By Oliveira H.B. No. 1845
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to simplified sales and use tax administration.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subtitle D, Title 2, Tax Code, is amended by
1-5 adding Chapter 142 to read as follows:
1-6 CHAPTER 142. SIMPLIFIED SALES AND USE TAX ADMINISTRATION ACT
1-7 Sec. 142.001. TITLE. This chapter may be cited as the
1-8 Simplified Sales and Use Tax Administration Act.
1-9 Sec. 142.002. DEFINITIONS. In this chapter:
1-10 (1) "Agreement" means the Streamlined Sales and Use
1-11 Tax Agreement as amended and adopted on January 27, 2001.
1-12 (2) "Certified automated system" means software
1-13 certified jointly by the states that are signatories to the
1-14 agreement to compute the tax imposed by each jurisdiction on a
1-15 transaction, determine the amount of tax to remit to the
1-16 appropriate state, and maintain a record of the transaction.
1-17 (3) "Certified service provider" means an agent
1-18 certified jointly by the states that are signatories to the
1-19 agreement to perform all of the seller's sales tax functions.
1-20 (4) "Sales tax" means a sales tax administered or
1-21 computed under this subtitle or Subtitle C, Title 3, or in a
1-22 similar manner.
1-23 (5) "Seller" means a person who sells, leases, or
1-24 rents personal property or services.
2-1 (6) "Use tax" means a use tax administered or computed
2-2 under this subtitle or Subtitle C, Title 3, or in a similar manner.
2-3 Sec. 142.003. LEGISLATIVE FINDING. The legislature finds
2-4 that a simplified sales and use tax system will reduce and over
2-5 time eliminate the burden and costs of all vendors to collect this
2-6 state's sales and use tax. The legislature also finds that this
2-7 state should participate in multistate discussions to review or
2-8 amend the terms of the agreement to simplify and modernize sales
2-9 and use tax administration to reduce the burden of tax compliance
2-10 for all sellers and for all types of commerce.
2-11 Sec. 142.004. NEGOTIATIONS. This state shall enter into
2-12 multistate discussions for the purposes of reviewing or amending
2-13 the agreement embodying the simplification requirements prescribed
2-14 by Section 142.007. This state may be represented by not more than
2-15 four delegates for purposes of those discussions.
2-16 Sec. 142.005. AUTHORITY TO ENTER INTO AGREEMENT. (a) The
2-17 comptroller is authorized and directed to participate in the
2-18 development of the Streamlined Sales and Use Tax Agreement with one
2-19 or more states to simplify and modernize sales and use tax
2-20 administration in order to substantially reduce the burden of tax
2-21 compliance for all sellers and for all types of commerce. In the
2-22 development of the agreement, the comptroller may act jointly with
2-23 other states that are members of the agreement to establish
2-24 standards for certification of a certified service provider and
2-25 certified automated system and establish performance standards for
2-26 multistate sellers.
2-27 (b) The comptroller or the comptroller's designee may
3-1 represent this state before the other states that are signatories
3-2 to the agreement.
3-3 Sec. 142.006. RELATIONSHIP TO STATE LAW. The agreement
3-4 authorized by this chapter does not, in whole or part, invalidate
3-5 or amend a law of this state. Adoption of the agreement by this
3-6 state does not amend or modify a law of this state. Implementation
3-7 of a condition of the agreement in this state, whether adopted
3-8 before, at, or after membership of this state in the agreement,
3-9 must be by the action of this state.
3-10 Sec. 142.007. AGREEMENT REQUIREMENTS. (a) The comptroller
3-11 may not enter into the agreement authorized by this chapter unless
3-12 the agreement requires each state to comply with the requirements
3-13 prescribed by this section.
3-14 (b) The agreement must set restrictions to limit over time
3-15 the number of state rates.
3-16 (c) The agreement must establish uniform standards for:
3-17 (1) the sourcing of transactions to taxing
3-18 jurisdictions;
3-19 (2) the administration of exempt sales; and
3-20 (3) sales and use tax returns and remittances.
3-21 (d) The agreement must provide a central, electronic
3-22 registration system that allows a seller to register to collect and
3-23 remit sales and use taxes for all signatory states.
3-24 (e) The agreement must provide that registration with the
3-25 central registration system and the collection of sales and use
3-26 taxes in the signatory states will not be used as a factor in
3-27 determining whether the seller has nexus with a state for any tax.
4-1 (f) The agreement must provide for reduction of the burdens
4-2 of complying with local sales and use taxes through:
4-3 (1) restricting variances between the state and local
4-4 tax bases;
4-5 (2) requiring states to administer any sales and use
4-6 taxes levied by local jurisdictions within the state so that
4-7 sellers collecting and remitting these taxes will not have to
4-8 register or file returns with, remit funds to, or be subject to
4-9 independent audits from local taxing jurisdictions;
4-10 (3) restricting the frequency of changes in the local
4-11 sales and use tax rates and setting effective dates for the
4-12 application of local jurisdictional boundary changes to local sales
4-13 and use taxes; and
4-14 (4) providing notice of changes in local sales and use
4-15 tax rates and of changes in the boundaries of local taxing
4-16 jurisdictions.
4-17 (g) The agreement must outline any monetary allowances that
4-18 are to be provided by the states to sellers or certified service
4-19 providers. The agreement must allow for a joint public and private
4-20 sector study of the compliance cost on sellers and certified
4-21 service providers to collect sales and use taxes for state and
4-22 local governments under various levels of complexity to be
4-23 completed by July 1, 2002.
4-24 (h) The agreement must require each state to certify
4-25 compliance with the terms of the agreement before joining and to
4-26 maintain compliance, under the laws of the member state, with all
4-27 provisions of the agreement while a member.
5-1 (i) The agreement must require each state to adopt a uniform
5-2 policy for certified service providers that protects the privacy of
5-3 consumers and maintains the confidentiality of tax information.
5-4 (j) The agreement must provide for the appointment of an
5-5 advisory council of private sector representatives and an advisory
5-6 council of nonmember state representatives to consult with in the
5-7 administration of the agreement.
5-8 Sec. 142.008. COOPERATING SOVEREIGNS. The agreement
5-9 authorized by this chapter is an accord among individual
5-10 cooperating sovereigns in furtherance of their governmental
5-11 functions. The agreement provides a mechanism among the member
5-12 states to establish and maintain a cooperative, simplified system
5-13 for the application and administration of sales and use taxes under
5-14 the duly adopted law of each member state.
5-15 Sec. 142.009. LIMITED BINDING AND BENEFICIAL EFFECT. (a)
5-16 The agreement authorized by this chapter binds and inures only to
5-17 the benefit of this state and the other member states. A person,
5-18 other than a member state, is not an intended beneficiary of the
5-19 agreement. A benefit to a person other than a state is established
5-20 by the law of this state and the other member states and not by the
5-21 terms of the agreement.
5-22 (b) Consistent with Subsection (a), a person does not have a
5-23 cause of action or defense under the agreement or by virtue of this
5-24 state's approval of the agreement. A person may not challenge, in
5-25 any action brought under any law, an action or inaction by any
5-26 department, agency, or other instrumentality of this state, or any
5-27 political subdivision of this state, on the ground that the action
6-1 or inaction is inconsistent with the agreement.
6-2 (c) A law of this state, or the application of the law, may
6-3 not be declared invalid as to any person or circumstance on the
6-4 ground that the provision or application is inconsistent with the
6-5 agreement.
6-6 Sec. 142.010. SELLER AND THIRD PARTY LIABILITY. (a) A
6-7 certified service provider is the agent of a seller, with whom the
6-8 certified service provider has contracted, for the collection and
6-9 remittance of sales and use taxes. As the seller's agent, the
6-10 certified service provider is liable for sales and use tax due each
6-11 member state on all sales transactions the provider processes for
6-12 the seller except as provided by this section.
6-13 (b) A seller that contracts with a certified service
6-14 provider is not liable to this state for sales or use tax due on
6-15 transactions processed by the certified service provider unless the
6-16 seller misrepresented the type of items it sells or committed
6-17 fraud. In the absence of probable cause to believe that the seller
6-18 has committed fraud or made a material misrepresentation, the
6-19 seller is not subject to audit on the transactions processed by the
6-20 certified service provider. A seller is subject to audit for
6-21 transactions not processed by the certified service provider. The
6-22 member states acting jointly may perform a system check of the
6-23 seller and review the seller's procedures to determine if the
6-24 certified service provider's system is functioning properly and the
6-25 extent to which the seller's transactions are being processed by
6-26 the certified service provider.
6-27 (c) A person that provides a certified automated system is
7-1 responsible for the proper functioning of that system and is liable
7-2 to this state for underpayments of tax attributable to errors in
7-3 the functioning of the certified automated system. A seller that
7-4 uses a certified automated system remains responsible and is liable
7-5 to this state for reporting and remitting tax.
7-6 (d) A seller that has a proprietary system for determining
7-7 the amount of tax due on transactions and has signed an agreement
7-8 establishing a performance standard for that system is liable for
7-9 the failure of the system to meet the performance standard.
7-10 SECTION 2. This Act takes effect immediately if it receives
7-11 a vote of two-thirds of all the members elected to each house, as
7-12 provided by Section 39, Article III, Texas Constitution. If this
7-13 Act does not receive the vote necessary for immediate effect, this
7-14 Act takes effect September 1, 2001.