By: West  S.B. No. 1798
         (In the Senate - Filed March 11, 2011; March 23, 2011, read
  first time and referred to Committee on Finance; April 21, 2011,
  reported adversely, with favorable Committee Substitute by the
  following vote:  Yeas 10, Nays 1; April 21, 2011, sent to printer.)
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1798 By:  West
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to retailers engaged in business in this state for
  purposes of sales and use taxes.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subsection (b), Section 151.008, Tax Code, is
  amended to read as follows:
         (b)  "Seller" and "retailer" include:
               (1)  a person in the business of making sales at auction
  of tangible personal property owned by the person or by another;
               (2)  a person who makes more than two sales of taxable
  items during a 12-month period, including sales made in the
  capacity of an assignee for the benefit of creditors or receiver or
  trustee in bankruptcy;
               (3)  a person regarded by the comptroller as a seller or
  retailer under Section 151.024 [of this code];
               (4)  a hotel, motel, or owner or lessor of an office or
  residential building or development that contracts and pays for
  telecommunications services for resale to guests or tenants; [and]
               (5)  a person who engages in regular or systematic
  solicitation of sales of taxable items in this state by the
  distribution of catalogs, periodicals, advertising flyers, or
  other advertising, by means of print, radio, or television media,
  or by mail, telegraphy, telephone, computer data base, cable,
  optic, microwave, or other communication system for the purpose of
  effecting sales of taxable items; and
               (6)  a person who, under an agreement with another
  person, is:
                     (A)  entrusted with possession of tangible
  personal property with respect to which the other person has title
  or another ownership interest; and
                     (B)  authorized to sell, lease, or rent the
  property, or otherwise permit access to or use of the property,
  without additional action by the person having title to or another
  ownership interest in the property.
         SECTION 2.  Section 151.107, Tax Code, is amended by
  amending Subsection (a) and adding Subsections (a-1) and (d) to
  read as follows:
         (a)  For the purpose of this subchapter and in relation to
  the use tax, a retailer is engaged in business in this state if the
  retailer:
               (1)  maintains, occupies, or uses in this state
  permanently, temporarily, directly, or indirectly or through a
  subsidiary or agent by whatever name, an office, place of
  distribution, sales or sample room or place, warehouse, storage
  place, or any other location where [place of] business is
  conducted;
               (2)  has a representative, agent, salesman, canvasser,
  or solicitor operating in this state under the authority of the
  retailer or its subsidiary for the purpose of selling, fulfilling,
  or delivering or the taking of orders for a taxable item;
               (3)  derives receipts or receives compensation
  [rentals] from the sale, use, [a] lease, or rental of tangible
  personal property situated in this state;
               (4)  engages in regular or systematic solicitation of
  sales of taxable items in this state by the distribution of
  catalogs, periodicals, advertising flyers, or other advertising,
  by means of print, radio, or television media, or by mail,
  telegraphy, telephone, computer data base, cable, optic,
  microwave, or other communication system for the purpose of
  effecting sales of taxable items;
               (5)  solicits orders for taxable items by mail or
  through other media and under federal law is subject to or permitted
  to be made subject to the jurisdiction of this state for purposes of
  collecting the taxes imposed by this chapter;
               (6)  has a franchisee or licensee operating under its
  trade name if the franchisee or licensee is required to collect the
  tax under this section; [or]
               (7)  holds a substantial ownership interest in, or is
  owned in whole or substantial part by, a business entity that
  maintains a location in this state at which business is conducted
  and if:
                     (A)  the retailer sells the same or a
  substantially similar line of products as the business entity with
  the location in this state and sells those products under a business
  name that is the same or substantially similar to the business name
  of the business entity with the location in this state; or
                     (B)  the Texas facilities, Texas employees, or
  other representatives of the business entity with the location in
  this state are used to:
                           (i)  advertise, promote, or facilitate sales
  by the retailer to consumers; or
                           (ii)  perform any other activity on behalf
  of the retailer that is intended to establish or maintain a
  marketplace for the retailer in this state, including receiving or
  exchanging returned merchandise;
               (8)  holds a substantial ownership interest in, or is
  owned in whole or substantial part by, a business entity that:
                     (A)  maintains in this state a distribution house,
  sales house, warehouse, or similar location at which business is
  conducted; and
                     (B)  delivers property sold by the retailer or an
  affiliate of the retailer to consumers; or
               (9)  otherwise does business in this state.
         (a-1)  For the purpose of this subchapter and in relation to
  the use tax, there is a rebuttable presumption that a retailer that
  is part of an affiliated group is engaged in business in this state
  if another member entity of the affiliated group is a retailer
  engaged in business in this state. The presumption may be rebutted
  by evidence that, during the preceding 12-month period, the other
  member entity that is a retailer engaged in business in this state
  did not engage in any activity described by this section on behalf
  of the retailer to which the presumption applies.
         (d)  In this section:
               (1)  "Affiliated group" has the meaning assigned by
  Section 171.0001.
               (2)  "Ownership" includes:
                     (A)  direct ownership; and
                     (B)  indirect ownership through a parent entity,
  subsidiary, or affiliate.
               (3)  "Substantial" means, with respect to an ownership
  interest, an interest in an entity that is at least equal to the
  degree of ownership or equity interest that would require a
  beneficial owner to file a disclosure statement under 15 U.S.C.
  Section 78p or a successor to that statute.
         SECTION 3.  The change in law made by this Act does not
  affect tax liability accruing before the effective date of this
  Act. That liability continues in effect as if this Act had not been
  enacted, and the former law is continued in effect for the
  collection of taxes due and for civil and criminal enforcement of
  the liability for those taxes.
         SECTION 4.  This Act takes effect January 1, 2012.
 
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