailer holding
4-13 a permit under this chapter.
4-14 (b) A person to whom this section applies may compute the
4-15 amount of overpayment by use of a projection based on a sampling of
4-16 transactions. The sampling method used must comply with generally
4-17 accepted sampling methods as approved by the comptroller.
4-18 (c) The person may obtain reimbursement for amounts
4-19 determined to have been overpaid by taking a credit on one or more
4-20 sales tax returns or by filing a claim for refund with the
4-21 comptroller within the limitation period specified by Subchapter D,
4-22 Chapter 111.
4-23 (d) The person must record the method by which the
4-24 projection and computation were performed and must make available
4-25 on request by the comptroller the records on which the projection
4-26 and computation were based.
5-1 (e) The comptroller may adopt rules specifying additional
5-2 procedures that must be followed in connection with claiming a
5-3 credit under this section.
5-4 SECTION 4. This Act takes effect October 1, 1999.
5-5 SECTION 5. The importance of this legislation and the
5-6 crowded condition of the calendars in both houses create an
5-7 emergency and an imperative public necessity that the
5-8 constitutional rule requiring bills to be read on three several
5-9 days in each house be suspended, and this rule is hereby suspended.