| TO: | Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means |
| FROM: | John S O'Brien, Director, Legislative Budget Board |
| IN RE: | SB1798 by West (Relating to retailers engaged in business in this state for purposes of sales and use taxes.), As Engrossed |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2012 | $8,000,000 |
| 2013 | $12,000,000 |
| 2014 | $14,000,000 |
| 2015 | $17,000,000 |
| 2016 | $20,000,000 |
| Fiscal Year | Probable Revenue Gain from General Revenue Fund 1 |
Probable Revenue Gain from Cities |
Probable Revenue Gain from Transit Authorities |
Probable Revenue Gain from Counties and Special Districts |
|---|---|---|---|---|
| 2012 | $8,000,000 | $1,600,000 | $500,000 | $300,000 |
| 2013 | $12,000,000 | $2,300,000 | $700,000 | $400,000 |
| 2014 | $14,000,000 | $2,700,000 | $800,000 | $500,000 |
| 2015 | $17,000,000 | $3,300,000 | $1,000,000 | $600,000 |
| 2016 | $20,000,000 | $3,900,000 | $1,200,000 | $700,000 |
The bill would amend Chapter 151 of the Tax Code, regarding the sales and use tax.
The bill would amend Section 151.008(b) to provide that the terms "seller" and "retailer" include a person who, by agreement with an owner of tangible personal property, has been entrusted with possession of and authority to sell, lease, or rent the property without additional action on the part of the owner.
The bill would amend Section 151.107(a)(2) to provide that a retailer engaged in business in this state includes a retailer with a representative or other agent in the state fulfilling orders for a taxable item.
The bill would amend Section 151.107(a)(3) to provide that a retailer engaged in business in this state includes a retailer who derives receipts or receives compensation from the sale, use, lease, or rental of tangible personal property in the state.
The bill would amend Section 151.107(a) by adding new Subdivision (7) to provide that a retailer engaged in business in this state includes a retailer who holds a substantial ownership in, or is owned in whole or substantial part by, a person who maintains a business location in this state if the retailer sells substantially the same product line and does so under substantially the same business name as the related retailer or if the Texas facilities or employees of the related person in this state are used to advertise, promote, or facilitate sales by the retailer or are used to maintain a marketplace in this state for the retailer, including exchanging returned merchandise.
The bill would amend Section 151.107(a) by adding new Subdivision (8) to provide that a retailer engaged in business in this state includes a retailer who holds a substantial ownership in, or is owned in whole or substantial part by, a person that maintains a distribution house, sales house, warehouse, or similar location in this state at which business is conducted and that delivers property sold by the retailer.
The bill would amend Section 151.107 by adding new Subsection (a-1) to provide for 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 bill would amend Section 151.107 by adding new Subsection (d) to provide that "affiliated group" has the meaning assigned by Section 171.0001, that "ownership" includes direct and indirect ownership through a parent entity, subsidiary, or affiliate, and that "substantial" means with respect to an ownership interest, an interest sufficient to require a beneficial owner to file a disclosure statement under 15 U.S.C. Section 78p.
The bill would take effect January 1, 2012.
| Source Agencies: | 304 Comptroller of Public Accounts
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| LBB Staff: | JOB, ESi, KK, SD
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