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A BILL TO BE ENTITLED
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AN ACT
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relating to the sales and use tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 151.313(a) and (c), Tax Code, are |
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amended to read as follows: |
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(a) The following items are exempted from the taxes imposed |
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by this chapter: |
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(1) a drug or medicine, other than insulin, if |
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prescribed or dispensed for a human or animal by a licensed |
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practitioner of the healing arts; |
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(2) insulin; |
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(3) [subject to Subsection (c),] a drug or medicine |
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that is required to be labeled with a "Drug Facts" panel in |
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accordance with regulations of the federal Food and Drug |
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Administration, without regard to whether it is prescribed or |
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dispensed by a licensed practitioner of the healing arts; |
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(4) a hypodermic syringe or needle; |
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(5) a brace; hearing aid or audio loop; orthopedic, |
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dental, or prosthetic device; ileostomy, colostomy, or ileal |
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bladder appliance; or supplies or replacement parts for the listed |
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items; |
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(6) a therapeutic appliance, device, and any related |
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supplies specifically designed for those products, if dispensed or |
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prescribed by a licensed practitioner of the healing arts, when |
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those items are purchased and used by an individual for whom the |
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items listed in this subdivision were dispensed or prescribed; |
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(7) corrective lens and necessary and related |
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supplies, if dispensed or prescribed by an ophthalmologist or |
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optometrist; |
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(8) specialized printing or signalling equipment used |
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by the deaf for the purpose of enabling the deaf to communicate |
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through the use of an ordinary telephone and all materials, paper, |
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and printing ribbons used in that equipment; |
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(9) a braille wristwatch, braille writer, braille |
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paper and braille electronic equipment that connects to computer |
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equipment, and the necessary adaptive devices and adaptive computer |
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software; |
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(10) each of the following items if purchased for use |
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by the blind to enable them to function more independently: a slate |
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and stylus, print enlarger, light probe, magnifier, white cane, |
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talking clock, large print terminal, talking terminal, or harness |
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for guide dog; |
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(11) hospital beds; |
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(12) blood glucose monitoring test strips; |
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(13) an adjustable eating utensil used to facilitate |
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independent eating if purchased for use by a person, including a |
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person who is elderly or physically disabled, has had a stroke, or |
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is a burn victim, who does not have full use or control of the |
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person's hands or arms; |
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(14) subject to Subsection (d), a dietary supplement; |
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and |
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(15) intravenous systems, supplies, and replacement |
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parts used in the treatment of humans. |
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(c) A product is a drug or medicine for purposes of this |
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section if[:
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[(1)] the product: |
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(1) [(A)] is intended for use in the diagnosis, cure, |
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mitigation, treatment, or prevention of disease, illness, injury, |
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or pain; |
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(2) [(B)] is applied to the human body or is a product |
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that a human ingests or inhales; |
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(3) [(C)] is not an appliance or device; and |
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(4) [(D)] is not food[; or
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[(2) the product is labeled or required to be labeled
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with a "Drug Facts" panel in accordance with regulations of the
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federal Food and Drug Administration]. |
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SECTION 2. Section 151.3162(b), Tax Code, is amended to |
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read as follows: |
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(b) The following items are exempted from the tax imposed by |
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this chapter: |
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(1) seedlings of trees [commonly] grown for commercial |
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timber; |
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(2) defoliants, desiccants, equipment, fertilizers, |
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fungicides, herbicides, insecticides, and machinery exclusively |
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used in the production of timber to be sold in the regular course of |
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business; |
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(3) machinery and equipment used in, and pollution |
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control equipment required as a result of, the processing, packing, |
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or marketing of timber products by an original producer if: |
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(A) the processing, packing, or marketing occurs |
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at or from a location operated by the original producer; |
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(B) at least 50 percent of the value of the timber |
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products processed, packed, or marketed at or from the location is |
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attributable to products produced by the original producer and not |
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purchased or acquired from others; and |
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(C) the original producer does not process, pack, |
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or market for consideration timber products that belong to another |
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person with a value greater than five percent of the total value of |
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the timber products processed, packed, or marketed by the producer; |
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and |
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(4) tangible personal property sold or used to be |
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installed as a component of an underground irrigation system |
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exclusively used in the production of timber to be sold in the |
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regular course of business. |
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SECTION 3. Sections 151.328(a) and (c), Tax Code, are |
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amended to read as follows: |
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(a) Aircraft are exempted from the taxes imposed by this |
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chapter if: |
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(1) sold to a person using the aircraft as a |
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certificated or licensed carrier of persons or property; |
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(2) sold to a person who: |
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(A) has a sales tax permit issued under this |
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chapter; and |
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(B) uses the aircraft for the purpose of |
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providing flight instruction that is: |
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(i) recognized by the Federal Aviation |
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Administration; |
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(ii) under the direct or general |
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supervision of a flight instructor certified by the Federal |
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Aviation Administration; and |
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(iii) designed to lead to a pilot |
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certificate or rating issued by the Federal Aviation Administration |
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or otherwise required by a rule or regulation of the Federal |
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Aviation Administration; |
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(3) sold to a foreign government; or |
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(4) sold in this state to a person for use and |
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registration in another state or nation before any use in this state |
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other than flight training in the aircraft and the transportation |
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of the aircraft out of this state. |
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(c) In this section, "aircraft" does not include a rocket or |
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missile, but does include: |
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(1) a fixed wing, heavier-than-air craft that is |
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driven by propeller or jet and supported by the dynamic reaction of |
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the air against its wings; |
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(2) a helicopter; and |
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(3) an airplane flight simulation training device |
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[simulator] approved by the Federal Aviation Administration [for
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use as a Phase II or higher flight simulator] under Appendices A and |
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B [Appendix H], 14 C.F.R. Part 60 [121]. |
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SECTION 4. Section 321.203, Tax Code, is amended by |
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amending Subsections (b), (c), (d), and (e) and adding Subsection |
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(n) to read as follows: |
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(b) If a retailer has only one place of business in this |
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state, all of the retailer's retail sales of taxable items |
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[tangible personal property] are consummated at that place of |
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business except as provided by Subsection (e). |
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(c) If a retailer has more than one place of business in this |
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state, a sale of a taxable item [tangible personal property] by the |
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retailer is consummated at the retailer's place of business: |
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(1) from which the retailer ships or delivers the item |
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[property], if the retailer ships or delivers the item [property] |
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to a point 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 [property], if the purchaser or lessee takes |
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possession of and removes the item [property] from a place of |
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business of the retailer. |
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(d) If neither the possession of a taxable item [tangible
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personal property] is taken at nor shipment or delivery of the item |
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[property] is made from the retailer's place of business in this |
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state, the sale is consummated at: |
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(1) the retailer's place of business 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 [salesman] who took the order operates. |
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(e) A sale of a taxable item [tangible personal property] is |
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consummated at the location in this state to which the item |
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[property] is shipped or delivered or at which possession is taken |
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by the customer if transfer of possession of the item [property] |
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occurs at, or shipment or delivery of the item [property] |
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originates from, a location in this state other than a place of |
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business of the retailer and if: |
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(1) the retailer is an itinerant vendor who has no |
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place of business in this state; |
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(2) the retailer's place of business where the |
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purchase order is initially received or from which the retailer's |
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agent or employee [salesman] who took the order operates is outside |
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this state; or |
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(3) the purchaser places the order directly with the |
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retailer's supplier and the item [property] is shipped or delivered |
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directly to the purchaser by the supplier. |
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(n) A sale of a service described by Section 151.0047 to |
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remodel, repair, or restore nonresidential real property is |
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consummated at the location of the job site. |
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SECTION 5. Section 323.102(c), Tax Code, is amended to read |
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as follows: |
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(c) A tax imposed under Section 323.105 of this code or |
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Chapter 326 or 383, Local Government Code, takes effect on the first |
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day of the first calendar quarter after the expiration of the first |
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complete calendar quarter occurring after the date on which the |
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comptroller receives a notice of the action as required by Section |
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323.405(b). |
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SECTION 6. Section 323.203, Tax Code, is amended by |
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amending Subsections (b), (c), (d), and (e) and adding Subsection |
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(m) to read as follows: |
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(b) If a retailer has only one place of business in this |
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state, all of the retailer's retail sales of taxable items |
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[tangible personal property] are consummated at that place of |
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business except as provided by Subsection (e). |
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(c) If a retailer has more than one place of business in this |
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state, a sale of a taxable item [tangible personal property] by the |
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retailer is consummated at the retailer's place of business: |
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(1) from which the retailer ships or delivers the item |
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[property], if the retailer ships or delivers the item [property] |
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to a point 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 [property], if the purchaser or lessee takes |
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possession of and removes the item [property] from a place of |
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business of the retailer. |
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(d) If neither the possession of a taxable item [tangible
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personal property] is taken at nor shipment or delivery of the item |
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[property] is made from the retailer's place of business in this |
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state, the sale is consummated at: |
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(1) the retailer's place of business 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 [salesman] who took the order operates. |
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(e) A sale of a taxable item [tangible personal property] is |
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consummated at the location in this state to which the item |
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[property] is shipped or delivered or at which possession is taken |
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by the customer if transfer of possession of the item [property] |
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occurs at, or shipment or delivery of the item [property] |
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originates from, a location in this state other than a place of |
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business of the retailer and if: |
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(1) the retailer is an itinerant vendor who has no |
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place of business in this state; |
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(2) the retailer's place of business where the |
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purchase order is initially received or from which the retailer's |
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agent or employee [salesman] who took the order operates is outside |
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this state; or |
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(3) the purchaser places the order directly with the |
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retailer's supplier and the item [property] is shipped or delivered |
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directly to the purchaser by the supplier. |
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(m) A sale of a service described by Section 151.0047 to |
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remodel, repair, or restore nonresidential real property is |
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consummated at the location of the job site. |
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SECTION 7. The following sections of the Tax Code are |
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repealed: |
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(1) Section 151.0232; |
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(2) Section 151.103(d); |
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(3) Section 151.202(c); |
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(4) Section 321.203(l); and |
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(5) Section 323.203(l). |
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SECTION 8. The change in law made by this Act does not |
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affect tax liability accruing before the effective date of this |
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Act. That liability continues in effect as if this Act had not been |
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enacted, and the former law is continued in effect for the |
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collection of taxes due and for civil and criminal enforcement of |
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the liability for those taxes. |
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SECTION 9. This Act takes effect September 1, 2007. |