By: Lavender H.B. No. 3742
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  to repeal certain state sales, use, excise, franchise, severance,
  production, occupations, gross receipts and inheritance taxes, to
  repeal or limit certain local sales, use, excise and ad valorem
  property taxes, to enact a statewide and local value added tax, and
  to reform school finance and administration; providing penalties.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1.  REPEAL OF CERTAIN STATE TAXES
         SECTION 1.01.  Subject to Sections 1.02 and 1.03 of this
  Article, and effective on and after September 1, 2013 (as used in
  this Article 1, the "Effective Date"), TAX CODE, TITLE 2, STATE
  TAXATION, is amended as set forth below.
         (A)  SUBTITLE E, SALES, EXCISE AND USE TAXES, is amended as
  set forth below.
               (1)  Chapter 151, LIMITED SALES, EXCISE AND USE TAX, is
  repealed in its entirety.
               (2)  Chapter 152, TAXES ON SALE, RENTAL AND USE OF MOTOR
  VEHICLES, is repealed in its entirety.
               (3)  Chapter 154, CIGARETTE TAX, is repealed in its
  entirety.
               (4)  Chapter 155, CIGARS AND TOBACCO PRODUCTS TAX, is
  repealed in its entirety.
               (5)  Chapter 156, HOTEL OCCUPANCY TAX, is repealed in
  its entirety.
               (6)  Chapter 158, MANUFACTURED HOUSING SALES AND USE
  TAX, is repealed in its entirety.
               (7)  Chapter 159, CONTROLLED SUBSTANCES TAX, is
  repealed in its entirety.
               (8)  Chapter 160, TAXES ON SALES AND USE OF BOATS AND
  BOAT MOTORS, is repealed in its entirety.
               (9)  Chapter 161, FIREWORKS TAX, is repealed in its
  entirety.
               (10)  Chapter 162, MOTOR FUEL TAXES, is repealed in its
  entirety.
         (B)  SUBTITLE F, Chapter 171, FRANCHISE TAX, is repealed in
  its entirety.
         (C)  SUBTITLE G, GROSS RECEIPTS TAXES, is amended as set
  forth below.
               (1)  Chapter 181, CEMENT PRODUCTION TAX, is repealed in
  its entirety.
               (2)  Chapter 182, MISCELLANEOUS GROSS RECEIPTS TAXES,
  is repealed in its entirety.
               (3)  Chapter 183, MIXED BEVERAGE TAX, is repealed in
  its entirety.
         (D)  SUBTITLE H, BUSINESS PERMIT TAXES, is amended as set
  forth below.
               (1)  Chapter 191, SUBCHAPTERS E, F, G AND H are repealed
  in their entirety.
         (E)  SUBTITLE I, SEVERANCE TAXES, is amended as set forth
  below.
               (1)  Chapter 201, GAS PRODUCTION TAX, is repealed in
  its entirety.
               (2)  Chapter 202, OIL PRODUCTION TAX, is repealed in
  its entirety.
               (3)  Chapter 203, SULPHUR PRODUCTION TAX, is repealed
  in its entirety.
               (4)  Chapter 204, TAX CREDIT FOR NEW FIELD DISCOVERIES,
  is repealed in its entirety.
         (F)  SUBTITLE J, INHERITANCE TAX, is amended as s3et forth
  below.
               (1)  Chapter 211, INHERITANCE TAXES, is repealed in its
  entirety.
         SECTION 1.02.  
         (A)  Subject to the provisions of Section 1.02(B) of this
  Article, the repeal of the various Tax Code chapters and sections
  referenced in this Article shall be prospective in application only
  and without prejudice to any rights and obligations of taxpayers,
  or the amounts owed to and the authorities of the comptroller or of
  this state, accruing or arising with respect to periods prior to the
  Effective Date, including but not limited to refunds, adjustments
  and similar items that would otherwise have been payable by or on
  behalf of the comptroller on or after the Effective Date.
         (B)  Notwithstanding the foregoing, but without prejudice to
  any other applicable limitation of actions, expiration or "sunset"
  provision, no judicial or administrative enforcement action shall
  be commenced by any authority of this state or any of its political
  subdivisions under the provisions so repealed on or after the fifth
  anniversary of the Effective Date.
         SECTION 1.03.
         (A)  Except as otherwise expressly provided in Section
  1.03(B) of this Article, the comptroller shall make a determination
  as to the amounts of revenues that, in the fiscal year of enactment,
  were allocated to funds and accounts, or to municipalities,
  counties or other bodies, for which special allocation had been
  made under the provisions repealed by this Article 1, and shall,
  with such frequency as would otherwise have been applicable under
  the provisions so repealed, cause like amounts to be deposited out
  of the general revenue fund to the credit of such specially
  allocated funds and accounts, or issue a warrant drawn on the
  general revenue fund to such municipalities, counties or other
  bodies, as applicable, during subsequent fiscal periods until entry
  into effect in each case of any contrary provision by act of the
  legislature. Any limitations on use by the recipients of such funds
  under the provisions so repealed shall continue in effect under
  this section until entry into effect in each case of any contrary
  provision by act of the legislature.
         (B)  Notwithstanding the foregoing, the comptroller shall
  not continue to allocate or pay any amounts allocated under the
  repealed provisions for the purpose of administration, collection
  and/or enforcement of any taxes so repealed.
  ARTICLE 2.
  STATE VALUE ADDED TAX
         SECTION 2.01.  Subject to Section 2.02 of this Article, and
  effective on and after September 1, 2013 (as used in this Article 1,
  the "Effective Date"),TAX CODE, TITLE 2, STATE TAXATION, is amended
  by adding new Subchapter K to read as follows:
  TAX CODE
  TITLE 2.  STATE TAXATION
  SUBTITLE K.  STATE VALUE ADDED TAX
  CHAPTER 220.  VALUE ADDED TAX
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 220.001.  SHORT TITLE. This chapter may be cited as the
  Texas State Value Added Tax Act.
         Sec. 220.002.  DEFINITIONS. In this chapter:
               (1)  "Comptroller" means the Comptroller of Public
  Accounts of the State of Texas.
               (2)  "In this state" means within the exterior limits
  of Texas and includes all territory within these limits ceded to or
  owned by the United States.
               (3)  "Local taxing unit" means any county,
  municipality, school district, special district or authority
  (including but not limited to a junior college district, a hospital
  district, a district created by or pursuant to the Water Code, a
  mosquito control district, a fire prevention district, a crime
  control district, a noxious weed control district, a transportation
  district or authority) or any other political unit of this state,
  whether created by or pursuant to the constitution or a local,
  special, or general law, that is authorized to impose and is
  imposing value added taxes even if the governing body of another
  political unit determines the tax rate for the unit or otherwise
  governs its affairs.
               (4)  "Municipality" means any incorporated city, town
  or village, including but not limited to a home-rule city.
               (5)  "Person" means any individual natural person or
  any partnership, corporation, limited liability company, trust, or
  other legal entity.
               (6)  "Place of business of the taxpayer" means an
  established outlet, office, or location operated by the taxpayer or
  the taxpayer's agent or employee for the purpose of receiving
  orders for supply of services or property and includes any location
  at which three or more orders are received by the taxpayer during a
  calendar year. A warehouse, storage yard, or manufacturing plant
  is not a "place of business of the taxpayer" unless at least three
  orders are received by the taxpayer during the calendar year at the
  warehouse, storage yard, or manufacturing plant. An outlet, office,
  facility, or any location that contracts with a commercial business
  to process for that business invoices, purchase orders, bills of
  lading, or other equivalent records onto which value added tax is
  added, including an office operated for the purpose of buying and
  selling taxable services or property to the commercial business, is
  not a "place of business of the taxpayer" if the comptroller
  determines that the outlet, office, facility, or location functions
  or exists to avoid the tax imposed by this chapter or to rebate a
  portion of the tax imposed by this chapter to the contracting
  business. Notwithstanding any other provision of this subdivision,
  a kiosk is not a "place of business of the taxpayer." In this
  subdivision, "kiosk" means a small stand-alone area or structure
  that:
                     (A)  is used solely to display merchandise or to
  submit orders for taxable services or property from a data entry
  device, or both;
                     (B)  is located entirely within a location that is
  a place of business of another taxpayer, such as a department store
  or shopping mall; and
                     (C)  at which taxable goods or services are not
  available for immediate delivery to a customer.
               (7)  "Place of supply" means:
                     (A)  in the case of goods and other tangible
  personal property, the location in this state at which the customer
  or its agent acquires actual custody and control of such goods or
  other tangible personal property,
                     (B)  in the case of services or intangible
  personal property, the taxpayer's place of business in this state
  or, if more than one, (i) the place of business in this state where
  the order is first placed by the customer, provided that the order
  is placed in person or, if (i) does not apply, (ii) the place of
  business in this state most involved in consummating the supply in
  question or, if neither (i) nor (ii) apply, the location in this
  state at which the service or intangible personal property is
  performed or otherwise delivered, and
                     (C)  in the case of real property, including but
  not limited to all property in the nature of fixtures thereto, the
  situs of such property in this state.
               (8)  "Service" includes, without limitation of its more
  general meaning, any service received by the customer either
  directly or indirectly through any electronic, digital or
  telephonic medium or other means of remote access, and, for the
  avoidance of doubt, includes electronic delivery or transmission of
  data, software, music, video, photographs, writings or other
  informational content or interactive service.
               (9)  "Supply" means to sell, transfer, barter,
  exchange, license, let, lease, loan, rent or render to any other
  person any service or property in consideration for payment or
  other receipt of value.
               (10)  "Tangible personal property" means personal
  property that can be seen, weighed, measured, felt, or touched or
  that is perceptible to the senses in any other manner.
               (11)  (A) "Taxable receipts" means the aggregate value
  of payments or other consideration received by a taxpayer on
  account of its supply in this state of services and property on
  which the value added tax is imposed under this chapter, without a
  deduction for the cost of:
                           (i)  the service or property supplied;
                           (ii)  the materials used, labor or service
  employed, interest, losses, or other expenses; or
                           (iii)  transportation or installation
  incident to the supply of the service or property.
                     (B)  "Taxable receipts" does not include:
                           (i)  discounts and refunds given by the
  taxpayer if separately identified to the customer by such means as
  an invoice, billing, sales slip or ticket, or contract,
                           (ii)  the face value of United States coin or
  currency in a sale of that coin or currency in which the total
  consideration given by the customer exceeds the face value of the
  coin or currency, or
                           (iii)  a voluntary gratuity or a reasonable
  mandatory charge for the service of a meal or food products,
  including soft drinks and candy, for immediate human consumption
  when the service charge is separated from the sales price of the
  meal or food product and identified as a gratuity or tip and when
  the total amount of the service charge is disbursed by the employer
  to employees who customarily and regularly provide the service.
                     (C)  The "taxable receipts" arising from
  membership in a private club or organization consist of the dues,
  fees, and other charges and assessments, including initiation fees,
  required for membership or a special privilege, status, or
  membership classification in the club or organization.
               (10)  "Taxpayer" means any person who, but for an
  exemption established for such person under Subchapter D of this
  chapter, would be subject to the value added tax under the terms of
  Section 220.101 or, for purposes of reporting, collections and
  enforcement, under the terms of the provisions permitting direct
  payment by direct payment permit holders.
               (11)  "Value added tax" means any tax so called and
  imposed by this state, any local taxing unit in this state, and any
  transit authority in this state having the power to impose such a
  tax under applicable provisions of the laws of this state.
  [Sections 220.008-220.050 reserved for expansion]
  SUBCHAPTER B.  ADMINISTRATION AND RECORDS
         Sec. 220.051.  RULES. The comptroller shall adopt and
  prescribe reasonable rules and forms that are consistent with this
  chapter for the administration, collection, reporting and
  enforcement of its provisions, including but not limited to rules
  related to reporting requirements under this chapter and
  apportioning supplies of services and property to this state and
  its political subdivisions.
         Sec. 220.052.  EMPLOYEES. The comptroller may employ
  accountants, auditors, investigators, assistants, and clerks for
  the administration of this chapter and may delegate to employees
  the authority to conduct hearings, prescribe rules, and perform
  other duties required by this chapter.
         Sec. 220.053.  RETROACTIVE EFFECT OF RULES. The comptroller
  may prescribe the extent to which a rule or ruling shall be applied
  without retroactive effect.
         Sec. 220.054  INVESTIGATIONS AND AUDITS. (a) The
  comptroller, or another person authorized by the comptroller in
  writing, may examine, copy, and photograph the books, records,
  papers, and equipment of a person who engages in a taxable supply of
  services or property and may investigate the character of the
  business of the person to verify the accuracy of the person's report
  or to determine the amount of tax that may be required to be paid if
  no report has been filed.
         (b)  For the purpose of determining the amount of tax
  collected and payable to the state, the amount of tax accruing and
  due, and whether a tax liability has been incurred under this
  chapter, the comptroller or a person authorized by the comptroller
  may:
               (1)  inspect at any time during business hours any
  business premises where a taxable event has occurred and examine,
  copy, and photograph the books, returns, records, papers, and
  equipment relating to the conduct in question; and
               (2)  require by delivery of written notice to the
  taxpayer or to an employee, representative, or agent of the
  taxpayer that, not later than the 10th working day after the date
  the notice is delivered, the taxpayer produce to an agent or
  designated representative of the comptroller for inspection the
  books, records, papers, and returns relating to the taxable
  activity stated in the notice.
         Sec. 220.055.  MANAGED AUDITS. (a) In this section,
  "managed audit" means a review and analysis of invoices, checks,
  accounting records, or other documents or information to determine
  a taxpayer's liability for tax under this chapter.
         (b)  A managed audit may be limited to certain categories of
  liability under this chapter, including tax on:
               (1)  supplies made by the taxpayer of one or more types
  of services or property;
               (2)  supplies made to the taxpayer of one or more types
  of services or property;
               (3)  supplies made to the taxpayer under a direct
  payment permit; or
               (4)  any other category specified in an agreement
  authorized by this section.
         (c)  The comptroller may, in a written agreement, authorize a
  taxpayer to conduct a managed audit under this section. The
  agreement must:
               (1)  be signed by an authorized representative of the
  comptroller and the taxpayer; and
               (2)  specify the period to be audited and the procedure
  to be followed.
         (d)  In determining whether to authorize a managed audit, the
  comptroller may consider, in addition to other factors the
  comptroller considers relevant:
               (1)  the taxpayer's history of tax compliance;
               (2)  the amount of time and resources the taxpayer has
  available to dedicate to the audit;
               (3)  the extent and availability of the taxpayer's
  records; and
               (4)  the taxpayer's ability to pay any expected
  liability.
         (e)  The decision to authorize or not authorize a managed
  audit rests solely with the comptroller.
         (f)  The comptroller may examine records and perform reviews
  that the comptroller determines are necessary before the audit is
  finalized to verify the results of the audit.
         (g)  Unless the audit or information reviewed by the
  comptroller under Subsection (f) discloses fraud or willful evasion
  of the tax, the comptroller may not assess a penalty and may waive
  all or part of the interest that would otherwise accrue on any
  amount identified to be due in a managed audit. This subsection
  does not apply to any amount collected by the taxpayer that was a
  tax or represented to be a tax but that was not reported as such to
  this state.
         (h)  Except as provided by Section 111.104(f), the taxpayer
  is entitled to a refund of any tax overpayment disclosed by a
  managed audit under this section.
         Sec. 220.056.  PERSONS WHO MAY BE REGARDED AS SUPPLIERS. If
  the comptroller determines that it is necessary for the efficient
  administration of this chapter to regard a salesman,
  representative, peddler, or canvasser as the agent of a dealer,
  distributor, supervisor, or employer under whom he operates or from
  whom he obtains the tangible personal property that he supplies to
  others, whether or not the supply is made in his own behalf or for
  the dealer, distributor, supervisor, or employer, the comptroller
  may so regard the salesman, representative, peddler, or canvasser,
  and may regard the dealer, distributor, supervisor, or employer as
  the supplier for the purpose of this chapter.
         Sec. 220.057.  RECORDS REQUIRED TO BE KEPT. (a) All
  taxpayers shall keep the following records in the form the
  comptroller requires:
               (1)  records of all gross receipts, including
  documentation in the form of receipts, shipping manifests,
  invoices, and other pertinent papers, from each taxable supply of
  services or property made by such taxpayer during each reporting
  period;
               (2)  records in the form of receipts, shipping
  manifests, invoices, and other pertinent papers from each taxable
  supply of services or property made to such taxpayer from every
  source during each reporting period;
               (3)  records in the form of receipts, shipping
  manifests, invoices, and other pertinent papers that substantiate
  each claimed deduction, credit, refund or exclusion authorized by
  law; and
               (4)  records in the form of sales receipts, invoices,
  or other equivalent records showing all value added tax, and any
  money represented to be value added tax, received or collected on
  each taxable supply of services or property made by such supplier
  during each reporting period.
         (b)  A record required by Subsection (a) shall be kept for
  not less than four years from the date that it is made unless:
               (1)  the comptroller authorizes in writing its
  destruction at an earlier date; or
               (2)  other applicable provisions of law require that
  the record be kept for a longer period.
         Sec. 220.058.  OUT-OF-STATE RECORDS. A taxpayer is entitled
  to keep or store the taxpayer's records outside this state. If the
  comptroller requests to examine a record kept or stored outside
  this state, the taxpayer shall bring the record into this state for
  the examination or permit the comptroller to examine the record at
  the out-of-state location.
         Sec. 220.059.  CONFIDENTIALITY OF TAX INFORMATION. (a)
  Information in or derived from a record, report, or other
  instrument required to be furnished under this chapter is
  confidential and not open to public inspection, except for
  information set forth in a lien filed under this title or a permit
  issued under this chapter to a supplier and except as provided by
  Subsection (c) of this section.
         (b)  Information secured, derived, or obtained during the
  course of an examination of a taxpayer's books, records, papers,
  officers, or employees, including the business affairs,
  operations, profits, losses, and expenditures of the taxpayer, is
  confidential and not open to public inspection except as provided
  by Subsection (c) of this section.
         (c)  This section does not prohibit:
               (1)  the examination of information, if authorized by
  the comptroller, by another state officer or law enforcement
  officer, by a tax official of another state, by a tax official of
  the United Mexican States, or by an official of the United States if
  a reciprocal agreement exists;
               (2)  the delivery to a taxpayer, or a taxpayer's
  authorized representative, of a copy of a report or other paper
  filed by the taxpayer under this chapter;
               (3)  the publication of statistics classified to
  prevent the identification of a particular report or items in a
  particular report;
               (4)  the use of records, reports, or information
  secured, derived, or obtained by the attorney general or the
  comptroller in an action under this chapter against the same
  taxpayer who furnished the information;
               (5)  the delivery to a successor, receiver, executor,
  administrator, assignee, or guarantor of a taxpayer of information
  about items included in the measure and amounts of any unpaid tax or
  amounts of tax, penalties, and interest required to be collected;
               (6)  the delivery of information to a municipality,
  county, or other local governmental entity in accordance with
  Section 321.3022, 322.2022, or 323.3022; or
               (7)  the release of information in or derived from a
  record, report, or other instrument required to be furnished under
  this chapter by a governmental body, as that term is defined in
  Section 552.003, Government Code.
         Sec. 220.060.  REMEDIES NOT EXCLUSIVE. An action taken by
  the comptroller or the attorney general under this chapter is not an
  election to pursue one remedy to the exclusion of any other remedy
  authorized by this chapter.
         Sec. 220.061.  TAXPAYER'S COLLECTION OF TAX AND ISSUANCE OF
  RECEIPTS AND RECORDS. (a) Each taxpayer shall collect the value
  added tax due on each taxable supply of services and property and,
  upon receiving payment or other value in consideration for such
  supply, issue a written or printed receipt to the customer clearly
  and separately stating both the taxable value of the service or
  property supplied and the percent and amount of each value added tax
  (state and local) imposed with respect to such transaction.
         (b)  When the amount of value added tax is added, it becomes a
  part of the price of the supply, thereby becoming a debt of the
  customer to the taxpayer until paid and, if unpaid, it is
  recoverable at law in the same manner as the original supply price.
         (c)  To the extent so provided by regulations issued by the
  comptroller, such receipts shall also bear the appropriate code(s)
  assigned by the comptroller to the place of supply and local taxing
  unit or units applicable to the transaction in question.
         (d)  Subject to any requirements as to form and manner
  prescribed by the comptroller, receipts may be issued in any medium
  customarily utilized by the taxpayer for this purpose in compliance
  with applicable laws and regulations, including but not limited to
  paper, electronic, optical or other storage or display media,
  provided that they are (i) amenable to retention of copies in the
  taxpayer's records, as well as the permanent storage and ready
  access and review of such copies for purposes of audit, and (ii)
  amenable to being furnished to and retained by the customer.
         (e)  Taxpayers shall maintain adequate records of all such
  taxable transactions in the manner, and for the time periods,
  established by applicable regulations issued by the comptroller,
  which shall be in such form and detail as shall be sufficient for
  audit as necessary at all times during the periods over which the
  comptroller has the right to require audits of the taxpayer's
  taxable receipts and related transactions.
  [Sections 220.062-220.100 reserved for expansion]
  SUBCHAPTER C. IMPOSITION OF VALUE ADDED TAX
         20.101. VALUE ADDED TAX IMPOSED. A value added tax is imposed
  on any person who in this state supplies any service or property by
  in the ordinary course of a trade or business in which the person
  engages for the purpose of profit.
         Sec. 220.102.  LIABILITY FOR VALUE ADDED TAX. Value added
  tax imposed under this chapter is a liability of the taxpayer, which
  accrues at the time of supply and thereupon becomes payable in
  accordance with the accounting, reporting, remittance, collection
  and enforcement provisions of this chapter and regulations issued
  by the comptroller pursuant to this chapter.
         Sec. 220.104.  RATE OF TAX. Except in cases where a
  different rate is deemed to apply by the express provisions of this
  chapter, the rate of value added tax imposed under this chapter
  equals seven percent (7%) of the taxpayer's taxable receipts
  attributable to any applicable tax period.
  [Sections 220.105-220.150 reserved for expansion]
  SUBCHAPTER D.  EXEMPTIONS
         Sec. 220.151.  EXEMPTION -- SMALL BUSINESSES. A person is
  exempted from the tax imposed by this chapter for any calendar
  quarter in which:
               (1)  the amount of value added tax computed for the
  person during that calendar quarter is less than $1000; or
               (2)  the amount of the person's total taxable receipts
  during the 12-month period preceding the end of the calendar
  quarter is less than or equal to $100,000.
         Sec. 220.152.  EXEMPTION -- GOVERNMENTAL ENTITIES. Each of
  the following governmental entities is exempted from the tax
  imposed by this chapter on services or property supplied by such
  entities to other persons:
               (1)  the United States;
               (2)  an unincorporated instrumentality of the United
  States;
               (3)  a corporation that is an agency or instrumentality
  of the United States and is wholly owned by the United States or by
  another corporation wholly owned by the United States;
               (4)  this state;
               (5)  a county, municipality, school district, special
  district, or other political subdivision of this state;
               (6)  another state, district or territory of the United
  States, or a governmental unit of such state, district or
  territory.
         Sec. 220.153.  EXEMPTION -- RELIGIOUS, EDUCATIONAL, AND
  PUBLIC SERVICE ORGANIZATIONS. (a) Each of the following types of
  entities is exempted from the tax imposed by this chapter on
  services or property supplied by such entities to other persons:
               (1)  an organization created for religious,
  educational, or charitable purposes if no part of the net earnings
  of the organization benefits a private shareholder or individual;
               (2)  an organization qualifying for an exemption from
  federal income taxes under Section 501(c)(3), (4), (8), (10) or
  (19), Internal Revenue Code, if the service or property supplied by
  the organization relates to its exempt purpose and no part of the
  proceeds go to benefit a private individual except as a part of the
  services of a purely public charity;
               (3)  a nonprofit corporation organized under the laws
  of this state for the purpose of encouraging agriculture by the
  maintenance of public fairs and exhibitions of livestock if no
  individual receives a private benefit; or
               (4)  a nonprofit organization engaged exclusively in
  providing athletic competition among persons under 19 years old if
  no financial benefit goes to an individual or shareholder;
               (5)  a company, department, or association organized
  for the purpose of answering fire alarms and extinguishing fires or
  for the purpose of answering fire alarms, extinguishing fires, and
  providing emergency medical services, the members of which receive
  no compensation or only nominal compensation for their services
  rendered; or
               (6)  a chamber of commerce or a convention and tourist
  promotional agency representing at least one Texas city or county
  if the chamber of commerce or the agency is not organized for profit
  and no part of its net earnings inures to a private shareholder or
  other individual.
         (b)  The sale of, or contracting for the sale of, concessions
  at an event conducted by an organization exempted under Subsection
  (a)(4) of this section does not prevent the application of the
  exemption to that organization.
         (c)  A nonprofit hospital or hospital system that qualifies
  for an exemption under Subsection (a)(2) shall provide community
  benefits that include charity care and government-sponsored
  indigent health care as set forth in Subchapter D, Chapter 311,
  Health and Safety Code.
         (d)  For purposes of obtaining a refund of or claiming a
  credit for taxes paid under this chapter on the basis of an
  exemption under this section, an organization is not considered
  exempted from the taxes imposed by this chapter before the earlier
  of:
               (1)  the date the organization applied for the
  exemption with the comptroller; or
               (2)  the date of assessment of the organization's tax
  liability by the comptroller as a result of an audit, as applicable.
  [Sections 220.154-220.200 reserved for expansion]
  SUBCHAPTER E. EXCLUSIONS
         Sec. 220.201.  SERVICES AND/OR PROPERTY EXCLUDED FROM THE
  VALUE ADDED TAX.  The services and property specified in this
  subchapter E are excluded from the application of the tax imposed by
  this chapter:
         Sec. 220.202.  MONETARY INSTRUMENTS, FINANCIAL ASSETS AND
  INVESTMENTS.
         (a)  The issuance, transfer, assignment or exchange of
  property in the nature of monetary instruments or financial assets
  and investments are excluded from the application of the value
  added tax.
         (b)  As used in this section, the term "monetary instruments"
  means currency, coin, checks, drafts and other negotiable
  instruments, money orders, cash cards or other instruments used
  generally as an equivalent substitute for cash, as well as wire
  transfers, money transmissions and similar transactions effected
  via electronic communication networks.
         (c)  As used in this section, the term "financial assets and
  investments" includes:
               (1)  insurance coverage for which a premium is paid or
  commissions paid to insurance agents for the sale of insurance or
  annuities;
               (2)  corporate shares, partnership interests,
  beneficial interest in a trust, or other ownership interests in a
  legal entity, whether certificated or uncertificated;
               (3)  bonds, debentures, notes, or other evidence of
  indebtedness or promises to pay value;
               (4)  investments in any open-end investment company, as
  defined by the Investment Company Act of 1940 (15 U.S.C. Section
  80a-1 et seq.), that is subject to that Act and that is registered
  under The Texas Securities Act; and
               (5)  the account value of interests in pension funds,
  brokerage funds, deposit accounts and distributions therefrom;
  provided, that the constituent materials and services utilized to
  produce physical representations of such instruments are not so
  excluded when sold in bulk or customized for subsequent use.
         (d)  The exclusion of services and property by this section
  does not operate to exclude any related service or property,
  whether or not such related service or property is supplied at the
  time of, or in connection with, or in the supply of the excluded
  service or property. For the avoidance of doubt, fees, charges,
  commissions, premiums, interest or other payments to which the
  taxpayer is entitled above and beyond the principal or investment
  value of the financial asset or investment to which payments relate
  are not excluded from the application of the value added tax.
         Sec. 220.203.  INTERCOMPANY SERVICES.
         (a)  Service or property transactions among affiliated
  entities, at least one of which is a corporation, that report their
  income to the Internal Revenue Service on a single consolidated
  return for the tax year in which the transaction occurs, are
  excluded from the application of the value added tax. For this
  purpose, "affiliated entity" includes an entity that would be
  classified as a member of an affiliated group under 26 U.S.C.
  Section 1504 but for the exclusions provided by that section.
         (b)  Service or property transactions between a legal entity
  disregarded by the Internal Revenue Service and any person
  controlling, controlled by, or under common control with such
  entity are excluded from the application of the value added tax.
         (c)  Services rendered to a legal entity by one or more of its
  directors, officers, managers or other principals in the ordinary
  course of fulfilling their responsibilities in those roles but
  outside of an employment relationship are excluded from the
  application of the value added tax.
         Sec. 220.204.  EMPLOYMENT SERVICES. The following services
  are excluded from the application of the value added tax:
               (1)  services rendered by an employee to his or her
  employer in the ordinary course of the employment relationship for
  which the employee is paid his or her regular wages or salary;
               (2)  a service performed by an employee of a temporary
  employment service as defined by Section 93.001, Labor Code, for an
  employer to supplement the employer's existing work force on a
  temporary basis, when the service is normally performed by the
  employer's own employees, the employer provides all supplies and
  equipment necessary, and the help is under the direct or general
  supervision of the employer to whom the help is furnished; or
               (3)  a service performed by assigned employees of a
  staff leasing company, either licensed under Chapter 91, Labor
  Code, or exempt from the licensing requirements of that chapter,
  for a client company under a written contract that provides for
  shared employment responsibilities between the staff leasing
  company and the client company for the assigned employees, most of
  whom must have been previously employed by the client company.
  The comptroller shall prescribe by rule the minimum percentage of
  assigned employees that must have been previously employed by the
  client company, the minimum time period the assigned employees must
  have been employed by the client company prior to the commencement
  of its contract, and such other criteria as the comptroller may deem
  necessary to properly implement this section.
         Sec. 220.205.  INCIDENTAL TRANSACTIONS. The following
  transactions are excluded from the application of the value added
  tax:
               (1)  less than five incidents of supplying services or
  property during a 12-month period by a person who does not
  habitually engage, or hold himself out as engaging, in the business
  of supplying such services or property;
               (2)  the sale of all or substantially all of the entire
  operating assets of a business or of a separate division, branch, or
  identifiable segment of a business;
               (3)  a transfer of all or substantially all the
  property used by a person in the course of an activity if after the
  transfer the real or ultimate ownership of the property is
  substantially similar to that which existed before the transfer;
               (4)  the supply of tangible personal property by an
  individual if:
                     (A)  the property was originally acquired by the
  individual or a member of the individual's family for the personal
  use of the individual or the individual's family;
                     (B)  the person who does not habitually engage, or
  hold himself out as engaging, in the business of supplying such
  property;
                     (C)  the individual does not employ an auctioneer,
  broker, or factor, other than an online auction, to supply the
  property; and
                     (D)  the total receipts from supplying the
  individual's tangible personal property in a calendar year do not
  exceed $3,000;
               (5)  soliciting orders of the services or property in
  question to be sent outside this state for approval or rejection by
  the vendor and, if approved, to be filled by the vendor from a point
  outside this state, although the act of soliciting such orders may
  itself be considered to constitute a service rendered to the
  vendor.
         Sec. 220.206.  TRANSFERS OF COMMON INTERESTS IN PROPERTY.
  If an interest in property is sold, under the terms of a good faith,
  bona fide contractual relationship, to another person who either
  before or after the sale owned or owns a joint or undivided interest
  in the property with the seller, and if the taxes imposed by this
  chapter have previously been paid on the property, the sale of such
  interest in property is excluded from the taxes imposed by this
  chapter.
         Sec. 220.207.  EXCLUSIONS REQUIRED BY PREVAILING LAW. Any
  supply of service or property that this state is prohibited from
  taxing by the law of the United States, the United States
  Constitution, or the Constitution of Texas is excluded from the
  taxes imposed by this chapter.
  [Sections 220.208-220.250 reserved for expansion]
  SUBCHAPTER F. INPUT TAX AND OUTPUT TAX
         Sec. 220.251.  "INPUT TAX". "Input tax" means, in relation
  to a taxpayer, the aggregate value added tax accrued in respect of
  the services and property supplied to such taxpayer during a given
  calendar quarter, but only to the extent that such services and
  property are used or held for use in the first instance by such
  taxpayer in the ordinary course of its trade or business. The input
  taxes attributable to any such service or property that is diverted
  to personal use of an owner, director, officer or other principal of
  the taxpayer shall be deducted from the input taxes calculated for
  the calendar quarter during which such diversion took place.
         Sec. 220.252.  "OUTPUT TAX". "Ouput tax" means, in relation
  to a taxpayer, the aggregate value added tax accrued in respect of
  the services and property supplied by such taxpayer during a given
  calendar quarter.
  [Sections 220.253-220.300 reserved for expansion]
  SUBCHAPTER G. REPORTS AND PAYMENTS
         Sec. 220.301.  REPORTS. (a) A person required to pay a tax
  under this chapter shall report to the comptroller on the last day
  of January, April, July, and October of each year.
         (b)  The comptroller may require a taxpayer to file a return
  or pay the taxes imposed by this chapter for a period other than a
  monthly period if necessary to ensure the payment or to facilitate
  the collection of the taxes due.
         (c)  A requirement under subsection (b) of this section may
  by rule be made generally applicable to suppliers providing
  amusement services at locations other than the regular business
  establishment of the supplier or to suppliers who provide amusement
  services and who have no regular business establishment in this
  state.
         Sec. 220.302.  CONTENTS AND FORM OF REPORT. (a) A tax
  report required by this chapter must include a statement of:
               (1)  the taxpayer's aggregate taxable receipts;
               (2)  the aggregate value of all taxable supplies of
  services and property made by the taxpayer to its customers,
               (3)  the aggregate value of taxable supplies of
  services and property made to the taxpayer by its suppliers, and
               (4)  the aggregate output taxes and input taxes that
  accrued during the preceding quarterly period;
  together with any other information that the comptroller reasonably
  determines to be necessary for the proper administration of this
  chapter.
         (b)  A report must also itemize the individual taxable
  transaction values and, by reference to the appropriate code(s)
  assigned by the comptroller, the place of supply and local taxing
  unit or units applicable to each of the transactions comprising the
  input and output taxes being reported.
         (c)  A report must also reflect adjustments to previously
  reported amounts made as a result of subsequent review or changes in
  circumstance
         (d)  The comptroller by rule may determine the manner of
  reporting taxable proceeds from rentals and leases of tangible
  personal property.
         (e)  The report must be in the form as prescribed by the
  comptroller.
         (f)  A tax report must be signed by the person required to
  file it or by the person's authorized agent.
         Sec. 220.303.  ACCOUNTING BASIS FOR REPORTS. A taxpayer
  whose regular books are kept on a cash basis, accrual basis, or some
  other generally recognized accounting basis that accurately
  reflects the operation of the business may file the tax reports
  required by this chapter on the same basis that is used for the
  taxpayer's regular books.
         Sec. 220.304.  REPORTS AND PAYMENTS: WHERE MADE. A tax
  report or tax payment shall be delivered to the office of the
  comptroller.
         Sec. 220.305.  METHOD OF REPORTING VALUE ADDED TAX: GENERAL
  RULE. A taxpayer shall compute the value added tax imposed by this
  chapter by multiplying the cumulative percentage value added tax
  rates of all applicable taxing entities (i.e., the state and all
  applicable local taxing units) with respect to each transaction
  times the taxable receipts attributable to each such transaction.
         Sec. 220.306.  METHOD OF REPORTING: SUPPLIERS HAVING SALES
  BELOW TAXABLE AMOUNT. (a) If not less than 50 percent of the total
  receipts of a person from the supply of non-excluded services and
  property comes from separate transactions in which the supply price
  is an amount on which no tax is produced, the supplier may exclude
  the receipts from those transactions when reporting and paying the
  value added tax.
         (b)  A supplier may not exclude any receipts from supplies as
  permitted under aubsection (a) of this section unless the supplier
  has received from the comptroller before the filing of the tax
  report written approval allowing the exclusion, and all receipts
  from otherwise taxable supplies of services and property are
  subject to the tax until the approval is granted.
         (c)  The comptroller shall approve the reporting and
  computation of the value added tax as permitted under Subsection
  (a) of this section by a supplier if the supplier qualifies for the
  exclusion and submits to the comptroller satisfactory evidence that
  the supplier can and will maintain records adequate to substantiate
  the authorized exclusion.
         Sec. 220.307.  DIRECT PAYMENT OF TAX BY CUSTOMER. (a) The
  holder of a direct payment permit issued by the comptroller may give
  a blanket exemption certificate to taxpayers who supply services or
  property to the holder of the direct payment permit. The blanket
  exemption certificate covers all future taxable supplies of
  services or property to the permit holder and relieves the supplier
  of the obligation of collecting the taxes imposed by this chapter
  from the permit holder.
         (b)  A blanket exemption certificate given under this
  section must contain the direct payment permit number and the
  statement that the direct payment permit holder agrees to accrue
  and pay to this state all taxes that are or may become due on the
  taxable items sold under the exemption certificate to the permit
  holder.
         Sec. 220.308.  ISSUANCE OF DIRECT PAYMENT PERMIT. (a) The
  comptroller shall issue a direct payment permit to an applicant for
  the permit who qualifies as provided by Section 220.309 of this
  chapter.
         (b)  The comptroller is the sole judge of an applicant's
  qualifications, and the comptroller's refusal to issue a permit to
  an applicant is not appealable.
         (c)  An applicant for a direct payment permit who has been
  denied the issuance of a permit may:
               (1)  request permission from the comptroller to submit
  an amended application; or
               (2)  submit a new application for a direct payment
  permit after a reasonable period after the denial of the original
  application.
         Sec. 220.309.  APPLICATION FOR DIRECT PAYMENT PERMITS:
  QUALIFICATIONS. (a) A person desiring a direct payment permit must
  file with the comptroller a written application for the permit.
         (b)  The application must be accompanied with:
               (1)  an agreement that is signed by the applicant or a
  responsible officer of an applicant corporation, that is in a form
  prescribed by the comptroller, and that provides that the applicant
  agrees to:
                     (A)  accrue and pay all taxes imposed by this
  chapter on the supply of services and property to the permit holder,
  excluding those supplies that are are excluded from the taxes
  imposed by this chapter;
                     (B)  pay the imposed taxes monthly on or before
  the 20th day of the month following the end of each calendar month;
  and
                     (C)  waive the discount permitted by Section
  220.313 of this code on the payment of all taxes under the direct
  payment permit only;
               (2)  a description, in the amount of detail that the
  comptroller requires, of the accounting method by which the
  applicant proposes to differentiate between taxable and excluded
  transactions; and
               (3)  records establishing that the applicant is a
  responsible person who annually acquires services and/or property
  in taxable supply transactions aggregating $1,800,000 or more.
         Sec. 220.310.  REVOCATION OF DIRECT PAYMENT PERMIT. (a) A
  person to whom a direct payment permit has been issued holds the
  permit as a matter of revocable privilege and not as a matter of
  right. The comptroller on his own initiative may cancel a direct
  payment permit, and the cancellation is not appealable.
         (b)  A person whose direct payment permit is canceled by the
  comptroller is entitled to written notice of the cancellation,
  which shall be sent by the comptroller by registered mail.
         Sec. 220.311.  VOLUNTARY RELINQUISHMENT OF DIRECT PAYMENT
  PERMIT. (a) The holder of a direct payment permit may notify the
  comptroller that the direct payment permit is to be voluntarily
  relinquished.
         (b)  A direct payment permit and the direct payment agreement
  remain valid and enforceable until the comptroller issues a
  termination notice.
         Sec. 220.312.  CANCELLATION OR TERMINATION OF DIRECT PAYMENT
  PERMIT: DUTY OF PERMIT HOLDER. (a) On the receipt of a notice
  issued under Section 220.310 of this chapter canceling a direct
  payment permit or of a notice issued under Section 220.311 of this
  chapter terminating a direct payment permit, the person who held
  the permit shall immediately notify each supplier to whom a blanket
  exemption certificate has been given that the exemption certificate
  is no longer valid.
         (b)  The failure of a person to notify a supplier as required
  by subsection (a) of this section is a failure and refusal to pay
  the taxes imposed by this chapter by the person required to make the
  notification.
         Sec. 220.313.  REIMBURSEMENT TO TAXPAYER FOR TAX
  COLLECTIONS. A taxpayer may deduct and withhold one-half of one
  percent of the amount of taxes due from the taxpayer or direct
  permit holder on a timely return as reimbursement for the cost of
  collecting the taxes imposed by this chapter. The comptroller
  shall provide a card with each form distributed for the collection
  of taxes under this chapter. The card may be inserted by the
  taxpayer with the tax payment to provide for contribution of all or
  part of the reimbursement provided by this section for use as grants
  under Subchapter M, Chapter 56, Education Code. If the taxpayer
  chooses to contribute the reimbursement for the grants, the
  taxpayer shall include the amount of the reimbursement contribution
  with the tax payment. The comptroller shall transfer money
  contributed under this section for grants under Subchapter M,
  Chapter 56, Education Code, to the appropriate fund.
         Sec. 220.314.  DISCOUNT FOR PREPAYMENTS. (a) A taxpayer who
  prepays the taxpayer's tax liability on the basis of a reasonable
  estimate of the tax liability for a quarter in which a prepayment is
  made or for a month in which a prepayment is made may deduct and
  withhold 1.25 percent of the amount of the prepayment in addition to
  the amount permitted to be deducted and withheld under Section
  220.313 of this chapter. A reasonable estimate of the tax liability
  must be at least 90 percent of the tax ultimately due or the amount
  of tax paid in the same quarter, or month, if a monthly prepayer, in
  the last preceding year. Failure to prepay a reasonable estimate of
  the tax will result in the loss of the entire prepayment discount.
         (b)  In order to qualify for the deduction permitted by
  subsection (a) of this section, the taxpayer must make the tax
  prepayment:
               (1)  on or before the 15th day of the second month of
  the calendar quarter for which the prepayment is made if the
  taxpayer pays the tax quarterly; or
               (2)  on or before the 15th day of the month for which
  the prepayment is made if the taxpayer pays the tax monthly.
         (c)  A taxpayer who prepays the tax liability as permitted by
  this section must file a report when due as provided by this
  chapter. The amount of a prepayment made by a taxpayer under this
  section shall be credited against the amount of actual tax
  liability of the taxpayer as shown on the tax report of the
  taxpayer. If there is a tax liability owed by the taxpayer in
  excess of the prepayment credit, the taxpayer shall send to the
  comptroller the remaining tax liability at the time of filing the
  quarterly or monthly report. The taxpayer is entitled to the
  deduction permitted under Section 220.313 of this chapter on the
  amount of the remaining tax liability.
         (d)  If the amount of a prepayment exceeds the actual tax
  liability, the excess of the prepayment shall be credited against
  future tax liability of the taxpayer or refunded to the taxpayer as
  provided by Subchapter C of Chapter 111 of this code.
         Sec. 220.315.  FORFEITURE OF DISCOUNT OR REIMBURSEMENT. If
  a taxpayer fails to file a report required by this chapter when due
  or to pay the tax when due, the taxpayer forfeits any claim to a
  deduction or discount allowed under Section 220.313 or Section
  220.314 of this code.
         Sec. 220.316.  CREDITS AND REFUNDS FOR BAD DEBTS, RETURNED
  MERCHANDISE, AND REPOSSESSIONS. (a) A taxpayer may withhold the
  payment of the tax on a portion of the taxable receipts associated
  with the taxpayer's of a service or property that remains unpaid by
  the customer if:
               (1)  during the reporting period in which the supply
  occurred the taxpayer determines that the unpaid portion will
  remain unpaid;
               (2)  the taxpayer enters the unpaid portion of the
  supply price in the taxpayer's books as a bad debt; and
               (3)  the bad debt is claimed as a deduction for federal
  tax purposes during the same or a subsequent reporting period.
         (b)  If the portion of a debt determined to be bad under
  subsection (a) of this section is paid, the taxpayer shall report
  and pay the tax on the portion during the reporting period in which
  the payment is made.
         (c)  Subject to subsection (e), a supplier or any person who
  extends credit to a purchaser under a supplier's private label
  credit agreement, or an assignee or affiliate of either, is
  entitled to credit or reimbursement for taxes paid on the portion
  of:
               (1)  an account determined to be worthless and actually
  charged off for federal income tax purposes; or
               (2)  the remaining unpaid sales price of a taxable item
  when the item is repossessed under a conditional sales contract.
         (d)  A supplier is entitled to credit for the amount of taxes
  paid on the amount of a refund or credit made to a customer under a
  bona fide agreement in which the price of a taxable supply
  transaction is renegotiated. This credit applies to a refund or
  credit made under an agreement in settlement of a claim for an
  alleged breach of warranty on the taxable supply of tangible
  personal property by the supplier to the person with whom the
  agreement is made.
         (e)  A person is entitled to a credit or reimbursement
  provided by subsection (c) only if:
               (1)  the supplier remits the tax for which the credit or
  reimbursement is sought;
               (2)  all payments on an account are prorated between
  taxable and nontaxable charges; and
               (3)  the supplier or person claiming the credit or
  reimbursement provides detailed records outlining:
                     (A)  the amount the customer contracted to pay;
                     (B)  taxable and nontaxable charges;
                     (C)  the tax collected and remitted;
                     (D)  the unpaid portion of the supply price
  assigned; and
                     (E)  the taxpayer number of the supplier who
  collected and remitted the tax.
         (f)  A person whose volume and character of uncollectible
  accounts warrants an alternative method of substantiating the
  reimbursement or credit may:
               (1)  maintain records other than the records specified
  in subsection (e) if:
                     (A)  the records fairly and equitably apportion
  taxable and nontaxable elements of a bad debt and compute the amount
  of sales tax imposed and remitted with respect to the taxable
  charges remaining unpaid on the debt; and
                     (B)  the comptroller approves the procedures
  used; or
               (2)  implement a system to report its future tax
  responsibilities based on a historical percentage calculated from a
  sample of transactions if:
                     (A)  the system utilizes records provided by the
  person claiming the credit or reimbursement; and
                     (B)  the comptroller approves the procedures
  used.
         (g)  The comptroller may revoke the authorization to report
  under subsection (f)(2) if the comptroller determines that the
  percentage being used is no longer representative because of:
               (1)  a change in law, including a change in the
  interpretation of an existing law or rule; or
               (2)  a change in the taxpayer's business operations.
         (h)  A person claiming a credit or reimbursement under this
  section shall remit tax on any payments received on an account that
  has been written off and claimed as a bad debt.
         (i)  For purposes of this section, "affiliate" means any
  entity or entities that would be classified as a member of an
  affiliated group under 26 U.S.C. Section 1504.
         Sec. 220.316.  CREDIT OR REIMBURSEMENT IN RETURN
  TRANSACTIONS. A supplier is entitled to a credit or reimbursement
  equal to the amount of sales tax refunded to a customer when the
  customer receives a full or partial refund of the sales price of a
  returned taxable item.
         Sec. 220.317.  DETERMINATION OF OVERPAID AMOUNTS. (a) This
  section applies to the value added tax paid in error by a person
  holding a permit under this chapter (1) on supplies of services or
  property made to such person that are excluded from the value added
  tax under the terms of this chapter, or (2) to a supplier exempt
  from the value added tax under the provisions of this chapter.
         (b)  A person to whom this section applies may compute the
  amount of overpayment by use of a projection based on a sampling of
  transactions. The sampling method used must comply with generally
  accepted sampling methods as approved by the comptroller.
         (c)  The person may obtain reimbursement for amounts
  determined to have been overpaid by taking a credit on one or more
  value added tax returns or by filing a claim for refund with the
  comptroller within the limitation period specified by Subchapter D,
  Chapter 111.
         (d)  The person must record the method by which the
  projection and computation were performed and must make available
  on request by the comptroller the records on which the projection
  and computation were based.
         (e)  The comptroller may adopt rules specifying additional
  procedures that must be followed in connection with claiming a
  credit under this section.
         Sec. 220.318.  DETERMINATION OF TAX PAYABLE. (a) The amount
  of value added tax imposed under this chapter and payable by a
  taxpayer shall equal the excess, if any, of the aggregate state and
  local output taxes reported by the taxpayer over the aggregate
  state and local input taxes reported by the taxpayer.
         Sec. 220.319.  TAX PAYMENTS: DUE DATE. Except as provided in
  Section 220.321 of this code, the taxes imposed by this chapter are
  due and payable to the comptroller on the last day of January,
  April, July, and October of each year, except that a tax due for a
  business day that falls in two different calendar quarters is
  allocated to the calendar quarter in which the business day begins.
         Sec. 220.320.  PAYMENT. The tax due for the preceding
  calendar quarter shall accompany the return and is payable to the
  state.
         Sec. 220.321.  PAYMENT OF TAX FOLLOWING BUSINESS
  REORGANIZATION. (a) If a person that begins business on or after
  the first day of the quarter is an incorporation, reincorporation,
  or survivor of a merger of a person or persons that were previously
  subject to a tax under this chapter, its report required under this
  subchapter must show the combined taxable receipts, output tax and
  input tax, respectively, during the preceding quarterly period of
  the person or persons that were incorporated, reincorporated, or
  merged to form the new entity. The value added tax provided for in
  this chapter must be paid on the reported combined value added
  required under this subsection.
         Sec. 220.322.  ADDITIONAL REPORTS. The comptroller may
  require a person required to report under this chapter to supply
  additional or supplemental reports containing information
  necessary to compute the tax due.
         Sec. 220.323.  DETERMINATION AFTER THE FILING OF A REPORT.
  If a person has filed a tax report, the comptroller may issue a
  deficiency determination under Section 111.008 of this code.
         Sec. 220.324.  DETERMINATION IF NO REPORT FILED. (a) If a
  person fails to file a report, the comptroller shall estimate the
  amounts that would have been required to be included in a report
  filed under this chapter for each period or the total period for
  which the person failed to report as required by this chapter.
         (b)  The estimate required by subsection (a) of this section
  may be made on any information available to the comptroller.
         (c)  On the basis of the estimate, the comptroller shall
  compute and determine the amount required to be paid to the state
  for each period.
         (d)  The comptroller shall add to the determination an amount
  equal to 10 percent of the amount computed under subsection (c) of
  this section as a penalty.
         (e)  A determination under this section may be issued for one
  or more periods, and more than one determination may be issued for a
  single period.
         Sec. 220.325.  DETERMINATION WHEN A BUSINESS IS
  DISCONTINUED. If a business is discontinued, the comptroller may
  make a determination of tax liability under this chapter before the
  date a report or tax payment is due with respect to the discontinued
  business.
         Sec. 220.326.  WHEN DETERMINATION BECOMES FINAL. A
  determination made under Section 220.324 or Section 220.325 of this
  chapter becomes final on the expiration of 30 days after the day on
  which the determination was served by personal service or by mail,
  unless a petition for a redetermination is filed before the
  determination becomes final.
         Sec. 220.327.  LIMITATIONS ON DETERMINATION. (a) A notice
  of a deficiency determination must be personally served or mailed
  within the period provided by Subchapter D, Chapter 111 of this code
  after the last day of the calendar month following the close of the
  regular reporting period of the taxpayer for which the amount is
  proposed to be determined or within the period provided by
  Subchapter D, Chapter 111 of this code after the report is filed,
  whichever period expires the later.
         (b)  The limitations provided by subsection (a) of this
  section do not apply to a determination proposed to be made for the
  collection of an amount of value added tax on the taxable supply of
  services or property if a deficiency notice has been given or is
  given for the collection of the use tax on the same taxable supply.
         Sec. 220.328.  OFFSETS. In making a determination, the
  comptroller may offset an overpayment for one or more periods
  against an underpayment, penalty, and interest accrued on the
  underpayment for the same period or one or more other periods. Any
  interest accrued on the overpayment shall be included in the
  offset.
         Sec. 220.329.  PETITION FOR REDETERMINATION. A person
  petitioning for a redetermination of a determination made under
  Section 111.022 must file, before the determination becomes final,
  security as the comptroller requires to ensure compliance with this
  chapter. The security may be sold by the comptroller in the manner
  provided by Subchapter A, Chapter 111.
         Sec. 220.330.  HEARING ON REDETERMINATION. (a) If a
  petition for a redetermination is filed before the determination
  becomes final, the petitioner is entitled on a request stated in the
  petition to an oral hearing on the redetermination and to at least
  20 days' notice of the time and place of the hearing.
         (b)  The comptroller may continue the hearing from time to
  time as is necessary.
         Sec. 220.331.  REDETERMINATION. (a) The comptroller may
  decrease the amount of a determination at any time before the
  determination becomes final.
         (b)  The comptroller may increase the amount of a
  determination that is not final if the additional claim is asserted
  by the comptroller at or before a hearing on a redetermination.
         (c)  If an additional claim is asserted, the petitioner is
  entitled to a 30-day continuance of the hearing to permit the
  petitioner to obtain and present evidence applicable to the items
  on which the additional claim is based.
         Sec. 220.332.  INTEREST. Unpaid taxes imposed by this
  chapter draw interest beginning 60 days after the date on which the
  tax or the amount of the tax required to be collected became due and
  payable to the state.
         Sec. 220.333.  NOTICES. The comptroller shall give notice
  of a determination made under this subchapter promptly as provided
  by Sections 111.008(b) and (c) of this code. Any other notice
  required by this subchapter shall be given in the same manner.
  Notices under this subchapter are effective as provided by Section
  111.008(c) of this code.
  [Sections 220.334-220.350 reserved for expansion]
  SUBCHAPTER H.  REFUNDS AND RELIEF
         Sec. 220.351.  REFUNDS TO EXEMPT ORGANIZATIONS. Any person
  meeting the criteria of an organization exempt under subchapter D
  from the tax imposed under this chapter during any calendar quarter
  shall be entitled to claim a refund from the comptroller of input
  taxes accrued by that organization with respect to the calendar
  quarter in question in accordance with the provisions of this
  subchapter and regulations issued by the comptroller for this
  purpose.
         Sec. 220.352.  FILING OF CLAIMS. (a) The person seeking to
  claim a refund shall file a report with the comptroller on the last
  day of the month following the end of the calendar quarter with
  respect to which such claim relates.
         (b)  The report must include a statement of the person's
  aggregate input taxes accrued during such calendar quarter, and a
  certification to the effect that (i) the services and property on
  the supply of which such input taxes accrued relate to the exempt
  purpose of the person and (ii) such services and/or property has not
  been, is not being and will not be used for the personal benefit of a
  private individual except as part of the services of a purely public
  charity.
         (c)  The report must also include an itemized apportionment
  of the input taxes reported among the various counties,
  municipalities, school districts, special districts and other
  political subdivisions of this state to which such taxes are
  allocable under the provisions of this chapter and regulations
  issued by the comptroller for this purpose. The person filing the
  report shall have discharged its responsibility in this respect if
  it accurately reports the local taxing unit code assigned to such
  supply transactions by the supplier(s) in question and reflected on
  the receipt issued as required by this chapter.
         (d)  A report shall also reflect adjustments to previously
  reported amounts made as a result of subsequent review or changes in
  circumstance, and any credits or deductions resulting from such
  adjustments shall be included in the determinations made under this
  subchapter, but separately identified as such.
         Sec. 220.353.  DETERMINATION AND PAYMENT OF REFUND. The
  comptroller shall determine the extent to which the person filing
  the report is entitled to the refund claim and shall issue payment
  in the amount so determined to the person as soon as practicable
  following such determination.
  [Sections 220.354-220.400 reserved for expansion]
  SUBCHAPTER I. APPORTIONMENT AND ALLOCATION OF VALUE ADDED TAX
  REVENUES
         Sec. 220.401.  ANALYSIS AND COMPILATIONS. (a) The
  comptroller shall conduct such analyses and compilations of reports
  received under this chapter as shall be necessary to properly
  apportion among all of the local taxing units the value added taxes
  collected hereunder on the basis of the place at which the supply of
  the service or property in question is deemed under this chapter to
  have taken place.
         (b)  In performing these calculations, the comptroller shall
  compute:
               (1)  the aggregate value added taxes for each local
  taxing unit that were included in reports of output taxes;
               (2)  the aggregate input taxes reported by each such
  taxpayer as having their place of supply in each local taxing unit;
               (3)  the proportionate attribution to various local
  taxing entities of each such taxpayer's reported aggregate input
  taxes, with such attribution being determined for each such
  taxpayer in proportion to the ratio that the amount determined
  under subdivision (3) for each local taxing unit bears to the amount
  determined under subdivision (2);
               (4)  the aggregate reported input taxes attributed to
  each local taxing unit for all taxpayers under subdivision (3); and
               (5)  the extent to which the amount determined under
  subdivision (1) for each local taxing unit exceeds or falls short of
  the amount determined under subdivision (5) for each same local
  taxing unit.
  The amount so determined under subdivision (5), if an excess, shall
  be credited as an apportionment to the local taxing unit for the
  period in question and, if a shortfall, shall be debited against
  apportionments to the local taxing unit for the period in question.
         Sec. 220.402.  LOCAL TAXING UNIT CODES. For this purpose,
  the comptroller shall establish and maintain a system whereby each
  local taxing unit is assigned a unique alphanumeric code to be
  utilized by all persons filing reports under this chapter in
  reporting the place of supply for all taxable receipts. The
  comptroller shall utilize this coding system in the preparation and
  distribution of reports concerning apportionment among taxing
  entities.
         Sec. 220.403.  AGGREGATION OF TAXES AND REFUNDS. In
  determining the apportionments appropriate for any given calendar
  period, the comptroller shall reduce the reported output taxes
  attributable to each local taxing unit by the amount of refunds,
  credits, deductions or offsets determined to be issuable to
  taxpayers or exempted persons with respect to those reported output
  taxes during that same calendar period on account of exemptions or
  exclusions provided under this chapter.
         Sec. 220.404.  COMPTROLLER TO COLLECT AND ADMINISTER LOCAL
  TAXING UNIT VALUE ADDED TAXES. The comptroller shall administer,
  collect, and enforce any value added tax imposed by a local taxing
  unit under Title 3, Local Taxes. The taxes imposed under this
  chapter and the taxes imposed under Title 3 shall be collected
  together, if both taxes are imposed.
         Sec. 220.405.  COMPTROLLER'S REPORTING DUTIES. (a) The
  comptroller shall make quarterly reports to a local taxing unit
  that has adopted the value added taxes authorized by Title 3, Local
  Taxes, if the local taxing unit requests the reports. A report must
  include the name, address, and account number of each person that
  has remitted to the comptroller a tax payment or claimed a refund
  that has been apportioned to the local taxing unit during the
  quarter covered by the report. The report must also show the results
  of the comptrollers determinations under Section 220.401 with
  respect to such local taxing unit.
         Sec. 220.406.  ALLOCATION OF LOCAL VALUE ADDED TAXES. The
  comptroller shall remit to each local taxing unit the net value
  added taxes apportioned to it under this chapter using such
  procedures and with such frequency as shall be established under
  applicable rules issued by the comptroller. To the extent that any
  local taxing unit's apportionment account shows a deficit for a
  given quarter, the comptroller shall make a reasonable estimate of
  the likelihood of recovery in future periods and, to the extent that
  a continuing deficit is projected for the third calendar quarter
  following the one in question, the local taxing unit shall be
  obligated to remit to the comptroller an amount equal to such
  projected continuing deficit within thirty (30) days following
  notice from the comptroller of such determination.
  [Sections 220.407-220.450 reserved for expansion]
  SUBCHAPTER J. ENFORCEMENT
         Sec. 220.451.  VENUE OF SUIT TO ENFORCE CHAPTER. Venue of a
  civil suit against a person to enforce this chapter is either in a
  county where the person's principal office is located according to
  its charter or certificate of authority or in Travis County.
         Sec. 220.452.  AUTHORITY TO RESTRAIN OR ENJOIN. To enforce
  this chapter, a court may restrain or enjoin a violation of this
  chapter.
         Sec. 220.453.  APPOINTMENT OF RECEIVER. If a court forfeits
  a person's charter or certificate of authority, the court may
  appoint a receiver for the person and may administer the
  receivership under the laws relating to receiverships.
         Sec. 220.454.  AGENT FOR SERVICE OF PROCESS. Each person on
  which a tax is imposed by this chapter shall designate a resident of
  this state as the person's agent for the service of process.
         Sec. 220.455.  SERVICE OF PROCESS ON SECRETARY OF STATE. (a)
  Legal process may be served on a domestic corporation by serving it
  on the secretary of state if the process relates to the forfeiture
  of the corporation 's charter or to the collection of a tax or
  penalty imposed by this chapter and:
               (1)  if the local agent of the corporation or if the
  officers named in the corporation 's charter or annual report on
  file with the secretary of state do not reside or cannot be located
  in the county in which the corporation 's principal office, as
  stated in the charter, is located; or
               (2)  if the principal office of the corporation is not
  maintained or cannot be located in the county in which the charter
  states that the office is located.
         (b)  Complete and valid service of process is made on a
  corporation through the secretary of state by delivering duplicate
  copies of the process to the secretary of state or the deputy
  secretary of state.
         (c)  On receipt of legal process under this section, the
  secretary of state promptly shall forward to the corporation by
  registered mail a copy of the process. The copy must be mailed to
  the address named in the corporation 's charter as its principal
  place of business or to another place of business of the corporation
  as shown by the records in the secretary of state 's office.
         (d)  The failure of the secretary of state to mail a copy of
  legal process to a corporation does not affect the validity of the
  service of process. It is competent and sufficient proof of the
  service of process that the secretary of state certifies under the
  state seal the receipt of the process.
         (e)  The secretary of state shall keep a record of each legal
  process served on the secretary under this section showing the date
  and time of the receipt of the process and the secretary 's action
  on the process.
         (f)  This section is cumulative of other laws relating to
  service of process.
         Sec. 220.456.  PENALTY FOR FAILURE TO PAY TAX OR FILE REPORT.
         (a)  If a person on which a tax is imposed by this chapter
  fails to pay the tax when it is due and payable or fails to file a
  report required by this chapter when it is due, the person is liable
  for a penalty of five percent of the amount of the tax due.
         (b)  If the tax is not paid or the report is not filed not
  later than the 30th day after the due date, a penalty of an
  additional five percent of the tax due is imposed.
         (c)  The minimum penalty under this section is $1.
         Sec. 220.457.  WILLFUL AND FRAUDULENT ACTS. (a) A person
  commits an offense if the person is subject to this chapter and the
  person willfully:
               (1)  fails to file a report;
               (2)  fails to keep books and records as required by this
  chapter;
               (3)  files a fraudulent report;
               (4)  violates any rule of the comptroller for the
  administration and enforcement of the provisions of this chapter;
  or
               (5)  attempts in any other manner to evade or defeat any
  tax imposed by this chapter or the payment of the tax.
         (d)  A person commits an offense if the person is an
  accountant or an agent for or an officer or employee of a person and
  the person knowingly enters or provides false information on any
  report, return, or other document filed by the person under this
  chapter.
         (e)  A person who commits an offense under this section may
  also, in addition to the punishment provided by this section, be
  liable for a penalty under this chapter.
         (f)  An offense under this section is:
               (1)  a Class C misdemeanor if the amount of the tax
  collected and not paid is less than $50;
               (2)  a Class B misdemeanor if the amount of the tax
  collected and not paid is $50 or more but less than $500;
               (3)  a Class A misdemeanor if the amount of the tax
  collected and not paid is $500 or more but less than $1,500;
               (4)  a state jail felony if the amount of the tax
  collected and not paid is $1,500 or more but less than $20,000;
               (5)  a felony of the third degree if the amount of the
  tax collected and not paid is $20,000 or more but less than
  $100,000;
               (6)  a felony of the second degree if the amount of the
  tax collected and not paid is $100,000 or more but less than
  $200,000; and
               (7)  a felony of the first degree if the amount of the
  tax collected and not paid is $200,000 or more.
         (g)  When tax is collected and not paid in violation of
  Subsection (a) pursuant to one scheme or continuous course of
  conduct, the conduct may be considered as one offense and the
  amounts aggregated in determining the grade of the offense.
         (e)  A person whose commercial domicile or whose residence is
  in this state may be prosecuted under this section only in the
  county in which the person's commercial domicile or residence is
  located unless the person asserts a right to be prosecuted in
  another county.
         (f)  A prosecution for a violation of this section must be
  commenced before the fifth anniversary of the date of the
  violation.
         Sec. 220.458.  VENUE FOR CRIMINAL PROSECUTION. Venue for
  prosecution for an offense under this chapter is in:
               (1)  the county in which any element of the offense
  occurs; or
               (2)  Travis County.
  [Sections 220.458-220.500 reserved for expansion]
  SUBCHAPTER K. DISPOSITION OF REVENUE
         Sec. 220.501.  GENERAL REVENUE FUND. Except as and to the
  extent otherwise expressly provided by the laws of this state, the
  revenue from a tax, interest, or penalty imposed by this chapter
  shall be deposited in the state treasury to the credit of the
  general revenue fund.
  [END OF SECTION 2.01]
         SECTION 2.02.
         (A)  Subject to the provisions of Section 2.02(B) of this
  Article, the amendments effected by this Article shall be
  prospective in application only and without prejudice to any rights
  and obligations of taxpayers, or the amounts owed to and the
  authorities of the comptroller or of this state, accruing or
  arising with respect to periods prior to the Effective Date,
  including but not limited to refunds, adjustments and similar items
  that would otherwise have been payable by or on behalf of the
  comptroller on or after the Effective Date.
         (B)  Notwithstanding the foregoing, but without prejudice to
  any other applicable limitation of actions, expiration or "sunset"
  provision, no judicial or administrative enforcement action shall
  be commenced by any authority of this state or any of its political
  subdivisions under the provisions so repealed on or after the fifth
  anniversary of the Effective Date.
  ARTICLE 3.
  CERTAIN CONFORMING REVISIONS
         SECTION 3.01.  TAX CODE, TITLE 2, STATE TAXATION, is amended
  by revising SUBTITLE A, GENERAL PROVISIONS, CHAPTER 101, GENERAL
  PROVISIONS, Sec. 101.009, ALLOCATION AND TRANSFER OF NET REVENUES,
  to delete subparagraph (b) thereof.
         SECTION 3.02.  TAX CODE, TITLE 2, STATE TAXATION, SUBTITLE
  D, COMPACTS AND UNIFORM LAWS, Chapter 142, SIMPLIFIED SALES AND USE
  ADMINISTRATION ACT, is repealed in its entirety.
  ARTICLE 4. REVISIONS TO CERTAIN LOCAL TAXES
         SECTION 4.01.  Subject to Section 4.03 of this Article 4, and
  effective on and after September 1, 2013 (as used in this Article,
  the "Effective Date"), TAX CODE, TITLE 3. LOCAL TAXATION, SUBTITLE
  C, LOCAL SALES AND USE TAXES, CHAPTERS 321, 322, 323, 324, 325 and
  327 are revised to read as follows, and new CHAPTER 328, SCHOOL
  DISTRICT ENRICHMENT VALUE ADDED TAX is added as set forth below:
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 321.001.  SHORT TITLE. This chapter may be cited as the
  Texas Municipal Sales and Use Value Added Tax Act.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.002. 321.002. DEFINITIONS. (a)  In this chapter:
               (1)     "Additional municipal sales and use tax" means
  only the additional tax authorized by Section 321.101(b).
               (2)     "Municipality" includes any incorporated city,
  town, or village.
               (3)     "Place of business of the retailer" means an
  established outlet, office, or location operated by the retailer or
  the retailer's agent or employee for the purpose of receiving
  orders for taxable items and includes any location at which three or
  more orders are received by the retailer during a calendar year.   A
  warehouse, storage yard, or manufacturing plant is not a "place of
  business of the retailer" unless at last three orders are received
  by the retailer during the calendar year at the warehouse, storage
  yard, or manufacturing plant.   An outlet, office, facility, or any
  location that contracts with a retail or commercial business to
  process for that business invoices, purchase orders, bills of
  lading, or other equivalent records onto which sales tax is added,
  including an office operated for the purpose of buying and selling
  taxable goods to be used or consumed by the retail or commercial
  business, is not a "place of business of the retailer" if the
  comptroller determines that the outlet, office, facility, or
  location functions or exists to avoid the tax imposed by this
  chapter or to rebate a portion of the tax imposed by this chapter to
  the contracting business.   Notwithstanding any other provision of
  this subdivision, a kiosk is not a "place of business of the
  retailer."   In this subdivision, "kiosk" means a small stand-alone
  area or structure that:
                     (A)     is used solely to display merchandise or to
  submit orders for taxable items from a data entry device, or both;
                     (B)     is located entirely within a location that is
  a place of business of another retailer, such as a department store
  or shopping mall; and
                     (C)     at which taxable items are not available for
  immediate delivery to a customer.
         (b)  Words words used in this chapter and defined by Chapter
  151 220 have the meanings assigned by Chapter 151 220.
         Sec. 321.003.
         Sec. 321.003.  OTHER PORTIONS OF TAX APPLICABLE. Subtitles
  A and B, Title 2, and Chapters 142 and 151 Chapter 220 apply to the
  taxes and to the administration and enforcement of the taxes
  imposed by this chapter in the same manner that those laws apply to
  state taxes, unless modified by this chapter.
         Sec.   321.004.     REFERENCES TO SALES OR USE TAX. A reference
  to a sales tax or a use tax imposed or authorized by this chapter is
  a reference to both the taxes imposed under Sections 321.101(a) and
  (b) unless otherwise provided.
  SUBCHAPTER B.  IMPOSITION OF SALES AND USE VALUE ADDED TAXES BY
  MUNICIPALITIES
         Sec. 321.101.  TAX AUTHORIZED. (a) A municipality may adopt
  or repeal a sales and use value added tax authorized by this
  chapter, other than the additional municipal sales and use value
  added tax, at an election in which a majority of the qualified
  voters of the municipality approve the adoption or repeal of the
  tax.
         (b)     A municipality that is not disqualified may, by a
  majority vote of the qualified voters of the municipality voting at
  an election held for that purpose, adopt an additional sales and use
  tax for the benefit of the municipality in accordance with this
  chapter. A municipality is disqualified from adopting the
  additional sales and use tax if the municipality:
               (1)     is included within the boundaries of a rapid
  transit authority created under Chapter 451, Transportation Code;
               (2)     is included within the boundaries of a regional
  transportation authority created under Chapter 452, Transportation
  Code, by a principal municipality having a population of less than
  800,000, unless the municipality has a population of 400,000 or
  more and is located in more than one county;
               (3)     is wholly or partly located in a county that
  contains territory within the boundaries of a regional
  transportation authority created under Chapter 452, Transportation
  Code, by a principal municipality having a population in excess of
  800,000, unless:
                     (A)     the municipality is a contiguous
  municipality; or
                     (B)     the municipality is not included within the
  boundaries of the authority and is located wholly or partly in a
  county in which fewer than 250 persons are residents of both the
  county and the authority according to the most recent federal
  census; or
                     (C)     the municipality is not and on January 1,
  1993, was not included within the boundaries of the authority; or
               (4)     imposes a tax authorized by Chapter 453,
  Transportation Code.
         (c)     For the purposes of Subsection (b), "principal
  municipality " and "contiguous municipality " have the meanings
  assigned by Section 452.001, Transportation Code.
         (d)     In any municipality in which an additional sales and use
  tax has been imposed, in the same manner and by the same procedure
  the municipality by majority vote of the qualified voters of the
  municipality voting at an election held for that purpose may
  reduce, increase, or abolish the additional sales and use tax.
         (e)     An authority created under Chapter 451 or 452,
  Transportation Code, is prohibited from imposing the tax provided
  for by those chapters if within the boundaries of the authority
  there is a municipality that has adopted the additional sales and
  use tax provided for by this section.
         (f)     A municipality may not adopt or increase a sales and use
  tax or an additional sales and use (b) - (e) RESERVED
         (f)  A municipality may not adopt or increase a value added
  tax under this section if as a result of the adoption or increase of
  the tax the combined rate of all sales and use value added taxes
  imposed by the municipality and other political subdivisions of
  this state having territory in the municipality would exceed two 
  three percent at any location in the municipality.
         (g)  For the purposes of Subsection (f), "territory" in a
  municipality having a population of 5,000 or less and bordering on
  the Gulf of Mexico does not include any area covered by water and in
  which no person has a place of business to which a sales tax permit
  issued under Subchapter F of Chapter 151 applies that serves as a
  place of supply of services or property that otherwise would be
  taxable under this chapter.
         (h)  Expired.
         (i)     A municipality for which the adoption or increase of a
  sales and use tax approved by the voters in an election held after
  May 1, 1995, and before December 31, 1995, is invalid because the
  election combined into a single proposition proposal for adopting
  an economic development sales and use tax under Chapter 505, Local
  Government Code, and an additional sales and use tax under
  Subsection (b)     may adopt or increase the sales and use tax
  previously approved by the voters by ordinance or resolution of the
  governing body of the municipality. If the governing body of the
  municipality adopts or increases the sales and use tax under this
  subsection, the municipal secretary shall send to the comptroller
  by certified or registered mail a certified copy of the ordinance or
  resolution. The tax takes effect on the first day of the month
  following the expiration of the calendar quarter occurring after
  the date on which the comptroller receives the ordinance or
  resolution.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 54, Sec. 1, eff. Oct.
  20, 1987; Acts 1989, 71st Leg., ch. 2, Sec. 14.14(a), eff. Aug. 28,
  1989; Acts 1989, 71st Leg., ch. 489, Sec. 1, eff. Aug. 28, 1989;
  Acts 1991, 72nd Leg., ch. 184, Sec. 2, eff. May 24, 1991; Acts 1991,
  72nd Leg., ch. 223, Sec. 1, eff. May 29, 1991; Acts 1993, 73rd Leg.,
  ch. 320, Sec. 1, eff. May 28, 1993; Acts 1993, 73rd Leg., ch. 1031,
  Sec. 25, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 65, Sec. 1,
  eff. May 9, 1997; Acts 1997, 75th Leg., ch. 165, Sec. 30.264, eff.
  Sept. 1, 1997; Acts 1997, 75th Leg., ch. 705, Sec. 1, eff. Sept. 1,
  1997.
  Amended by:
         Acts 2007, 80th Leg., R.S., Ch. , Sec. 3.73, eff. April 1,
  2009.
         Sec. 321.102.
         Sec. 321.102.  EFFECTIVE DATES: NEW TAX, TAX REPEAL,
  BOUNDARY CHANGE. (a) A tax imposed under this chapter or the
  repeal of a tax abolished under this chapter takes effect on the
  first day of the first calendar quarter occurring after the
  expiration of the first complete calendar quarter occurring after
  the date on which the comptroller receives a notice of the action as
  required by Section 321.405(b). This subsection does not apply to
  the additional municipal sales and use value added tax.
         (b)  The additional municipal sales and use value added tax
  takes effect or is increased, reduced, or repealed in the
  municipality on the October 1st after the expiration of the first
  complete calendar quarter after the date on which the comptroller
  receives notice from the municipality of the adoption, increase,
  reduction, or repeal of the additional municipal sales and use 
  value added tax.
         (c)  If a municipality in which the tax imposed under this
  chapter is in effect changes its boundaries, the municipal
  secretary shall send by United States registered or certified mail
  to the comptroller a certified copy of the ordinance that adds or
  detaches municipal territory and that shows the effective date of
  the boundary change. The ordinance must be accompanied by a map
  clearly showing the added or detached territory. Except as
  provided by Subsection (d), the tax takes effect in the added
  territory or is inapplicable to the detached territory on the first
  day of the first calendar quarter after the comptroller receives
  the ordinance and map.
         (d)  If, within 10 days after the receipt of an ordinance and
  map sent under Subsection (c), the comptroller notifies the
  secretary of the municipality that more time is required, the
  effective date of the application of the tax in the added or
  detached area is the first day of the first calendar quarter after
  the expiration of the first complete calendar quarter occurring
  after the date on which the comptroller receives the ordinance and
  map.
         (e)  If as a result of the imposition or increase in a sales
  and use value added tax by a municipality in which there is located
  all or part of a local governmental entity (other than a county or
  school district) that has adopted a sales and use value added tax or
  as a result of the annexation by a municipality of all or part of the
  territory in a local governmental entity (other than a county or
  school district) that has adopted a sales and use value added tax
  the overlapping local sales and use value added taxes in the area
  will exceed two three percent, the entity's sales and use value
  added tax is automatically reduced in that area to a rate that when
  added to the combined rate of local sales and use value added taxes
  will equal two three percent.
         (f)  If an entity's rate is reduced in accordance with
  Subsection (e), the comptroller shall withhold from the
  municipality's monthly sales and use quarterly value added tax
  allocation an amount equal to the amount that would have been
  collected by the entity had the municipality not imposed or
  increased its sales and use value added tax or annexed the area in
  the entity less amounts that the entity collects following the
  municipality's levy of or increase in its sales and use value added
  tax or annexation of the area in the entity. The comptroller shall
  withhold and pay the amount withheld to the entity under policies or
  procedures that the comptroller considers reasonable.
         (g)  Subsections (e) and (f) do not apply if and during any
  period in which a local governmental entity has outstanding
  indebtedness or obligations that are payable wholly or partly from
  the sales and use value added tax revenue of the entity. A
  municipality may not implement the imposition or increase of the
  sales and use value added tax as a result of the circumstances
  described by Subsection (e) if, as a result of the implementation of
  that imposition or increase, the combined rate of all sales and use 
  value added taxes imposed by the municipality, the local
  governmental entity, and any other political subdivisions having
  territory in the district would exceed two three percent at any
  location in the municipality.
         (h)  A transit authority is not a local governmental entity
  for the purposes of Subsections (e) and (f).
         (i)     Subsection (g) does not apply to a local governmental
  entity or political subdivision created under Chapter 326, Local
  Government Code.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1989, 71st Leg., ch. 256, Sec. 1, eff. Sept. 1,
  1989; Acts 1991, 72nd Leg., ch. 184, Sec. 3, eff. May 24, 1991;
  Acts 1999, 76th Leg., ch. 1467, Sec. 2.67, eff. June 19, 1999; Acts
  2001, 77th Leg., ch. 1263, Sec. 74, eff. Sept. 1, 2001.
         Sec. 321.1025.
         Sec. 321.1025.  ANNEXATION TO CERTAIN REGIONAL
  TRANSPORTATION AUTHORITIES. (a) A municipality that is wholly or
  partly located in a county that contains territory within the
  boundaries of a regional transportation authority created under
  Chapter 452, Transportation Code, by a principal municipality
  having a population of more than 800,000 and that has adopted an
  additional sales and use municipal value added tax for the benefit
  of the municipality may hold an election on the question of whether
  the municipality shall be annexed to the authority.
         (b)  The election must be held in the manner required by
  Chapter 452, Transportation Code.
         (c)  If the annexation is approved by the voters, the
  election is to be treated for all purposes as an election to abolish
  the additional sales and use municipal value added tax in the
  municipality and the tax is repealed in the manner provided by this
  chapter.
  Added by Acts 1991, 72nd Leg., ch. 223, Sec. 2, eff. May 29, 1991.
  Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.265, eff. Sept. 1,
  1997.
         Sec. 321.103.  SALES 321.103. VALUE ADDED TAX. (a) In a
  municipality that has adopted the tax authorized by Section
  321.101(a), there is imposed a value added tax on the receipts from
  the sale at retail of taxable items within the supply in that
  municipality at the rate of any service or property by any person in
  the ordinary course of one percent and at the same rate on the
  receipts from the sale at retail within the municipality of gas and
  electricity a trade or business in which the person engages for
  residential use. the purpose of profit.
         (b)  In a municipality that has adopted the additional
  municipal sales and use value added tax, the tax is imposed at the
  rate approved by the voters. The rate, when the tax is adopted,
  must be equal to either any increment of one-eighth, one-fourth,
  three-eighths, or one-half of one percentage point from zero to one
  percent. The rate may be reduced in one or more increments of
  one-eighth of one percent to a minimum of one-eighth of one percent
  or increased in one or more increments of one-eighth of one percent
  to a maximum of one-half of one percent, or the tax may be
  abolished. The rate that the municipality adopts is on the receipts
  from the sale at retail of all taxable items within the municipality
  and at the same rate on the receipts from the sale at retail within
  the municipality of gas and electricity for residential use unless
  the residential use of gas and electricity is exempted from the tax
  imposed under Section 321.101(a), in which case the residential use
  of gas and electricity is exempted under this subsection also
  percent, or the tax may be abolished. This rate is then applied to
  the taxpayer's taxable receipts attributable to any applicable tax
  period to determine the applicable municipal value added tax.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1991, 72nd Leg., ch. 184, Sec. 4, eff. May 24, 1991.
         Sec.   321.104.     USE TAX. (a) In a municipality that has
  adopted the tax authorized by this chapter, there is imposed an
  excise tax on the use, storage, or other consumption within the
  municipality of taxable items purchased, leased, or rented from a
  retailer during the period that the tax is effective within the
  municipality. The rate of the excise tax is the same as the rate of
  the sales tax portion of the tax and is applied to the sales price of
  the taxable items.
         (b)     In a municipality that has adopted the tax authorized by
  this chapter, there is imposed an excise tax on the use, storage, or
  other consumption of gas or electricity for residential purposes
  and purchased from any retailer during the period that the tax is
  effective within the municipality. The tax is imposed at the same
  rate as the tax provided by Subsection (a).
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 25, eff. Sept. 1,
  1991.
         Sec.   321.1045.     IMPOSITION OF SALES AND USE TAX IN CERTAIN
  FEDERAL MILITARY INSTALLATIONS. (a)     This section applies only to
  a municipality with a population of more than 500,000 that borders
  the United Mexican States.
         (b)     For purposes of the sales and use tax imposed under this
  chapter, a reference in this chapter or other law to the
  municipality as the territory in which the tax or an incident of the
  tax applies includes the area within the boundaries of a federal
  military installation that is located in the municipality's
  extraterritorial jurisdiction.
         (c)  This section does not affect:
               (1)     the boundaries of an emergency services district
  that contains territory within the boundaries of a federal military
  installation on the effective date of this section;
               (2)     the authority of that emergency services district
  to continue to impose a sales and use tax in the entire territory of
  the district; or
               (3)     the duty of that emergency services district to
  provide services in the entire territory of the district.
  Added by Acts 2011, 82nd Leg., R.S., Ch. , Sec. 1, eff. July 1, 2011.
         Sec.   321.105.     RESIDENTIAL USE OF GAS AND ELECTRICITY. (a)
  There are exempted from the taxes imposed by a municipality under
  this chapter the sale, production, distribution, lease, or rental
  of, and the use, storage, or other consumption within the
  municipality of gas and electricity for residential use in any
  municipality that:
               (1)  adopted the tax on or after October 1, 1979; or
               (2)  adopted the tax before that time but:
                     (A)     failed to exempt the residential use of gas
  and electricity before May 1, 1979; and
                     (B)     has not reimposed the tax as provided by
  Subsection (c).
         (b)     A governing body of a municipality that adopted the
  taxes under this chapter before October 1, 1979, may, by ordinance
  adopted by a vote of a majority of the membership of the governing
  body and recorded in the municipal minutes, exempt from the taxes
  authorized by this chapter the receipts from the sale, production,
  distribution, lease, or rental of, and the use, storage, or other
  consumption of gas and electricity for residential use.
         (c)     A governing body of a municipality that has adopted the
  taxes authorized by this chapter before May 1, 1979, and in which
  residential use of gas and electricity is exempted within the
  municipality, may reimpose the taxes on gas and electricity for
  residential use by ordinance adopted by a vote of the majority of
  the membership of the governing body and entered in the municipal
  minutes.
         (d)     The municipal secretary shall send to the comptroller by
  United States certified or registered mail a copy of an ordinance
  exempting or imposing the taxes on residential use of gas and
  electricity.
         (e)     The exemption or reimposition of taxes on residential
  use of gas and electricity takes effect within the municipality as
  provided by Section 321.104(a) after receipt of a copy of the
  ordinance.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec.   321.1055.     IMPOSITION OF FIRE CONTROL OR CRIME CONTROL
  DISTRICT TAX ON THE RESIDENTIAL USE OF GAS AND ELECTRICITY. (a)
  This section applies to a fire control, prevention, and emergency
  medical services district or crime control and prevention district
  located in all or part of a municipality that imposes a tax on the
  residential use of gas and electricity under Section 321.105.
         (b)     The board of directors of a district to which this
  section applies may, by order or resolution adopted in a public
  hearing by a vote of a majority of the membership of the board and
  recorded in the district's minutes:
               (1)     impose a tax adopted under Section 321.106 or
  321.108, as applicable, on receipts from the sale, production,
  distribution, lease, or rental of, and the use, storage, or other
  consumption within the district of, gas and electricity for
  residential use;
               (2)     exempt from taxation the items described by
  Subdivision (1); or
               (3)  reimpose the tax under Subdivision (1).
         (c)     A district that adopts an order or resolution under
  Subsection (b) shall:
               (1)     send a copy of the order or resolution to the
  comptroller by United States certified or registered mail;
               (2)     send a copy of the order or resolution and a copy
  of the district's boundaries to each gas and electric company whose
  customers are subject to the tax by United States certified or
  registered mail; and
               (3)     publish notice of the order or resolution in a
  newspaper of general circulation in the district.
         (d)     If the residential use of gas and electricity ceases to
  be taxable in the municipality in which a district is located, then
  the residential use of gas and electricity is not taxable by the
  district.
         (e)     The provisions of Sections 321.201 and 321.204 that
  govern the computation of municipal taxes on gas and electricity
  for residential use apply to the computation of district taxes on
  gas and electricity for residential use under this section.
  Added by Acts 2009, 81st Leg., R.S., Ch. , Sec. 2, eff. January 1,
  2010.
         Sec. 321.106.  FIRE CONTROL DISTRICT TAX.  (c) The
  exemptions and exclusions of Chapter 220, Subchapters D and E apply
  equally to the determination of taxable receipts for purposes of
  any municipal value added tax.
         Sec. 321.106.  FIRE CONTROL DISTRICT TAX. (a) Subject to an
  election held in accordance with Chapter 344, Local Government
  Code, a municipality in which a fire control, prevention, and
  emergency medical services district is established shall adopt a
  sales and use value added tax in the area of the district for the
  purpose of financing the operation of the fire control, prevention,
  and emergency medical services district. The revenue from the tax
  may be used only for the purpose of financing the operation of the
  fire control, prevention, and emergency medical services district.
  The proposition for adopting a tax under this section and the
  proposition for creation of a fire control, prevention, and
  emergency medical services district shall be submitted at the same
  election. For purposes of Section 321.101, a tax under this section
  is not an additional sales and use tax.
         (b)  A tax adopted for a district under this section for
  financing the operation of the district may be decreased in
  increments of one-eighth of one percent by order of the board of
  directors of the district.
         (c)  The rate of a tax adopted for a district under this
  section may be increased in increments of one-eighth of one
  percent, not to exceed a total tax rate of one-half quarter percent,
  for financing the operation of the fire control, prevention, and
  emergency medical services district by order of the board of
  directors of the fire control, prevention, and emergency medical
  services district if approved by a majority of the qualified voters
  voting at an election called by the board and held in the district
  on the question of increasing the tax rate. At the election, the
  ballot shall be printed to provide for voting for or against the
  proposition: "The increase of the __________ (name of the
  municipality that created the district) Fire Control, Prevention,
  and Emergency Medical Services District sales and use value added
  tax rate to ______ percent." If there is an increase or decrease
  under this section in the rate of a tax imposed under this section,
  the new rate takes effect on the first day of the next calendar
  quarter after the expiration of one calendar quarter after the
  comptroller receives notice of the increase or decrease. However,
  if the comptroller notifies the president of the board of directors
  of the district in writing within 10 days after receipt of the
  notification that the comptroller requires more time to implement
  reporting and collection procedures, the comptroller may delay
  implementation of the rate change for one calendar quarter, and the
  new rate takes effect on the first day of the calendar quarter that
  follows the elapsed quarter.
         (d)  The comptroller shall remit to the municipality amounts
  collected at the rate imposed under this section as part of the
  regular allocation of other municipal tax revenue collected by the
  comptroller. The municipality shall remit that amount to the
  district. A retailer taxpayer may not be required to use allocation
  and reporting procedures in the collection of taxes under this
  section that are different from the procedures that retailers 
  taxpayers use in the collection of other sales and use value added
  taxes under this chapter. An item, transaction, or  A service that 
  or property the supply of which is taxable in a municipality under a
  sales or use value added tax authorized by another section of this
  chapter is taxable under this section. An item, transaction, or A
  service that or property the supply of which is not taxable in a
  municipality under a sales or use value added tax authorized by
  another section of this chapter is not taxable under this section.
         (e)  If, in a municipality where a fire control, prevention,
  and emergency medical services district is composed of the whole
  municipality, a municipal sales and use value added tax or a
  municipal sales and use value added tax rate increase for the
  purpose of financing a fire control, prevention, and emergency
  medical services district is approved, the municipality is
  responsible for distributing to the district that portion of the
  municipal sales and use value added tax revenue received from the
  comptroller that is to be used for the purposes of financing the
  fire control, prevention, and emergency medical services district.
  Not later than the 10th day after the date the municipality receives
  money under this section from the comptroller, the municipality
  shall make the distribution in the proportion that the fire
  control, prevention, and emergency medical services portion of the
  tax rate bears to the total sales and use value added tax rate of the
  municipality. The amounts distributed to a fire control,
  prevention, and emergency medical services district are not
  considered to be sales and use value added tax revenue for the
  purpose of property tax reduction and computation of the municipal
  tax rate under Section 26.041.
         (f)  For purposes of the tax imposed under this section, a
  reference in this chapter to the municipality as the territory in
  which the tax or an incident of the tax applies means only the
  territory located in the fire control, prevention, and emergency
  medical services district, if that district is composed of an area
  less than an entire municipality.
         (g)  The comptroller may adopt rules and the municipality's
  governing body may adopt orders to administer this section.
  Added by Acts 2001, 77th Leg., ch. 1295, Sec. 2, eff. June 1, 2001.
         Sec. 321.107. 321.107. ADMINISTRATION OF LOCAL SALES AND
  USE VALUE ADDED TAXES IMPOSED BY OTHER GOVERNMENTAL ENTITIES. The
  imposition, computation, administration, enforcement, and
  collection of any local sales and use value added tax imposed by any
  other local governmental entity is governed by this chapter, except
  as otherwise provided by law. In this section, "other local
  governmental entity" includes any governmental entity created by
  the legislature that has a limited purpose or function, that has a
  defined or restricted geographic territory, and that is authorized
  by law to impose a local sales and use value added tax. The term
  does not include a county, county health services district, county
  landfill and criminal detention center district, metropolitan
  transportation authority, coordinated county transportation
  authority, economic development district, crime control district,
  hospital district, emergency services district, or library
  district.
  Added by Acts 2003, 78th Leg., ch. 209, Sec. 54, eff. Oct. 1, 2003.
  Amended by:
         Acts 2007, 80th Leg., R.S., Ch. , Sec. 21, eff. September 1,
  2007.
         Sec. 321.108.
         Sec. 321.108.  MUNICIPAL CRIME CONTROL AND PREVENTION
  DISTRICT TAX. (a) Subject to an election held in accordance with
  Chapter 363, Local Government Code, a municipality in which a crime
  control and prevention district is established shall adopt a sales
  and use value added tax in the area of the district for the purpose
  of financing the operation of the crime control and prevention
  district. The revenue from the tax may be used only for the purpose
  of financing the operation of the crime control and prevention
  district. The proposition for adopting a tax under this section and
  the proposition for creation of a crime control and prevention
  district shall be submitted at the same election.
         (b)  A tax adopted for a district under this section for
  financing the operation of the district may be decreased in
  increments of one-eighth of one percent by order of the board of
  directors of the district.
         (c)  The governing body of the municipality that proposed the
  creation of the crime control and prevention district may call an
  election in the district on the question of decreasing the tax rate
  in increments of one-eighth of one percent in the district. At the
  election, the ballot shall be printed to provide for voting for or
  against the following proposition: "The decrease of the
  ____________________ Crime Control and Prevention District sales
  and use value added tax rate to ____________ percent."
         (d)  The rate of a tax adopted for a district under this
  section may be increased in increments of one-eighth of one
  percent, not to exceed a total tax rate of one-quarter half percent
  for financing the operation of the crime control and prevention
  district, by order of the board of directors of the crime control
  and prevention district if approved by a majority of the voters
  voting at an election called by the board and held in the district
  on the question of increasing the tax rate. At the election, the
  ballot shall be printed to provide for voting for or against the
  following proposition: "The increase of the ______________ Crime
  Control and Prevention District sales and use value added tax rate
  to ____________ percent." If there is an increase or decrease under
  this subsection in the rate of a tax imposed under this section, the
  new rate takes effect on the first day of the next calendar quarter
  after the expiration of one calendar quarter after the comptroller
  receives notice of the increase or decrease. However, if the
  comptroller notifies the president of the board of directors of the
  district in writing within 10 days after receipt of the
  notification that the comptroller requires more time to implement
  reporting and collection procedures, the comptroller may delay
  implementation of the rate change for another calendar quarter, and
  the new rate takes effect on the first day of the next calendar
  quarter following the elapsed quarter.
         (e)  The comptroller shall remit to the municipality amounts
  collected at the rate imposed under this section as part of the
  regular allocation of municipal tax revenue collected by the
  comptroller if the district is composed of the entire municipality.
  The comptroller shall, if the district is composed of an area less
  than the entire municipality, remit that amount to the district.  
  Retailers Taxpayers may not be required to use allocation and
  reporting procedures in the collection of taxes under this section
  that are different from the procedures that retailers taxpayers use
  in the collection of other sales and use value added taxes under
  this chapter.  An item, transaction, A supply of services or
  service property that is taxable in a municipality under a sales or
  use value added tax authorized by another section of this chapter is
  taxable under this section.  An item, transaction, or service A
  supply of services or property that is not taxable in a municipality
  under a sales or use value added tax authorized by another section
  of this chapter is not taxable under this section.
         (f)  If, in a municipality in which a crime control and
  prevention district is composed of the whole municipality, a
  municipal sales and use value added tax or a municipal sales and use
  value added tax rate increase for the purpose of financing a crime
  control and prevention district is approved, the municipality is
  responsible for distributing to the district that portion of the
  municipal sales and use value added tax revenue received from the
  comptroller that is to be used for the purposes of financing the
  crime control and prevention district. Not later than the 10th day
  after the date the municipality receives money under this section
  from the comptroller, the municipality shall make the distribution
  in the proportion that the crime control and prevention portion of
  the tax rate bears to the total sales and use value added tax rate of
  the municipality. The amounts distributed to a crime control and
  prevention district are not considered to be additional municipal
  sales and use value added tax revenue for the purpose of property
  tax reduction and computation of the municipal tax rate under
  Section 26.041.
         (g)  For purposes of the tax imposed under this section, a
  reference in this chapter to the municipality as the territory in
  which the tax or an incident of the tax applies means only the
  territory located in the crime control and prevention district, if
  that district is composed of an area less than an entire
  municipality.
         (h)  The comptroller may adopt rules and the governing body
  of the municipality may adopt orders to administer this section.
  Added by Acts 2007, 80th Leg., R.S., Ch. , Sec. 5, eff. June 15,
  2007.
  SUBCHAPTER C. COMPUTATION OF TAXES
         Sec. 321.201.  COMPUTATION OF SALES VALUE ADDED TAXES. (a)
  Each retailer taxpayer in a municipality that has adopted a tax
  authorized by this chapter shall add each sales value added tax
  imposed by the municipality under this chapter and by Chapter 151 
  220 to the sales supply price, and the sum of the taxes is a part of
  the price, a debt of the purchaser customer to the retailer taxpayer
  until paid, and recoverable at law in the same manner as the
  purchase supply price. If the municipality imposes the tax on gas
  and electricity for residential use, only the municipal tax is
  added to the sales price of sales of gas and electricity for
  residential use.
         (b)  The amount of the total tax is computed by multiplying
  the combined applicable tax rates, or the rate of the municipal tax
  only for sales of gas and electricity for residential use in a
  municipality that imposes the tax on gas and electricity for
  residential use, by the amount of the sales supply price. If the
  product results in a fraction of a cent less than one-half of one
  cent, the fraction of a cent is not collected. If the fraction of a
  cent is one-half of one cent or more, the fraction shall be
  collected as one cent.
         (c)  The comptroller may publish schedules and brackets of
  amounts of taxes based on the formula provided by Subsection (b) for
  use in municipalities that have adopted the taxes authorized by
  this chapter.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec.   321.202.     METHOD OF REPORTING: RETAILERS HAVING SALES
  BELOW TAXABLE AMOUNT. The exclusion provided by Section 151.411
  applies to a retailer under this chapter 50 percent of whose
  receipts from the sales of taxable items comes from individual
  transactions in which the sales price is an amount on which no tax
  is produced from the combined state and local taxes.
  Added by Acts 1987, 70th Leg., ch. 191,
         Sec. 321.202.  REPEALED
         Sec. 321.203.  REPEALED
  Sec. 1, eff. Sept. 1, 1987.
  For expiration of Subsections (c-2) and (c-3), see Subsection
  (c-3).
         Sec.   321.203.     CONSUMMATION OF SALE. (a) A sale of a
  taxable item occurs within the municipality in which the sale is
  consummated. A sale is consummated as provided by this section
  regardless of the place where transfer of title or possession
  occurs.
         (b)     If a retailer has only one place of business in this
  state, all of the retailer's retail sales of taxable items are
  consummated at that place of business except as provided by
  Subsection (e).
         (c)     If a retailer has more than one place of business in this
  state, each sale of each taxable item by the retailer is consummated
  at the place of business of the retailer in this state where the
  retailer first receives the order, provided that the order is
  placed in person by the purchaser or lessee of the taxable item at
  the place of business of the retailer in this state where the
  retailer first receives the order.
         (c-1)     If the retailer has more than one place of business in
  this state and Subsection (c) does not apply, the sale is
  consummated at the place of business of the retailer in this state:
               (1)     from which the retailer ships or delivers the
  item, if the retailer ships or delivers the item to a point
  designated by the purchaser or lessee; or
               (2)     where the purchaser or lessee takes possession of
  and removes the item, if the purchaser or lessee takes possession of
  and removes the item from a place of business of the retailer.
         (c-2)  Subsection (c) does not apply if:
               (1)     the taxable item is shipped or delivered from a
  warehouse:
                     (A)  that is a place of business of the retailer;
                     (B)     in relation to which the retailer has an
  economic development agreement with:
                           (i)     the municipality in which the warehouse
  is located that was entered into under Chapter 380, 504, or 505,
  Local Government Code, or a predecessor statute, before January 1,
  2009; or
                           (ii)     the county in which the warehouse is
  located that was entered into under Chapter 381, Local Government
  Code, before January 1, 2009; and
                     (C)     in relation to which the municipality
  provides information relating to the economic development
  agreement as required by Subsection (c-3) by the deadline
  prescribed by that subsection, or, if appropriate, the county
  complies with Section 323.203(c-3) by the deadline prescribed by
  that section; and
               (2)     the place of business of the retailer at which the
  retailer first receives the order in the manner described by
  Subsection (c) is a retail outlet identified in the information
  required by Subsection (c-3) or Section 323.203(c-3) as being
  served by the warehouse on January 1, 2009.
         (c-3)     Not later than September 1, 2009, a municipality that
  has entered into an economic development agreement described by
  Subsection (c-2) shall send to the comptroller information
  prescribed by the comptroller relating to the agreement that
  identifies each warehouse subject to the agreement and each retail
  outlet that, on January 1, 2009, was served by that warehouse.   The
  comptroller shall prescribe the manner in which the information
  must be provided.   The provision of information to the comptroller
  under this subsection does not affect whether information described
  by this subsection is confidential or excepted from required public
  disclosure.   This subsection and Subsection (c-2) expire September
  1, 2014.
         (d)     If the retailer has more than one place of business in
  this state and Subsections (c) and (c-1) do not apply, the sale is
  consummated at:
               (1)     the place of business of the retailer in this state
  where the order is received; or
               (2)     if the order is not received at a place of business
  of the retailer, the place of business from which the retailer's
  agent or employee who took the order operates.
         (e)     A sale of a taxable item is consummated at the location
  in this state to which the item is shipped or delivered or at which
  possession is taken by the customer if transfer of possession of the
  item occurs at, or shipment or delivery of the item originates from,
  a location in this state other than a place of business of the
  retailer and if:
               (1)     the retailer is an itinerant vendor who has no
  place of business in this state;
               (2)     the retailer's place of business where the
  purchase order is initially received or from which the retailer's
  agent or employee who took the order operates is outside this state;
  or
               (3)     the purchaser places the order directly with the
  retailer's supplier and the item is shipped or delivered directly
  to the purchaser by the supplier.
         (f)     The sale of natural gas and electricity is consummated
  at the point of delivery to the consumer.
         (g)     The sale of mobile telecommunications services is
  consummated in accordance with Section 151.061.
         (g-1)     The sale of telecommunications services sold based on
  a price that is measured by individual calls is consummated at the
  location where the call originates and terminates or the location
  where the call either originates or terminates and at which the
  service address is also located.
         (g-2)     Except as provided by Subsection (g-3), the sale of
  telecommunications services sold on a basis other than on a
  call-by-call basis is consummated at the location of the customer's
  place of primary use.
         (g-3)     A sale of post-paid calling services is consummated at
  the location of the origination point of the telecommunications
  signal as first identified by the seller's telecommunications
  system or by information received by the seller from the seller's
  service provider if the system used to transport the signal is not
  that of the seller.
         (h)     The sale of an amusement service is consummated in the
  municipality in which the performance or other delivery of the
  service takes place.
         (i)     If a purchaser who has given a resale certificate makes
  any use of a taxable item that subjects the taxable item to the
  sales tax under the provisions of Section 151.154, the use or other
  consumption of the taxable item that subjected the taxable item to
  the tax is consummated at the place where the taxable item is stored
  or kept at the time of or just before the use or consumption.
         (j)     The sale of services delivered through a cable system is
  consummated at the point of delivery to the consumer.
         (k)     The sale of garbage or other solid waste collection or
  removal service is consummated at the location at which the garbage
  or other solid waste is located when its collection or removal
  begins.
         (l)     Except as otherwise provided by this section, the sale
  of a taxable service, other than a service described by Section
  151.330(f), is consummated at the location at which the service is
  performed or otherwise delivered.
         (l)     Repealed by Acts 2007, 80th Leg., R.S., Ch. 1266, Sec.
  15(4), eff. September 1, 2007.
         (m)     If there is no place of business of the retailer because
  the comptroller determines that an outlet, office, facility, or
  location contracts with a retail or commercial business to process
  for that business invoices or bills of lading and that the outlet,
  office, facility, or location functions or exists to avoid the tax
  imposed by this chapter or to rebate a portion of the tax imposed by
  this chapter to the contracting business, a sale is consummated at
  the place of business of the retailer from whom the outlet, office,
  facility, or location purchased the taxable item for resale to the
  contracting business.
         (n)     A sale of a service described by Section 151.0047 to
  remodel, repair, or restore nonresidential real property is
  consummated at the location of the job site.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.22(a), eff. Aug. 28,
  1989; Acts 1989, 71st Leg., ch. 810, Sec. 1, eff. Oct. 1, 1989;
  Acts 1991, 72nd Leg., ch. 705, Sec. 26, eff. Sept. 1, 1991; Acts
  2001, 77th Leg., ch. 370, Sec. 2, eff. Aug. 1, 2002; Acts 2003, 78th
  Leg., ch. 209, Sec. 55, eff. Oct. 1, 2003; Acts 2003, 78th Leg., ch.
  1155, Sec. 2, 3, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1310,
  Sec. 115, eff. July 1, 2004.
  Amended by:
         Acts 2005, 79th Leg., Ch. , Sec. 23.001(83), eff. September
  1, 2005.
         Acts 2007, 80th Leg., R.S., Ch. , Sec. 11, eff. September 1,
  2007.
         Acts 2007, 80th Leg., R.S., Ch. , Sec. 15(4), eff. September
  1, 2007.
         Acts 2009, 81st Leg., R.S., Ch. , Sec. 5, eff. June 19, 2009.
         Sec. 321.204.  321.204. COMPUTATION OF USE TAX. (a) In
  each municipality that has adopted the taxes authorized by this
  chapter, the taxes imposed by Section 321.104(a) and the tax
  imposed by Subchapter D, Chapter 151 220, are added together to form
  a single combined tax rate, except:.
               (1)     in a municipality that imposes the tax on gas and
  electricity for residential use only the rate of the municipal tax
  is used to determine the amount of tax on the use, storage, or other
  consumption of gas and electricity for residential use; and
               (2)     only the rate of the municipal tax is used in a
  situation described by Section 321.205(b).
         (b)     The formula prescribed by Section 321.201(b) applies to
  the computation of the amount of use taxes under this chapter.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec.   321.205.     USE TAX: MUNICIPALITY IN WHICH USE OCCURS.
  (a) In determining the incidence of the use tax authorized by this
  chapter the name of the municipality adopting the tax is
  substituted in Subchapter D, Chapter 151, for "this state" where
  those words are used to designate the taxing entity or delimit the
  tax imposed. However, the excise tax authorized by this chapter on
  the use, storage, or consumption of a taxable item does not apply if
  the item is first used, stored, or consumed in a municipality or
  area that has not adopted the taxes authorized by this chapter.
         (b)     If a sale of a taxable item is consummated in this state
  but not within a municipality that has adopted the taxes authorized
  by this chapter and the item is shipped directly, or brought by the
  purchaser or lessee directly, into a municipality that has adopted
  the taxes authorized by this chapter, the item is subject to the
  municipality's use tax. The use is considered to be consummated at
  the location where the item is first stored, used, or consumed after
  the intrastate transit has ceased.
         (c)     If a taxable item is shipped from outside this state to a
  customer within this state and the use of the item is consummated
  within a municipality that has adopted the tax authorized by this
  chapter, the item is subject to the municipality's use tax and not
  its sales tax. A use is considered to be consummated at the first
  point in this state where the item is stored, used, or consumed
  after the interstate transit has ceased. A taxable item delivered
  to a point in this state is presumed to be for storage, use, or
  consumption at that point until the contrary is established.
         (d)     The holder of a direct payment permit issued under
  Chapter 151 who becomes liable for the use tax under this chapter by
  reason of the storage, use, or consumption of a taxable item
  purchased in this state under a direct payment exemption
  certificate shall allocate the tax to the municipality in which the
  item was first removed from the permit holder's storage, or if not
  stored, the place at which the item was first used or consumed by
  the permit holder after transportation. In this subsection an item
  is not considered to have been stored, used, or consumed because of
  a temporary delay or interruption necessary and incidental to its
  transportation or further fabrication, processing, or assembling
  within this state for delivery to the permit holder. A charge for
  fabrication, processing, or further assembly in a municipality that
  has adopted the tax under this chapter shall be subject to the
  municipal use tax.
         (e)     With respect to a taxable service, "use" means the
  derivation in the municipality of direct or indirect benefit from
  the service.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 27, eff. Sept. 1,
  1991.
         Sec. 321.206.
         Sec. 321.205.  REPEALED
         Sec. 321.206.  INCIDENCE OF ADDITIONAL MUNICIPAL SALES AND
  USE VALUE ADDED TAX. For the purpose of determining the proper
  sales value added tax under this chapter and the proper excise tax
  on the use, storage, or other consumption of taxable items under
  Section 321.101(b):
               (1)  , if a taxable item service or property is used,
  stored, or otherwise consumed supplied in a municipality that has
  adopted the additional municipal sales and use value added tax, the
  statutes listed in Section 322.108(a) apply; and
               (2)     if the sales tax applies in a municipality that has
  not adopted the municipal sales and use tax, the excise tax on the
  use, storage, or other consumption of the taxable item does not
  apply.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.15(a), eff. Aug. 28,
  1989.
         Sec. 321.207.
         Sec. 321.207.  LOCAL TAX INAPPLICABLE WHEN NO STATE TAX;
  EXCEPTIONS. (a) The sales value added tax authorized by this
  chapter does not apply to the sale supply of a taxable item services
  or property unless the sales value added tax imposed by Subchapter
  C, Chapter 151 220, also applies to the sale.
         (b)     The excise tax authorized by this chapter on the use,
  storage, or consumption of a taxable item does not apply to the use,
  storage, or consumption of a taxable item unless the tax imposed by
  Subchapter D, Chapter 151, also applies to the use, storage, or
  consumption.
         (c)     Subsections (a) and (b) do not apply to the taxes
  authorized by this chapter on the sale, production, distribution,
  lease, or rental of, and the use, storage, or consumption of gas and
  electricity for residential use.
         (d)     Subsection (b) does not apply to the application of the
  tax in a situation described by Section 321.205(b).
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 28, eff. Sept. 1,
  1991.
         Sec. 321.208.
         Sec. 321.208.  STATE EXEMPTIONS APPLICABLE. The exemptions
  and exclusions provided by Subchapter H, Subchapters D and E of
  Chapter 151, 220 apply to the taxes authorized by this chapter,
  except as provided by Section 151.317(b)..
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.209.
         Sec. 321.209.  TRANSITION EXEMPTION: GENERAL PURPOSE SALES
  AND USE VALUE ADDED TAX. (a) For a period of three years only after
  the effective date of the tax authorized by Section 321.101(a) in a
  municipality, the otherwise taxable receipts from the sale supply
  of, and the use, storage, and consumption of, taxable items
  services or property are exempt from the tax imposed by the
  municipality under Section 321.101(a) if the notice required by
  Subsection (b) is given and if:
               (1)  the items services and/or property are used for 
  suppliedfor the performance of a written contract entered into
  before the effective date of the tax imposed under Section
  321.101(a) in the municipality if the contract may be affected and
  the contract may not be modified because of the tax; or
               (2)  the items services and/or property are used
  supplied under the obligation of a bid submitted before the
  effective date of the tax imposed under Section 321.101(a) in the
  municipality if the contract may be affected and the bid may not be
  withdrawn or modified because of the tax.
         (b)  The taxpayer must give the comptroller notice of the
  contract or bid on which an exemption is to be claimed within 60
  days after the effective date of the tax imposed under Section
  321.101(a) in the municipality.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.14(d), eff. Aug. 28,
  1989.
         Sec. 321.2091. 321.2091. TRANSITION EXEMPTION: ADDITIONAL
  MUNICIPAL SALES AND USE VALUE ADDED TAX. (a) The otherwise taxable
  receipts from the sale, use, or rental supply of services and the
  storage, use, or consumption of taxable items in this state/or
  property are exempt from the adoption or increase of the additional
  municipal sales and use value added tax if the items services and/or
  property are used supplied:
               (1)  for the performance of a written contract entered
  into before the date the adoption or increase of the additional tax
  takes effect in the municipality, if the contract is not subject to
  change or modification by reason of the tax; or
               (2)  pursuant to an obligation of a bid or bids
  submitted prior to the date the adoption or increase of the
  additional tax takes effect in the municipality, if the bid or bids
  may not be withdrawn, modified, or changed by reason of the tax.
         (b)  The exemptions provided by this section have no effect
  after three years from the date the adoption or increase of the
  additional tax takes effect in the municipality.
  Added by Acts 1989, 71st Leg., ch. 2, Sec. 14.14(c), eff. Aug. 28,
  1989. Amended by Acts 1991, 72nd Leg., ch. 184, Sec. 5, eff. May 24,
  1991.
         Sec.   321.210.     TELECOMMUNICATIONS EXEMPTION. (a) There are
  exempted from the taxes imposed under this chapter the sales within
  the municipality of telecommunications services unless the
  application of the exemption is repealed under this section. A
  municipality may not repeal the application of this exemption as it
  applies to interstate long-distance telecommunications services,
  but if a municipality has repealed the exemption before the
  effective date of Part 4, Article 1, H.B. No. 61, Acts of the 70th
  Legislature, 2nd Called Session, 1987, interstate long-distance
  telecommunications services in that municipality are not subject to
  taxes imposed under this chapter.
         (b)     The governing body of a municipality by ordinance
  adopted by a majority vote of the governing body in the manner
  required for the adoption of other ordinances may repeal the
  application of the exemption provided by Subsection (a) for
  telecommunications services sold within the municipality.
         (c)     A municipality that has repealed the application of the
  exemption may in the same manner reinstate the exemption.
         (d)     A vote of the governing body of a municipality repealing
  the application of or reinstating the exemption must be entered in
  the minutes of the municipality. The municipal secretary shall
  send to the comptroller by United States certified or registered
  mail a copy of each ordinance adopted under this section. The
  repeal of the application of the exemption or a reinstated
  exemption takes effect within the municipality as provided by
  Section 321.102(a) after receipt of a copy of the ordinance.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec.
  33.
  SUBCHAPTER D. ADMINISTRATION OF TAXES
         Sec. 321.301.  COMPTROLLER TO COLLECT AND ADMINISTER TAXES.
  The comptroller shall administer, collect, and enforce any tax
  imposed by a municipality under this chapter. The taxes imposed
  under this chapter and the tax taxes imposed under Chapter 151 220
  shall be collected together, if both taxes are imposed.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.302.  
         Sec. 321.302.  COMPTROLLER'S REPORTING DUTIES. (a) The
  comptroller shall make quarterly reports to a municipality that has
  adopted the taxes authorized by this chapter if the municipality
  requests the reports. A report must include the name, address, and
  account number of each person in the municipality that has remitted
  to the comptroller a tax payment during the quarter covered by the
  report.
         (b)  If a municipality requests an additional report, the
  comptroller shall make an additional quarterly report to the
  municipality including the name, address, and account number, if
  any, of, and the amount of tax due from, each person doing business
  in the municipality who has failed to pay the tax under this chapter
  to the municipality or under Chapter 151 220. The additional report
  must also include statements:
               (1)  showing whether or not there has been a partial tax
  payment by the delinquent taxpayer;
               (2)  showing whether or not the taxpayer is delinquent
  in the payment of sales and use value added taxes to the state; and
               (3)  describing the steps taken by the comptroller to
  collect the delinquent taxes.
         (c)  If a municipality determines that a person doing
  business in the municipality is not included in a comptroller's
  report, the municipality shall report to the comptroller the name
  and address of the person. Within 90 days after receiving the
  report from a municipality, the comptroller shall send to the
  municipality:
               (1)  an explanation as to why the person is not
  obligated for the municipal tax;
               (2)  a statement that the person is obligated for the
  municipal tax and the tax is delinquent; or
               (3)  a certification that the person is obligated for
  the municipal tax and that the full amount of the tax due has been
  credited to the municipality's account.
         (d)  The comptroller shall send by United States certified or
  registered mail to the municipal tax collector a notice of each
  person who is delinquent in the payment to the municipality of the
  taxes authorized by this chapter and shall send a copy of the notice
  to the attorney general. A notice sent under this subsection is a
  certification of the amount of tax owed and is prima facie evidence
  of a determination of that amount and of its delinquency.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.3022.
         Sec. 321.3022.  TAX INFORMATION. (a) In this section,
  "other local governmental entity" has the meaning assigned by
  Section 321.107.
         (a-1)  Except as otherwise provided by this section, the
  comptroller on request shall provide to a municipality or other
  local governmental entity that has adopted a tax under this
  chapter:
               (1)  information relating to the amount of tax paid to
  the municipality or other local governmental entity under this
  chapter during the preceding or current calendar year by each
  person doing business in the municipality or other local
  governmental entity who annually remits to the comptroller state
  and local sales value added tax payments of more than $5,000; and
               (2)  any other information as provided by this section.
         (a-2)  The comptroller on request shall provide to a
  municipality or other local governmental entity that has adopted a
  tax under this chapter and that does not impose an ad valorem tax
  information relating to the amount of tax paid to the municipality
  or other local governmental entity under this chapter during the
  preceding or current calendar year by each person doing business in
  the municipality or other local governmental entity who annually
  remits to the comptroller state and local sales value added tax
  payments of more than $500.
         (b)  The comptroller on request shall provide to a
  municipality or other local governmental entity that has adopted a
  tax under this chapter information relating to the amount of tax
  paid to the municipality or other local governmental entity under
  this chapter during the preceding or current calendar year by each
  person doing business in an area, as defined by the municipality or
  other local governmental entity, that is part of:
               (1)  an interlocal agreement;
               (2)  a tax abatement agreement;
               (3)  a reinvestment zone;
               (4)  a tax increment financing district;
               (5)  a revenue sharing agreement;
               (6)  an enterprise zone;
               (7)  a neighborhood empowerment zone;
               (8)  a crime control and prevention district;
               (9)  a fire control, prevention, and emergency medical
  services district;
               (10)  any other agreement, zone, or district similar to
  those listed in Subdivisions (1)-(9); or
               (11)  any area defined by the municipality or other
  local governmental entity for the purpose of economic forecasting.
         (c)  The comptroller shall provide the information under
  Subsection (b) as an aggregate total for all persons doing business
  in the defined area without disclosing individual tax payments.
         (d)  If the request for information under Subsection (b)
  involves not more than three persons doing business in the defined
  area who remit taxes under this chapter, the comptroller shall
  refuse to provide the information to the municipality or other
  local governmental entity unless the comptroller receives
  permission from each of the persons allowing the comptroller to
  provide the information to the municipality or other local
  governmental entity as requested.
         (e)  A separate request for information under this section
  must be made in writing by the municipality's mayor or chief
  administrative officer or by the governing body of the other local
  governmental entity each year.
         (f)  Information received by a municipality or other local
  governmental entity under this section is confidential, is not open
  to public inspection, and may be used only for the purpose of
  economic forecasting, for internal auditing of a tax paid to the
  municipality or other local governmental entity under this chapter,
  or for the purpose described in Subsection (g).
         (g)  Information received by a municipality or other local
  governmental entity under Subsection (b) may be used by the
  municipality or other local governmental entity to assist in
  determining revenue sharing under a revenue sharing agreement or
  other similar agreement.
         (h)  The comptroller may set and collect from a municipality
  or other local governmental entity reasonable fees to cover the
  expense of compiling and providing information under this section.
         (i)  Notwithstanding Chapter 551, Government Code, the
  governing body of a municipality or other local governmental entity
  is not required to confer with one or more employees or a third
  party in an open meeting to receive information or question the
  employees or third party regarding the information received by the
  municipality or other local governmental entity under this section.
  Added by Acts 1995, 74th Leg., ch. 1000, Sec. 70, eff. Oct. 1, 1995.
  Amended by Acts 1999, 76th Leg., ch. 291, Sec. 1, eff. May 29, 1999;
  Acts 2001, 77th Leg., ch. 840, Sec. 1, eff. June 14, 2001; Acts
  2003, 78th Leg., ch. 1285, Sec. 1, 2.
  Amended by:
         Acts 2007, 80th Leg., R.S., Ch. , Sec. 1, eff. April 5, 2007.
         Acts 2009, 81st Leg., R.S., Ch. , Sec. 6, eff. September 1,
  2009.
         Acts 2009, 81st Leg., R.S., Ch. , Sec. 3, eff. January 1,
  2010.
         Acts 2011, 82nd Leg., R.S., Ch. , Sec. 1, eff. September 1,
  2011.
         Sec. 321.3025.  321.3025. DISPOSITION OF AMOUNT ERRONEOUSLY
  COLLECTED. (a) If in a territory added to a municipality a
  retailer taxpayer erroneously collects an amount as a tax imposed
  under this chapter before the date the taxes imposed under this
  chapter by the municipality take effect in the added territory
  under Section 321.102, the amount collected is treated as if it were
  revenue from the taxes imposed by the municipality under this
  chapter, and the comptroller shall collect and administer the
  amount in the same manner as tax revenue.
         (b)  This section does not affect the right of a person who
  paid an amount erroneously collected by a retailer taxpayer to
  claim a refund or the authority of the comptroller to make a refund
  of that amount.
  Added by Acts 1989, 71st Leg., ch. 291, Sec. 1, eff. June 14, 1989.
         Sec.   321.303.     SALES TAX PERMITS AND EXEMPTION AND RESALE
  CERTIFICATES. (a) Each place of business of a retailer must have a
  permit issued by the comptroller under Subchapter F, Chapter 151.
         (b)     The same sales tax permit, exemption certificate, and
  resale certificate required by Chapter 151 for the administration
  and collection of the taxes imposed by that chapter satisfy the
  requirements of this chapter. No additional permit or exemption or
  resale certificate may be required except that the comptroller may
  prescribe a separate exemption certificate form for the transition
  exemption for prior contracts and bids under Section 321.209.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.304.  321.304. DISCOUNTS FOR PREPAYMENT AND TAX
  COLLECTION. All discounts allowed a retailer taxpayer under
  Chapter 151 220 for the collection and prepayment of the taxes under
  that chapter are allowed and applicable to the taxes collected
  under this chapter.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.305.  321.305. PENALTIES. The penalties provided
  by Chapter 151 220 for violations of that chapter apply to
  violations of this chapter.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.306.
         Sec. 321.306.  COMPTROLLER'S RULES. The comptroller may
  adopt reasonable rules and prescribe forms that are consistent with
  this chapter for the administration, collection, reporting, and
  enforcement of this chapter.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.307.
         Sec. 321.307.  DELINQUENT TAXES: LIMITATIONS. The
  limitations for the bringing of a suit for the collection of a tax
  imposed or a penalty due under this chapter after the tax and
  penalty are delinquent or after a determination against the
  taxpayer are the same as limitations provided by Chapter 151 220.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.308.
         Sec. 321.308.  SEIZURE AND SALE OF PROPERTY. If the
  comptroller lawfully seizes property for the payment of the taxes
  imposed under Chapter 151 220 and the property owner is delinquent
  in the payment of taxes under this chapter, the comptroller shall
  sell sufficient property to pay the delinquent taxes and penalties
  of both taxes. The proceeds of a sale of seized property shall
  first be applied to the payment of amounts due the state and the
  remainder, if any, to the amounts due to the municipality to which
  the taxes are due.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.309.
         Sec. 321.309.  SUIT FOR TAX COLLECTION. (a) A municipality
  acting through its attorney may join as a plaintiff in any suit
  brought by the attorney general to seek a judgment for delinquent
  taxes and penalties due to the municipality under this chapter.
         (b)  A municipality may bring suit for the collection of
  taxes owed to the municipality under this chapter if:
               (1)  the taxes are certified by the comptroller in the
  notice required by Section 321.302(d);
               (2)  a written notice of the tax delinquency and the
  municipality's intention to bring suit is given by certified mail
  to the taxpayer, the attorney general, and the comptroller at least
  60 days before the suit is filed; and
               (3)  neither the comptroller nor the attorney general
  disapproves of the suit.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.310.
         Sec. 321.310.  DISAPPROVAL OF MUNICIPAL SUIT. (a) The
  comptroller or the attorney general may disapprove of the
  institution of a suit by a municipality under Section 321.309(b)
  if:
               (1)  negotiations between the state and the taxpayer
  are being conducted for the purpose of the collection of delinquent
  taxes owed to the state and the municipality seeking to bring suit;
               (2)  the taxpayer owes substantial taxes to the state
  and there is a reasonable possibility that the taxpayer may be
  unable to pay the total amount owed;
               (3)  the state will bring suit against the taxpayer for
  all taxes due under Chapter 151 220 and this chapter; or
               (4)  the suit involves a critical legal question
  relating to the interpretation of state law or a provision of the
  Texas or United States constitution in which the state has an
  overriding interest.
         (b)  A notice of disapproval to a municipality must be in
  writing and give the reason for the determination by the
  comptroller or attorney general.
         (c)  A disapproval is final and not subject to review.
         (d)  Not earlier than one year after the date of a
  disapproval of the institution of a municipal collection suit, the
  municipality may again proceed as provided by Section 321.309(b)
  even though the liability of the taxpayer includes taxes for which
  the municipality has previously given notice and the comptroller or
  attorney general has disapproved of the suit.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.311.
         Sec. 321.311.  JUDGMENTS IN MUNICIPAL SUIT. (a) A judgment
  in a suit under Section 321.309(b) for or against a taxpayer does
  not affect a claim against the taxpayer by another municipality or
  the state unless the state is party to the suit.
         (b)  A municipality shall abstract a copy of each final
  judgment for taxes imposed under this chapter in a case in which the
  state is not a party and shall send to the comptroller a copy of the
  judgment and the abstract.
         (c)  A municipality shall by execution collect the taxes
  awarded to it in each judgment received by the municipality and is
  responsible for the renewal of the judgment before its expiration.
         (d)  The municipality shall notify the comptroller by
  certified mail of the amount of any taxes collected on the judgment.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.312. 321.312. RETENTION OF CERTAIN MUNICIPAL SALES
  VALUE ADDED TAXES. A municipality that holds a sales and use value
  added tax permit issued by the comptroller and that imposes a sales
  and use value added tax may retain the portion of the tax that the
  municipality collects and that constitutes the municipality's own
  tax. The municipality shall remit to the comptroller all other
  applicable local sales and use value added taxes and the state sales
  and use value added tax.
  Added by Acts 2001, 77th Leg., ch. 1263, Sec. 75, eff. Oct. 1, 2001.
  SUBCHAPTER E. TAX ELECTION PROCEDURES
         Sec. 321.401.  CALLING OF ELECTION. (a) An election under
  this chapter is called by the adoption of an ordinance by the
  governing body of a municipality.
         (b)  The governing body may call the election by a vote of a
  majority of its members.
         (c)  The governing body shall call the election if a number
  of qualified voters of the municipality equal to at least 20 percent
  of the number of votes cast in the most recent regular municipal
  election petitions the governing body for a vote on the question.
         (d)  The governing body of any municipality that has not
  adopted the additional sales and use municipal value added tax
  shall, on petition of qualified voters of the municipality equal in
  number to at least five percent of the number of voters registered
  in the municipality, provide by ordinance for the calling and
  holding of an election on the question of adopting the additional
  sales and use municipal value added tax.
         (e)  The governing body of any municipality that has adopted
  the additional sales and use municipal value added tax shall, on
  petition of qualified voters of the municipality equal in number to
  at least five percent of the number of voters registered in the
  municipality, provide by ordinance for the calling and holding of
  an election on the question of increasing, reducing, or repealing
  the additional sales and use municipal value added tax.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1991, 72nd Leg., ch. 184, Sec. 6, eff. May 24, 1991.
         Sec. 321.402.
         Sec. 321.402.  DEADLINES AFTER PETITION. (a) After the
  receipt of a petition for an election under this chapter, the
  governing body of a municipality shall determine the sufficiency of
  the petition within 30 days.
         (b)  If the petition is sufficient, the governing body shall
  pass the ordinance calling the election within 60 days after
  receiving the petition.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.403.
         Sec. 321.403.  TIME OF ELECTION. (a) An election under this
  chapter to adopt the tax authorized under Section 321.101(a) must
  be held on the first succeeding uniform election date for which
  sufficient time elapses for the holding of an election.
         (b)  An election on the approval of the additional sales and
  use municipal value added tax must be held on the next succeeding
  uniform election date not less than 30 days after the passage of the
  ordinance calling the election.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.404.
         Sec. 321.404.  BALLOT WORDING. (a) In an election to adopt
  the tax, the ballot shall be printed to provide for voting for or
  against the applicable proposition: "A one percent sales and use 
  value added tax is adopted within the city" or "The adoption of an
  additional sales and use municipal value added tax within the city
  at the rate of ________ of one percent to be used to reduce the
  property tax rate" (one-eighth, one-fourth, three-eighths, or
  one-half to be inserted as appropriate).
         (b)  In an election to repeal the tax, the ballot shall be
  printed to provide for voting for or against the applicable
  proposition: "The local sales and use value added tax within the
  city is abolished" or "The abolition of the additional sales and use 
  municipal value added tax within the city."
         (c)  In a municipality that does not impose a property tax,
  the ballot at an election to adopt the additional municipal sales
  and use value added tax shall be printed to provide for voting for
  or against the following proposition: "The adoption of an
  additional sales and use municipal value added tax within the city
  at the rate of ________ of one percent" (one-eighth, one-fourth,
  three-eighths, or one-half to be inserted as appropriate).
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.14(b), eff. Aug. 28,
  1989; Acts 1991, 72nd Leg., ch. 184, Sec. 7, eff. May 24, 1991.
         Sec. 321.405.
         Sec. 321.405.  OFFICIAL RESULTS OF ELECTION. (a) Within 10
  days after an election in which the voters approve of the adoption
  or abolition of a tax authorized by this chapter, the governing body
  of the municipality shall by resolution or ordinance entered in its
  minutes of proceedings, declare the results of the election. A
  resolution or ordinance under this section must include statements
  showing:
               (1)  the date of the election;
               (2)  the proposition on which the vote was held;
               (3)  the total number of votes cast for and against the
  proposition; and
               (4)  the number of votes by which the proposition was
  approved.
         (b)  If the application of the taxes that may be imposed
  under this chapter is changed by the results of the election, the
  municipal secretary shall send to the comptroller by United States
  certified or registered mail a certified copy of the resolution or
  the ordinance along with a map of the municipality clearly showing
  its boundaries.
         (c)  Not later than the 30th day after the date the
  comptroller receives a certified copy of an ordinance or resolution
  showing the adoption of the additional municipal sales and use
  value added tax, the comptroller shall notify the municipal
  secretary that he is prepared for the administration of the tax.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.406.
         Sec. 321.406.  FREQUENCY OF ELECTION. An election under
  this chapter in a municipality may not be held earlier than one year
  after the date of any previous election under this chapter in the
  municipality.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.407.
         Sec. 321.407.  ELECTION CONTEST: NOTICE. (a) If an
  election held under this chapter is contested, the contestant shall
  send to the comptroller by United States certified or registered
  mail within 10 days after the filing of the contest a notice of
  contest containing the style of the suit, the date it was filed, its
  case number, and the name of the court in which the contest is
  pending.
         (b)  A court may not hear an election contest of an election
  held under this chapter unless the comptroller is notified within
  the time and in the manner provided by this section.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.408.
         Sec. 321.408.  ELECTION CONTEST: DELAYED EFFECTIVE DATE.
  (a) When the comptroller receives a notice of contest of an
  election under this chapter, the effective date of the tax or the
  abolition of a tax is suspended.
         (b)  When a final judgment is entered in the election
  contest, the municipal secretary shall notify the comptroller by
  United States certified or registered mail and enclose a certified
  copy of the final judgment.
         (c)  If the final judgment in the election contest results in
  a change in the tax status of the municipality under this chapter,
  the tax or the abolition of the tax takes effect as provided by
  Section 321.102 except that the notice of the final judgment is
  substituted for the notice of election results prescribed by
  Section 321.405.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.409. 321.409. COMBINED MUNICIPAL SALES VALUE ADDED
  TAX BALLOT PROPOSITIONS. (a) Notwithstanding any provisions of
  this code or other state law, a municipality may by a combined
  ballot proposition lower or repeal any dedicated or special purpose
  municipal sales value added tax, including the additional sales
  value added tax for property tax relief, and by the same proposition
  raise or adopt any other dedicated or special purpose municipal
  sales value added tax, including the additional sales value added
  tax for property tax relief.
         (b)  A combined sales value added tax proposition under this
  section shall contain substantially the same language, if any,
  required by law for the lowering, repealing, raising, or adopting
  of each tax as appropriate.
         (c)  A negative vote on a combined sales value added tax
  proposition under this section shall have no effect on either the
  sales value added tax to be lowered or repealed by the proposition
  or the sales value added tax to be raised or adopted by the
  proposition.
         (d)  This section does not apply to sales value added tax
  elections called by any method other than by the governing body.
         (e)  This section shall not be construed to change the
  substantive law of any sales value added tax, including the allowed
  maximum rate or combined rate of local sales value added taxes.
  Added by Acts 2005, 79th Leg., Ch. , Sec. 1, eff. September 1, 2005.
  SUBCHAPTER F. REVENUE DEPOSIT, DISTRIBUTION, AND USE
         Sec. 321.501.  TRUST ACCOUNT. (a) The comptroller shall
  deposit the taxes collected by the comptroller under this chapter
  in trust in the separate suspense account of the municipality from
  which the taxes were collected.
         (b)  Repealed by Acts 2003, 78th Leg., ch. 285, Sec. 31(44).
         (c)  Repealed by Acts 2003, 78th Leg., ch. 285, Sec. 31(44).
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.123, eff. Sept.
  1, 1997; Acts 2003, 78th Leg., ch. 285, Sec. 31(44), eff. Sept. 1,
  2003.
         Sec. 321.502.
         Sec. 321.502.  DISTRIBUTION OF TRUST FUNDS. At least twice
  during each state fiscal year and at other times as often as
  feasible, the comptroller shall send to the municipal treasurer or
  to the person who performs the office of the municipal treasurer
  payable to the municipality the municipality's share of the taxes
  collected by the comptroller under this chapter.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.503.
         Sec. 321.503.  STATE'S SHARE. Before sending any money to a
  municipality under this subchapter the comptroller shall deduct two
  percent of the amount of the taxes collected within the
  municipality during the period for which a distribution is made as
  the state's charge for its services under this chapter and shall,
  subject to premiums payments under Section 321.501(c), credit the
  money deducted to the general revenue fund.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.504.
         Sec. 321.504.  AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
  comptroller may retain in the suspense account of a municipality a
  portion of the municipality's share of the tax collected for the
  municipality under this chapter, not to exceed five percent of the
  amount remitted to the municipality. If the municipality has
  abolished the tax, the amount that may be retained may not exceed
  five percent of the final remittance to the municipality at the time
  of the termination of the collection of the tax.
         (b)  From the amounts retained in a municipality's suspense
  account, the comptroller may make refunds for overpayments to the
  account and to redeem dishonored checks and drafts deposited to the
  credit of the account.
         (c)  Before the expiration of one year after the effective
  date of the abolition of a municipality's tax under this chapter the
  comptroller shall send to the municipality the remainder of the
  money in the municipality's account and shall close the account.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.505.
         Sec. 321.505.  INTEREST ON TRUST ACCOUNT. Interest earned
  on all deposits made with the comptroller under Section 321.501,
  including interest earned from retained suspense accounts, shall be
  credited to the general revenue fund.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.124, eff. Sept.
  1, 1997.
         Sec. 321.506.
         Sec. 321.506.  USE OF TAX REVENUE BY MUNICIPALITY. Except as
  provided by Section 321.507, the money received by a municipality
  under this chapter is for the use and benefit of the municipality
  and may be used for any purpose for which the general funds of the
  municipality may be used, except that a municipality may not pledge
  the revenue received under this chapter to the payment of bonds or
  other indebtedness.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.507. 321.507. USE OF ADDITIONAL MUNICIPAL SALES
  AND USE VALUE ADDED TAX. (a) In each year in which a municipality
  imposes an additional municipal sales and use value added tax, if
  the revenue from the collection of the additional tax exceeds the
  amount of taxes computed for the municipality under Section
  26.04(c), except for the amount required to be deposited in a
  special account under Subsection (b), the excess shall be deposited
  in an account to be called the municipal sales value added tax debt
  service fund. Revenue deposited in the municipal sales value added
  tax debt service fund may be spent only for the reduction of lawful
  debts of the municipality, except that deposits that exceed the
  amount of revenue needed to pay the debt service needs of the
  municipality in the current year may be used for any municipal
  purpose consistent with the municipal budget.
         (b)  Revenue from the collection of the additional municipal
  sales and use value added tax in each of the first three years in
  which the tax is imposed in the municipality in excess of the amount
  determined as provided by Section 26.041(d), for each year shall be
  deposited in an account to be called the excess sales value added
  tax revenue fund. During those three years, revenue deposited in
  the excess sales value added tax revenue fund may be spent only if
  and to the extent that taxes or other revenues of the municipality
  are collected in amounts less than anticipated. After that period,
  the revenue in the fund may be used for any municipal purpose
  consistent with the municipality's budget. The fund ceases to
  exist when all revenue deposited in the fund has been spent. This
  subsection does not apply to a municipality that does not impose a
  property tax.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.16(a), eff. Aug. 28,
  1989.
         Sec. 321.508.
         Sec. 321.508.  PLEDGE OF TAX REVENUE. (a) A municipality
  may call and hold an election on the issue of authorizing the
  municipality to pledge a percentage of the sales and use value added
  tax revenue received under Section 321.101(a) or (b), or both, to
  the payment of obligations issued to pay all or part of the costs of
  one or more sports needed infrastructure, development and community
  venue other capital projects located in within or otherwise
  supporting the municipality.
         (b)  The ballot at the election under this section must be
  printed to permit voting for or against the proposition:
  "Authorizing the City of ______ (insert name of municipality) to
  pledge not more than ______ percent (insert percentage not to
  exceed 25 percent) of the revenue received from the municipal the
  _________ (insert municipal sales and use value added tax,
  additional municipal sales and use tax, or both) previously adopted
  in the city to the payment of obligations issued to pay all or part
  of the costs of _________ (insert description of each sports and
  community venue project)."
         (c)  If a majority of the voters vote in favor of the
  proposition, the municipality may:
               (1)  issue bonds, notes, or other obligations that are
  payable from the pledged revenues to pay for all or part of the
  costs of the sports and community venue project or projects
  described in the proposition; and
               (2)  set aside the portion of the revenue approved at
  the election that the municipality actually receives and pledge
  that revenue as security for the payment of the bonds, notes, or
  other obligations.
         (d)  If the municipality pledges revenue under Subsection
  (c), the pledge and security interest shall continue while the
  bonds, notes, or obligations, including refunding obligations, are
  outstanding and unpaid.
         (e)  The municipality may direct the comptroller to deposit
  the pledged revenue to a trust or account as may be required to
  obtain the financing and to protect the related security interest.
         (f)  Sections 321.506 and 321.507 do not apply to taxes
  pledged under this section.
         (g)  In this section, "sports and community venue project"
  has the meaning assigned by Section 334.001, Local Government Code.
  Added by Acts 1997, 75th Leg., ch. 551, Sec. 4, eff. Sept. 1, 1997.
         Sec. 321.509.
         Sec. 321.509.  TAX POWERS OF MUNICIPALITY NOT LIMITED. This
  chapter does not abolish or limit the tax powers of a municipality.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 321.510. 321.510. REALLOCATION OF MUNICIPAL OR LOCAL
  GOVERNMENTAL ENTITY TAX REVENUE. (a) In this section, "local
  governmental entity" includes any governmental entity created by
  the legislature that has a limited purpose or function, that has a
  defined or restricted geographic territory, and that is authorized
  by law to impose a local sales and use value added tax the
  imposition, computation, administration, enforcement, and
  collection of which is governed by this chapter.
         (b)  This section applies only if:
               (1)  the comptroller:
                     (A)  reallocates local tax revenue from a
  municipality or local governmental entity to another municipality
  or local governmental entity; or
                     (B)  refunds local tax revenue that was previously
  allocated to a municipality or local governmental entity; and
               (2)  the amount the comptroller reallocates or refunds
  is at least equal to the lesser of:
                     (A)  $200,000;
                     (B)  an amount equal to 10 percent of the revenue
  received by the municipality or local governmental entity under
  this chapter during the calendar year preceding the calendar year
  in which the reallocation or refund is made; or
                     (C)  an amount that increases or decreases the
  amount of revenue the municipality or local governmental entity
  receives under this chapter during a calendar month by more than 15
  percent as compared to revenue received by the municipality or
  local governmental entity during the same month in any previous
  year.
         (c)  Subject to the criteria provided by this section, a
  municipality or local governmental entity may request a review of
  all available sales value added tax returns and reports in the
  comptroller's possession filed by not more than five individual
  taxpayers doing business in the municipality or local governmental
  entity that are included and identified by the municipality or
  local governmental entity from the information received from the
  comptroller under Section 321.3022 and that relate to a
  reallocation or refund in an amount described by Subsection (b).
         (d)  The comptroller shall provide the returns and reports
  requested under Subsection (c) for review regardless of whether the
  information in the returns or reports is confidential under state
  law, including Sections 111.006 and 151.027.
         (e)  The provision of confidential information to a
  municipality or local governmental entity under this section does
  not affect the confidential nature of the information in the
  returns or reports. A municipality or local governmental entity
  shall use the information only in a manner that maintains the
  confidential nature of the information and may not disclose or
  release the information to the public.
         (f)  A municipality or local governmental entity must submit
  the request under Subsection (c) not later than the 90th day after
  the date the municipality or local governmental entity discovers a
  reallocation or refund described by Subsection (b).
         (g)  Not earlier than the 30th day or later than the 90th day
  after the date the comptroller receives a request under Subsection
  (c), the comptroller shall provide the requested returns and
  reports to the requesting municipality or local governmental entity
  for review.
         (h)  The comptroller may set and collect from a municipality
  or local governmental entity a reasonable fee to cover the expense
  of compiling and providing information under this section.
  Added by Acts 2011, 82nd Leg., R.S., Ch. , Sec. 2, eff. September 1,
  2011.
  TAX CODE
  TITLE 3. LOCAL TAXATION
  SUBTITLE C. LOCAL SALES AND USE VALUE ADDED TAXES
  CHAPTER 322. SALES AND USE VALUE ADDED TAXES FOR SPECIAL PURPOSE
  TAXING AUTHORITIES
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 322.001.  APPLICATION OF CHAPTER. (a) This chapter
  applies to the imposition, assessment, collection, administration,
  and enforcement of a sales and use value added tax imposed under
  Chapter 451, 452, 453, or 460, Transportation Code.
         (b)  The effective dates and rates of the taxes imposed by a
  taxing entity are determined under the laws authorizing the
  adoption of the taxes.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.266, eff. Sept. 1,
  1997; Acts 2003, 78th Leg., ch. 209, Sec. 56, eff. Oct. 1, 2003.
         Sec. 322.002.  DEFINITIONS. In this chapter:
               (1)  "Taxing entity" means a rapid transit authority, a
  regional transit authority, including a subregional transportation
  authority, or a municipal mass transit department created under
  Chapter 451, 452, or 453, Transportation Code, or a coordinated
  county transportation authority created under Chapter 460,
  Transportation Code, that has adopted a sales and use value added
  tax under the law authorizing the creation of the entity.
               (2)  "Entity area" means the geographical limits of a
  taxing entity.
               (3)  "Municipal sales and use value added tax" means a
  sales and use value added tax imposed by a municipality under the
  Municipal Sales and Use Value added Tax Act (Chapter 321) within an
  entity area.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.267, eff. Sept. 1,
  1997; Acts 2003, 78th Leg., ch. 209, Sec. 57, eff. Oct. 1, 2003.
  SUBCHAPTER B. ASSESSMENT AND COMPUTATION OF TAXES
         Sec. 322.101.  SALES VALUE ADDED TAX. There A value added
  tax is imposed on the supply in a taxing entity of any service or
  property by any person in the ordinary course of a sales tax at the
  trade or business in which the person engages for the purpose of
  profit. The rate of value added tax imposed is authorized and set as
  provided by the law authorizing the creation of the taxing entity
  and applied to the taxable receipts from the sale all supplies
  within the entity area of all taxable items services and property
  that are subject to the sales value added tax under Chapter 151 220.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec.   322.102.     USE TAX. In a taxing entity, there is imposed
  an excise tax on the use, storage, and other consumption within the
  entity area of taxable items purchased, leased, or rented from a
  retailer during the period that the sales tax is effective within
  the entity area. The rate of the excise tax is the same rate as the
  rate of the sales tax imposed by the taxing entity and is applied to
  the sales price of the taxable item.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 322.103.  COMPUTATION OF SALES VALUE ADDED TAXES. (a)
  Each retailer taxpayer in an entity area shall add the sales value
  added tax imposed under this chapter, the sales value added taxes
  imposed under Chapter 151 220, and, if applicable, any sales value
  added taxes imposed under Chapter 321 or 323 to the sales supply
  price, and the sum of the taxes is shall be a part of the price, a
  debt of the purchaser customer to the retailer taxpayer until paid,
  and recoverable at law in the same manner as the purchase supply
  price.
         (b)  The amount of the total tax is computed by multiplying
  the combined applicable tax rates by the amount of the sales price. 
  taxable receipts received in consideration for supplying the
  services or property. If the product results in a fraction of a
  cent less than one-half of one cent, the fraction of a cent is not
  collected. If the fraction is one-half of one cent or more, the
  fraction shall be collected as one cent.
         (c)     The exclusion provided by Section 151.411 applies to a
  retailer under this chapter 50 percent of whose receipts from the
  sales of taxable items comes from individual transactions in which
  the sales price is an amount on which no tax is produced from the
  combined applicable tax rates.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 322.104.  COMPUTATION OF USE TAX. (a) In each taxing
  entity the tax imposed by Subchapter D, Chapter 151 220, the tax
  imposed under Section 321.104(a), if applicable, and the tax
  imposed under Section 322.102 are added together to form a single
  combined tax rate, except in a situation described by Section
  322.105(b)..
         (b)  The formula prescribed by Section 322.103(b) applies to
  the computation of the amount of the tax under this section.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec.   322.105.     USE TAX: WHERE USE OCCURS. (a) In
  determining the incidence of the use tax of a taxing entity, the
  name of the taxing entity is substituted in Subchapter D, Chapter
  151, for "this state" where those words are used to designate the
  taxing entity or delimit the tax imposed. However, the excise tax
  of a taxing entity on the use, storage, or other consumption of a
  taxable item does not apply if the item is first used, stored, or
  consumed in an area other than an entity area.
         (b)     If a sale of a taxable item is consummated within this
  state but not within an entity area and the item is shipped directly
  or brought by the purchaser or lessee directly into an entity area,
  the item is subject to the entity's use tax. The use is considered
  to be consummated at the location where the item is first used,
  stored, or consumed after the intrastate transit has ceased.
         (c)     If a taxable item is shipped from outside this state to a
  customer within this state, the item is subject to the use tax of
  the taxing entity and not its sales tax. A use is considered to be
  consummated at the first point in this state where the item is
  stored, used, or consumed after the interstate transit has ceased.
  A taxable item delivered to a point in this state is presumed to be
  for storage, use, or consumption at that point until the contrary is
  established.
         (d)     Repealed by Acts 2007, 80th Leg., R.S., Ch. 823, Sec.
  1(1), eff. September 1, 2007.
         (e)     With respect to a taxable service, "use" means the
  derivation in the taxing entity of direct or indirect benefit from
  the service.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.21(a), eff. Aug. 28,
  1989; Acts 1991, 72nd Leg., ch. 705, Sec. 29, eff. Sept. 1, 1991.
  Amended by:
         Acts 2007, 80th Leg., R.S., Ch. , Sec. 1(1), eff. September 1,
  2007.
         Sec. 322.105.  REPEALED
         Sec. 322.106.  TAX INAPPLICABLE WHEN NO STATE TAX;
  EXCEPTIONS. (a). The sales value added tax of a taxing entity does
  not apply to the sale supply of a taxable item services or property
  unless the sales value added tax imposed under Subchapter C,
  Chapter 151, 220 also applies to the sale.
         (b)     The excise tax of a taxing entity on the use, storage, or
  consumption of a taxable item does not apply to the use, storage, or
  consumption of an item unless the tax imposed by Subchapter D,
  Chapter 151, also applies to the use, storage, or consumption of the
  item.
         (c)     Subsection (b) does not apply to the application of the
  tax in a situation described by Section 322.105(b).
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 30, eff. Sept. 1,
  1991.
         Sec. 322.108.  CERTAIN PROVISIONS OF MUNICIPAL SALES AND USE
  VALUE ADDED TAX APPLICABLE. (a) Except as provided by Subsection
  (b), the following apply to the taxes imposed by this chapter in the
  same manner as applicable to a municipality under Chapter 321:
               (1)  Section 321.002(a)(3);
               (2)  Section 321.003;
               (3)  Section 321.203;
               (4)  Section 321.205(d);
               (5)  Section 321.208;
               (6)  Section 321.209;
               (7)  Section 321.303;
               (8)  Section 321.304;
               (9)  Section 321.305; and
               (10)  Section 321.510.
         (b)  The provisions of this chapter applicable to a taxing
  entity created under Chapter 453, Transportation Code, prevail over
  any inconsistent provision in a statute listed in Subsection (a).
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.20(a), eff. Aug. 28,
  1989; Acts 1997, 75th Leg., ch. 165, Sec. 30.268, eff. Sept. 1,
  1997.
  Amended by:
         Acts 2011, 82nd Leg., R.S., Ch. , Sec. 3, eff. September 1,
  2011.
         Sec.   322.109.     TELECOMMUNICATIONS EXEMPTION. (a) There are
  exempted from the taxes imposed by a taxing entity under this
  chapter the sales within the entity area of telecommunications
  services unless the application of the exemption is repealed under
  this section. A taxing entity may not repeal the application of
  this exemption as it applies to interstate long-distance
  telecommunications services, but if a taxing entity has repealed
  the exemption before the effective date of Part 4, Article 1, H.B.
  No. 61, Acts of the 70th Legislature, 2nd Called Session, 1987,
  interstate long-distance telecommunications services in that
  taxing entity are not subject to taxes imposed under this chapter.
         (b)     Except as provided by Subsection (d), the board of a
  taxing entity may, by a majority vote of the board in the manner
  required for the adoption of other orders, repeal the application
  of the exemption provided by Subsection (a) for telecommunications
  services sold within the city.
         (c)     A taxing entity board that has repealed the application
  of the exemption may in the same manner reinstate the exemption.
         (d)     The governing board of a taxing entity created under
  Chapter 451, Transportation Code, may not repeal the application of
  the exemption provided by Subsection (a) unless the repeal is first
  approved by a majority of the members of the governing body of each
  municipality that created the taxing entity. A reinstatement of
  the exemption must be approved in the same manner.
         (e)     A vote of a taxing entity board repealing the
  application of or reinstating the exemption must be entered in the
  minutes of the entity. The entity board chairman or secretary shall
  send to the comptroller by United States certified or registered
  mail a copy of each order adopted under this section. The repeal of
  the application of the exemption or a reinstated exemption takes
  effect within the entity on the first day of the first calendar
  quarter after the expiration of the first complete calendar quarter
  after the date on which the comptroller receives a copy of the
  order.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec.
  34; Acts 1999, 76th Leg., ch. 1008, Sec. 1, eff. June 18, 1999.
         Sec. 322.110.  TRANSITION EXEMPTION IN CERTAIN TAXING
  ENTITIES. (a) The taxable receipts from the sale, use, or rental 
  supply of services and the storage, use, or consumption of taxable
  items/or property in this state are exempt from the tax imposed
  under this chapter by a taxing entity created under Chapter 453,
  Transportation Code, if the items are services and/or propertyare
  used:
               (1)  for the performance of a written contract entered
  into before the date the tax takes effect in the taxing entity, if
  the contract is not subject to change or modification by reason of
  the tax; or
               (2)  pursuant to an obligation of a bid or bids
  submitted before the date the tax takes effect in the taxing entity,
  if the bid or bids may not be withdrawn, modified, or changed by
  reason of the tax.
         (b)  The exemptions provided by this section have no effect
  after three years from the date the tax takes effect in the taxing
  entity.
  Added by Acts 1989, 71st Leg., ch. 2, Sec. 14.19(a), eff. Aug. 28,
  1989. Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.269, eff.
  Sept. 1, 1997.
  SUBCHAPTER C. ADMINISTRATION OF TAXES
         Sec. 322.201.  COMPTROLLER TO COLLECT AND ADMINISTER TAXES.
  (a) The comptroller shall administer, collect, and enforce the
  sales and use value added tax of a taxing entity.
         (b)  The sales and use value added taxes imposed under this
  chapter, the taxes imposed under Chapters 321 and 323, and the taxes
  imposed under Chapter 151 220 shall be collected together to the
  extent that each is imposed in an entity area.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 322.202.  COMPTROLLER'S REPORTING DUTIES. (a) The
  comptroller shall report to a taxing entity on the entity's sales
  and use value added taxes by making substantially the same reports
  that are required to be made by the comptroller to a municipality
  under Sections 321.302(a), (b), and (c).
         (b)  The comptroller shall send to a taxing entity by United
  States certified or registered mail a notice of each person who is
  delinquent in the payment of the entity's sales and use value added
  taxes and shall send to the attorney general a copy of the notice. A
  notice sent under this subsection is a certification of the amount
  of tax owed and is prima facie evidence of a determination of that
  amount and of its delinquency.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 322.2022.  TAX INFORMATION. (a) Except as otherwise
  provided by this section, the comptroller on request shall provide
  to a taxing entity:
               (1)  information relating to the amount of tax paid to
  the entity under this chapter during the preceding or current
  calendar year by each person doing business in the area included in
  the entity who annually remits to the comptroller state and local
  sales value added tax payments of more than $5,000; and
               (2)  any other information as provided by this section.
         (b)  The comptroller on request shall provide to a taxing
  entity information relating to the amount of tax paid to the entity
  under this chapter during the preceding or current calendar year by
  each person doing business in an area included in the entity, as
  defined by the entity, that is part of:
               (1)  an interlocal agreement;
               (2)  a revenue sharing agreement;
               (3)  any other agreement similar to those listed in
  Subdivisions (1) and (2); or
               (4)  any area defined by the entity for the purpose of
  economic forecasting.
         (c)  The comptroller shall provide the information under
  Subsection (b) as an aggregate total for all persons doing business
  in the defined area without disclosing individual tax payments.
         (d)  If the request for information under Subsection (b)
  involves not more than three persons doing business in the defined
  area who remit taxes under this chapter, the comptroller shall
  refuse to provide the information to the taxing entity unless the
  comptroller receives permission from each of the persons allowing
  the comptroller to provide the information to the entity as
  requested.
         (e)  A separate request for information under this section
  must be made in writing by the governing body of the taxing entity
  each year.
         (f)  Information received by a taxing entity under this
  section is confidential, is not open to public inspection, and may
  be used only for the purpose of economic forecasting, for internal
  auditing of a tax paid to the entity under this chapter, or for the
  purpose described by Subsection (g).
         (g)  Information received by a taxing entity under
  Subsection (b) may be used by the entity to assist in determining
  revenue sharing under a revenue sharing agreement or other similar
  agreement.
         (h)  The comptroller may set and collect from a taxing entity
  reasonable fees to cover the expense of compiling and providing
  information under this section.
         (i)  Notwithstanding Chapter 551, Government Code, the
  governing body of a taxing entity is not required to confer with one
  or more employees or a third party in an open meeting to receive
  information or question the employees or third party regarding the
  information received by the entity under this section.
  Added by Acts 2009, 81st Leg., R.S., Ch. , Sec. 7, eff. September 1,
  2009.
  Amended by:
         Acts 2011, 82nd Leg., R.S., Ch. , Sec. 2, eff. September 1,
  2011.
         Sec. 322.203.  COMPTROLLER'S RULES. The comptroller may
  adopt reasonable rules and prescribe forms that are consistent with
  this chapter for the administration, collection, and enforcement of
  this chapter and for the reporting of the taxes imposed under this
  chapter.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 322.204.  DELINQUENT TAXES: LIMITATIONS. The
  limitations for the bringing of a suit for the collection of a sales
  and use value added tax imposed by a taxing entity or a penalty due
  on the tax after the tax and penalty are delinquent or after a
  determination against a taxpayer are the same as the limitations
  provided by Chapter 151 220.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 322.205.  SEIZURE AND SALE OF PROPERTY. (a) If the
  comptroller lawfully seizes property for the payment of the taxes
  imposed under Chapter 151 220 and the property owner is delinquent
  in the payment of taxes under this chapter, the comptroller shall
  sell sufficient property to pay the delinquent taxes and penalties
  under this chapter, Chapter 151 220, and Chapter 321.
         (b)  The proceeds of the sale of seized property shall first
  be applied to the payment of amounts due the state, then to the
  payments of amounts due a municipality under Chapter 321, and the
  remainder, if any, to the payment of amounts due to the taxing
  entity to which the taxes are due.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 322.206.  SUITS FOR TAX COLLECTION. (a) A taxing
  entity acting through its attorney may join as a plaintiff in any
  suit brought by the attorney general to seek a judgment for
  delinquent taxes and penalties due to the taxing entity under this
  chapter.
         (b)  A taxing entity may bring suit for the collection of
  taxes owed to the taxing entity under this chapter if:
               (1)  the taxes are certified by the comptroller in the
  notice required by Section 322.202(b);
               (2)  a written notice of the tax delinquency and the
  entity's intention to bring suit is given by certified mail to the
  taxpayer, the attorney general, and the comptroller at least 60
  days before the suit is filed; and
               (3)  neither the comptroller nor the attorney general
  disapproves of the suit.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 322.207.  DISAPPROVAL OF SUIT. (a) The comptroller or
  the attorney general may disapprove of the institution of a suit by
  a taxing entity under Section 322.206(b) if:
               (1)  negotiations between the state and the taxpayer
  are being conducted for the purpose of the collection of delinquent
  taxes owed to the state and the taxing entity seeking to bring suit;
               (2)  the taxpayer owes substantial taxes to the state
  and there is a reasonable possibility that the taxpayer may be
  unable to pay the total amount owed;
               (3)  the state will bring suit against the taxpayer for
  all taxes due under Chapter 151 220 and this chapter; or
               (4)  the suit involves a critical legal question
  relating to the interpretation of state law or a provision of the
  Texas or United States constitution in which the state has an
  overriding interest.
         (b)  A notice of disapproval to a taxing entity must be in
  writing and give the reason for the determination by the
  comptroller or attorney general.
         (c)  A disapproval is final and not subject to review.
         (d)  Not earlier than one year after the date of a
  disapproval of the institution of a taxing entity collection suit,
  the taxing entity may again proceed as provided by Section
  322.206(b) even though the liability of the taxpayer includes taxes
  for which the entity has previously given notice and the
  comptroller or attorney general has disapproved of the suit.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 322.208.  JUDGMENTS IN SUIT. (a) A judgment in a suit
  under Section 322.206(b) for or against a taxpayer does not affect a
  claim against the taxpayer by a municipality or the state unless the
  state is party to the suit.
         (b)  A taxing entity shall abstract a copy of each final
  judgment for taxes imposed under this chapter in a case in which the
  state is not a party and shall send to the comptroller a copy of the
  judgment and the abstract.
         (c)  A taxing entity shall by execution collect the taxes
  awarded to it in each judgment received by it and is responsible for
  the renewal of the judgment before its expiration.
         (d)  The taxing entity shall notify the comptroller by
  certified mail of the amount of any taxes collected on the judgment.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  SUBCHAPTER D. REVENUE DEPOSIT, DISTRIBUTION, AND USE
         Sec. 322.301.  COLLECTIONS HELD BY COMPTROLLER. The
  comptroller shall deposit, hold, account for, and transmit sales
  and use value added taxes collected under this chapter for each
  taxing entity in the same manner as required under Section 321.501
  for each municipality.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 322.302.  DISTRIBUTION OF TRUST FUNDS. At least
  quarterly during each state fiscal year and as often as feasible,
  the comptroller shall send to the person at each taxing entity who
  performs the function of entity treasurer, payable to the taxing
  entity, the entity's share of the taxes collected by the
  comptroller under this chapter.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1989, 71st Leg., ch. 16, Sec. 5, eff. Aug. 31, 1989;
  Acts 1997, 75th Leg., ch. 165, Sec. 30.270, eff. Sept. 1, 1997;
  Acts 1999, 76th Leg., ch. 1467, Sec. 2.68, eff. Oct. 1, 1999.
         Sec. 322.303.  STATE'S SHARE. Before sending any money to a
  taxing entity under this subchapter, the comptroller shall deduct
  two percent of the amount of the taxes collected within the entity
  area during the period for which a distribution is made as the
  state's charge for its services under this chapter and shall credit
  the money deducted to the general revenue fund.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 322.304.  AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
  comptroller may retain in the suspense account of a taxing entity a
  portion of the entity's share of the tax collected for the entity
  under this chapter, not to exceed five percent of the amount
  remitted to the entity. If the entity has abolished the tax, the
  amount that may be retained may not exceed five percent of the final
  remittance to the entity at the time of the termination of the
  collection of the tax.
         (b)  From the amounts retained in an entity's suspense
  account, the comptroller may make refunds for overpayments to the
  account and to redeem dishonored checks and drafts deposited to the
  credit of the account.
         (c)  Before the expiration of one year after the effective
  date of the abolition of an entity's tax under this chapter other
  than a department under Chapter 453, Transportation Code, the
  comptroller shall send to the entity the remainder of the money in
  the entity's account and shall close the account.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.271, eff. Sept. 1,
  1997.
         Sec. 322.305.  INTEREST ON TRUST ACCOUNTS. Interest earned
  on all deposits made with the comptroller under this chapter,
  including interest earned on retained accounts, shall be credited
  to the general revenue fund.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.125, eff. Sept.
  1, 1997.
         Sec. 322.306.  RETENTION OF CERTAIN SPECIAL PURPOSE DISTRICT
  SALES VALUE ADDED TAXES. A taxing entity that holds a sales and use 
  value added tax permit issued by the comptroller and that imposes a
  sales and use value added tax may retain the portion of the tax that
  the taxing entity collects and that constitutes the entity's own
  tax. The taxing entity shall remit to the comptroller all other
  applicable local sales and use value added taxes and the state sales
  and use value added tax.
  Added by Acts 2001, 77th Leg., ch. 1263, Sec. 76, eff. Oct. 1, 2001.
  TAX CODE
  TITLE 3. LOCAL TAXATION
  SUBTITLE C. LOCAL SALES AND USE VALUE ADDED TAXES
  CHAPTER 323. COUNTY SALES AND USE VALUE ADDED TAX ACT
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 323.001.  SHORT TITLE. This chapter may be cited as the
  County Sales and Use Value added Tax Act.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 323.002.  323.002. DEFINITIONS. The words used in this
  chapter and defined by Chapters 151 220 and 321 have the meanings
  assigned by Chapters 151 220 and 321.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 323.003.
         Sec. 323.003.  OTHER PORTIONS OF TAX APPLICABLE. Subtitles
  A and B, Title 2, and Chapters 142 and 151 Chapter 220 apply to the
  taxes and to the administration and enforcement of the taxes
  imposed by this chapter in the same manner that those laws apply to
  state taxes unless modified by this chapter.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.13, eff. Aug. 28,
  1989; Acts 2003, 78th Leg., ch. 1310, Sec. 117, eff. Oct. 1, 2003.
  SUBCHAPTER B. IMPOSITION OF SALES AND USE VALUE ADDED TAXES BY
  COUNTIES
         Sec. 323.101.  TAX AUTHORIZED. (a) A qualified county may
  adopt or repeal the county sales and use value added tax authorized
  by this chapter at an election in which a majority of the qualified
  voters of the county approve the adoption or repeal of the tax, as
  applicable.
         (b)  A county is qualified to adopt the tax only if no part of
  the county is located in a rapid transit authority created under
  Chapter 451, Transportation Code, or a regional transportation
  authority created under Chapter 452 of that code.
         (c)  An authority created under Chapter 451 or 452,
  Transportation Code, is prohibited from imposing the tax provided
  for by those chapters in a county in which the county sales and use 
  value added tax provided for by this section is in effect or is
  scheduled to take effect. For the purposes of this section, an
  authority is not considered to be located in any county in which
  fewer than 250 persons are both residents of the authority and the
  county.
         (d)  A county may not adopt a sales and use value added tax
  under this section if as a result of the adoption of the tax the
  combined rate of all sales and use taxes imposed by the county and
  other political subdivisions of this state having territory in the
  county would exceed two percent at any location in the county.
         (e)     If the voters of a county approve the adoption of a sales
  and use tax at an election held on the same election date on which a
  municipality having territory in the county adopts a sales and use
  tax or an additional sales and use tax and as a result the combined
  rate of all sales and use value added taxes imposed by the county
  and other political subdivisions of this state having territory in
  the county would exceed two three percent at any location in the
  county, the election to adopt a county sales and use tax has no
  effect.
         (e)  If the voters of a county approve the adoption of a value
  added tax at an election held on the same election date on which a
  municipality having territory in the county adopts a value added
  tax or an additional municipal value added tax and as a result the
  combined rate of all value added taxes imposed by the county and
  other political subdivisions of this state having territory in the
  county would exceed three percent at any location in the county, the
  election to adopt a county value added tax has no effect.
         (f)  The provisions of this chapter govern the application,
  collection, and administration of a sales and use value added tax
  imposed under Chapter 285 or 775, Health and Safety Code, to the
  extent not inconsistent with the provisions of those chapters.
  Provided, however, that Subsection (b) shall not apply to a tax
  authorized under those chapters.
         (g)  Expired.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 54, Sec. 2, eff. Oct.
  20, 1987; Acts 1989, 71st Leg., 1st C.S., ch. 40, Sec. 6, eff. Sept.
  1, 1989; Acts 1997, 75th Leg., ch. 65, Sec. 2, eff. May 9, 1997;
  Acts 1997, 75th Leg., ch. 165, Sec. 30.272, eff. Sept. 1, 1997.
  Amended by:
  Acts 2011, 82nd Leg., R.S., Ch. , Sec. 15, eff. June 17, 2011.
         Sec. 323.102.
         Sec. 323.102.  EFFECTIVE DATES: NEW TAX, TAX REPEAL. (a)
  Except as provided by Subsection (c), a tax imposed under this
  chapter takes effect on the October 1st after the expiration of the
  first complete calendar quarter occurring after the date on which
  the comptroller receives a notice of the action as required by
  Section 323.405(b).
         (b)  The repeal of a tax abolished under this chapter takes
  effect on the October 1st after the expiration of the first complete
  calendar quarter occurring after the date on which the comptroller
  receives a notice of the action as required by Section 323.405(b).
         (c)  A tax imposed under Section 323.105 of this code or
  Chapter 326 or 383, Local Government Code, takes effect on the first
  day of the first calendar quarter after the expiration of the first
  complete calendar quarter occurring after the date on which the
  comptroller receives a notice of the action as required by Section
  323.405(b).
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1989, 71st Leg., ch. 256, Sec. 2, eff. Sept. 1,
  1989; Acts 1995, 74th Leg., ch. 342, Sec. 1, eff. Aug. 28, 1995;
  Acts 1999, 76th Leg., ch. 1467, Sec. 2.69, eff. June 19, 1999.
  Amended by:
  Acts 2007, 80th Leg., R.S., Ch. , Sec. 12, eff. September 1, 2007.
         Sec. 323.103.  SALES 323.103. VALUE ADDED TAX. (a) In a
  county that has adopted the tax authorized by this chapter, there is
  imposed a value added tax on the taxable receipts from the sale at
  retail of taxable items within the supply in such county of any
  service or property by any person in the ordinary course of a trade
  or business in which the person engages for the purpose of profit.
         (b)  The tax is imposed at the rate approved by the voters.
  The rate, when the tax is adopted, must be equal to any increment
  any increment of one-half eighth percentage point from zero to a
  maximum of one percent, or in a unless the county that includes no
  territory within the limits of a municipality, one in which case the
  maximum rate shall be two percent.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 323.104.  USE TAX. In a , unless the county that has
  adopted the tax authorized by this chapter, there is imposed an
  excise tax on the use, storage, or includes no territory within the
  limits of a special district (i.e., any local taxing unit other
  consumption within the than a municipality, county of taxable items
  purchased, leased, or rented from a retailer during the period that
  the tax is effective within the county. The rate of the excise tax
  is the same as school district), in which case the rate of the sales
  tax portion maximum rate shall be two percent. The rate may be
  reduced in one or more increments of the tax and is one-eighth of
  one percent to a minimum of one-eighth of one percent or increased
  in one or more increments of one-eighth of one percent to a maximum
  of one percent, or the tax may be abolished. This rate is then
  applied to the sales price of the taxable item. With respect to a
  taxable service, "use" means the derivation in the county of direct
  or indirect benefit from the service taxpayer's taxable receipts
  attributable to any applicable tax period to determine the
  applicable municipal value added tax.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 32, eff. Sept. 1,
  1991.
  Sec.
         Sec. 323.104.  REPEALED
         Sec. 323.105.  CRIME CONTROL DISTRICT TAX. (a) Subject to
  an election held in accordance with the Crime Control and
  Prevention District Act, a county in which a crime control and
  prevention district is established shall adopt a sales and use 
  value added tax in the area of the district for the purpose of
  financing the operation of the crime control and prevention
  district. The revenue from the tax may be used only for the purpose
  of financing the operation of the crime control and prevention
  district. The proposition for adopting a tax under this section and
  the proposition for creation of a crime control and prevention
  district shall be submitted at the same election. For purposes of
  Subsection (c) of Section 323.101 of this code, a tax under this
  section is not a county sales and use value added tax.
         (b)  A tax adopted for a district under this section for
  financing the operation of the district may be decreased in
  increments of one-eighth of one percent by order of the board of
  directors of the district.
         (c)  The board of directors or the governing body of the
  governmental entity that proposed the creation of the crime control
  and prevention district may call an election on the question of
  decreasing the tax rate in increments of one-eighth of one percent
  in the district if the district was created before January 1, 1996.
  The board of directors or governing body may dedicate a portion of
  the tax for the payment of bonds used in conjunction with the
  renovation or extension of a county-owned or municipally owned
  convention center facility, as defined in Section 351.001, that was
  constructed before 1969 if the dedication is approved by a majority
  of the qualified voters in an election held in the district on the
  question of decreasing the tax rate. At the election, the ballot
  shall be printed to provide for voting for or against the following
  proposition: "The decrease of the _______ Crime Control and
  Prevention District sales and use value added tax to _____ percent
  and authorizing the use of ______ of one percent for the payment of
  bonds issued for the renovation or extension of certain
  county-owned or municipally owned convention center facilities as
  that term is defined under Section 351.001, Tax Code, and
  authorizing that the tax expire on payment of the bonds."
         (d)  The rate of a tax adopted for a district under this
  section may be increased in increments of one-eighth of one
  percent, not to exceed a total tax rate of one-quarter half percent
  for financing the operation of the crime control and prevention
  district, by order of the board of directors of the crime control
  and prevention district if approved by a majority of the qualified
  voters voting at an election called by the board and held in the
  district on the question of increasing the tax rate. At the
  election, the ballot shall be printed to provide for voting for or
  against the following proposition: "The increase of the
  ____________ Crime Control and Prevention District sales and use 
  value added tax rate to ____________ percent." If there is an
  increase or decrease under this subsection in the rate of a tax
  imposed under this section, the new rate takes effect on the first
  day of the next calendar quarter after the expiration of one
  calendar quarter after the comptroller receives notice of the
  increase or decrease. However, if the comptroller notifies the
  president of the board of directors of the district in writing
  within 10 days after receipt of the notification that the
  comptroller requires more time to implement reporting and
  collection procedures, the comptroller may delay implementation of
  the rate change for one whole calendar quarter. In that event, the
  new rate takes effect on the first day of the next calendar quarter
  following the elapsed quarter.
         (e)  The comptroller shall remit to the county amounts
  collected at the rate imposed under this section as part of the
  regular allocation of county tax revenue collected by the
  comptroller if the district is composed of the entire county. The
  comptroller shall, if the district is composed of an area less than
  the entire county, remit that amount to the district. Retailers 
  Taxpayers may not be required to use the allocation and reporting
  procedures in the collection of taxes under this section different
  from the procedures that retailers taxpayers use in the collection
  of other sales and use value added taxes under this chapter. An
  item, transaction, A supply of services and/or service property
  that is taxable in a county under a sales or use value added tax
  authorized by another section of this chapter is taxable under this
  section. An item, transaction, or service A supply of services
  and/or property that is not taxable in a county under a sales or use 
  value added tax authorized by another section of this chapter is not
  taxable under this section.
         (f)  If, in a county where a crime control and prevention
  district is composed of the whole county, a county sales and use 
  value added tax or a county sales and use value added tax rate
  increase for the purpose of financing a crime control and
  prevention district is approved, the county is responsible for
  distributing to the district that portion of the county sales and
  use value added tax revenue received from the comptroller that is to
  be used for the purposes of financing the crime control and
  prevention district. Not later than the 10th day after the date the
  county receives funds under this section from the comptroller, the
  county shall make the distribution in the proportion that the crime
  control and prevention portion of the tax rate bears to the total
  sales and use value added tax rate of the county. The amounts
  distributed to a crime control and prevention district are not
  considered to be sales and use value added tax revenue for the
  purpose of property tax reduction and computation of the county tax
  rate under Section 26.041, Tax Code.
         (g)  For purposes of the tax imposed under this section, a
  reference in this chapter to the county as the territory in which
  the tax or an incident of the tax applies means only the territory
  located in the crime control and prevention district, if that
  district is composed of an area less than an entire county.
         (h)  The comptroller may adopt rules and the county
  commissioners court may adopt orders to administer this section.
  Added by Acts 1989, 71st Leg., ch. 664, Sec. 2, eff. June 14, 1989.
  Amended by Acts 1993, 73rd Leg., ch. 864, Sec. 15, eff. June 18,
  1993; Acts 1997, 75th Leg., ch. 1248, Sec. 6, eff. June 20, 1997;
  Acts 1999, 76th Leg., ch. 1467, Sec. 2.70, eff. Oct. 1, 1999.
  SUBCHAPTER C. COMPUTATION OF TAXES
         Sec. 323.201.  COMPUTATION OF SALES VALUE ADDED TAXES. (a)
  Each retailer taxpayer in a county that has adopted the tax
  authorized by this chapter shall add the sales value added tax
  imposed by this chapter and by Chapter 151 220, plus any other
  applicable sales value added tax, to the sales supply price, and the
  sum of the taxes is a part of the price, a debt of the purchaser 
  customer to the retailer taxpayer until paid, and recoverable at
  law in the same manner as the purchase supply price.
         (b)  The amount of the total tax is computed by multiplying
  the combined applicable tax rates by the amount of the sales supply
  price. If the product results in a fraction of a cent less than
  one-half of one cent, the fraction of a cent is not collected. If
  the fraction of a cent is one-half of one cent or more, the fraction
  shall be collected as one cent.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Sec.   323.202.     METHOD OF REPORTING: RETAILERS HAVING SALES BELOW
  TAXABLE AMOUNT. The exclusion provided by Section 151.411 applies
  to a retailer under this chapter 50 percent of whose receipts from
  the sales of taxable items comes from individual transactions in
  which the sales price is an amount on which no tax is produced from
  the combined state and local taxes.
         Added by Acts 1987, 70th Leg., ch. 191,
         Sec. 323.202.  REPEALED.
         Sec. 323.203.  REPEALED
  Sec. 1, eff. Sept. 1, 1987.
  For expiration of Subsections (c-2) and (c-3), see Subsection
  (c-3).
  Sec.   323.203.     CONSUMMATION OF SALE. (a) A sale of a taxable item
  occurs within the county in which the sale is consummated. A sale
  is consummated as provided by this section regardless of the place
  where transfer of title or possession occurs.
  (b)     If a retailer has only one place of business in this state, all
  of the retailer's retail sales of taxable items are consummated at
  that place of business except as provided by Subsection (e).
  (c)     If a retailer has more than one place of business in this
  state, each sale of each taxable item by the retailer is consummated
  at the place of business of the retailer in this state where the
  retailer first receives the order, provided that the order is
  placed in person by the purchaser or lessee of the taxable item at
  the place of business of the retailer in this state where the
  retailer first receives the order.
  (c-1)     If the retailer has more than one place of business in this
  state and Subsection (c) does not apply, the sale is consummated at
  the place of business of the retailer in this state:
  (1)     from which the retailer ships or delivers the item, if the
  retailer ships or delivers the item to a point designated by the
  purchaser or lessee; or
  (2)     where the purchaser or lessee takes possession of and removes
  the item, if the purchaser or lessee takes possession of and removes
  the item from a place of business of the retailer.
  Text of subsection effective until September 01, 2014
  (c-2)     Subsection (c) does not apply if:
  (1)     the taxable item is shipped or delivered from a warehouse:
  (A)     that is a place of business of the retailer;
  (B)     in relation to which the retailer has an economic development
  agreement with:
  (i)     the county in which the warehouse is located that was entered
  into under Chapter 381, Local Government Code, before January 1,
  2009; or
  (ii)     the municipality in which the warehouse is located that was
  entered into under Chapter 380, 504, or 505, Local Government Code,
  or a predecessor statute, before January 1, 2009; and
  (C)     in relation to which the county provides information relating
  to the economic development agreement as required by Subsection
  (c-3) by the deadline prescribed by that subsection, or, if
  appropriate, the municipality complies with Section 321.203(c-3)
  by the deadline prescribed by that section; and
  (2)     the place of business of the retailer at which the retailer
  first receives the order in the manner described by Subsection (c)
  is a retail outlet identified in the information required by
  Subsection (c-3) or Section 321.203(c-3) as being served by the
  warehouse on January 1, 2009.
  (c-3)     Not later than September 1, 2009, a county that has entered
  into an economic development agreement described by Subsection
  (c-2) shall send to the comptroller information prescribed by the
  comptroller relating to the agreement that identifies each
  warehouse subject to the agreement and each retail outlet that, on
  January 1, 2009, was served by that warehouse.   The comptroller
  shall prescribe the manner in which the information must be
  provided.   The provision of information to the comptroller under
  this subsection does not affect whether information described by
  this subsection is confidential or excepted from required public
  disclosure.   This subsection and Subsection (c-2) expire September
  1, 2014.
  (d)     If the retailer has more than one place of business in this
  state and Subsections (c) and (c-1) do not apply, the sale is
  consummated at:
  (1)     the place of business of the retailer in this state where the
  order is received; or
  (2)     if the order is not received at a place of business of the
  retailer, the place of business from which the retailer's agent or
  employee who took the order operates.
  (e)     A sale of a taxable item is consummated at the location in this
  state to which the item is shipped or delivered or at which
  possession is taken by the customer if transfer of possession of the
  item occurs at, or shipment or delivery of the item originates from,
  a location in this state other than a place of business of the
  retailer and if:
  (1)     the retailer is an itinerant vendor who has no place of
  business in this state;
  (2)     the retailer's place of business where the purchase order is
  initially received or from which the retailer's agent or employee
  who took the order operates is outside this state; or
  (3)     the purchaser places the order directly with the retailer's
  supplier and the item is shipped or delivered directly to the
  purchaser by the supplier.
  (f)     The sale of natural gas and electricity is consummated at the
  point of delivery to the consumer.
  (g)     The sale of mobile telecommunications services is consummated
  in accordance with Section 151.061.
  (g-1)     The sale of telecommunications services sold based on a
  price that is measured by individual calls is consummated at the
  location where the call originates and terminates or the location
  where the call either originates or terminates and at which the
  service address is also located.
  (g-2)     Except as provided by Subsection (g-3), the sale of
  telecommunications services sold on a basis other than on a
  call-by-call basis is consummated at the location of the customer's
  place of primary use.
  (g-3)     A sale of post-paid calling services is consummated at the
  location of the origination point of the telecommunications signal
  as first identified by the seller's telecommunications system or by
  information received by the seller from the seller's service
  provider if the system used to transport the signal is not that of
  the seller.
  (h)     The sale of an amusement service is consummated in the county
  in which the performance or other delivery of the service takes
  place.
  (i)     If a purchaser who has given a resale certificate makes any use
  of a taxable item that subjects the taxable item to the sales tax
  under the provisions of Section 151.154, the use or other
  consumption of the taxable item that subjected the taxable item to
  the tax is consummated at the place where the taxable item is stored
  or kept at the time of or just before the use or consumption.
  (j)     The sale of services delivered through a cable system is
  consummated at the point of delivery to the consumer.
  (k)     The sale of garbage or other solid waste collection or removal
  service is consummated at the location at which the garbage or other
  solid waste is located when its collection or removal begins.
  (l)     Repealed by Acts 2007, 80th Leg., R.S., Ch. 1266, Sec. 15(5),
  eff. September 1, 2007.
  (m)     A sale of a service described by Section 151.0047 to remodel,
  repair, or restore nonresidential real property is consummated at
  the location of the job site.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.22(b), eff. Aug. 28,
  1989; Acts 1989, 71st Leg., ch. 810, Sec. 2, eff. Oct. 1, 1989;
  Acts 1991, 72nd Leg., ch. 705, Sec. 33, eff. Sept. 1, 1991; Acts
  2001, 77th Leg., ch. 370, Sec. 3, eff. Aug. 1, 2002; Acts 2003, 78th
  Leg., ch. 209, Sec. 58, eff. Oct. 1, 2003; Acts 2003, 78th Leg., ch.
  1310, Sec. 118, eff. July 1, 2004.
  Amended by:
  Acts 2007, 80th Leg., R.S., Ch. , Sec. 13, eff. September 1, 2007.
  Acts 2007, 80th Leg., R.S., Ch. , Sec. 15(5), eff. September 1,
  2007.
  Acts 2009, 81st Leg., R.S., Ch. , Sec. 8, eff. June 19, 2009.
         Sec. 323.204.  323.204. COMPUTATION OF USE TAX. In each
  county that has adopted the taxes authorized by this chapter, the
  tax imposed by Section 323.104, by other applicable local taxes,
  and by Subchapter D, Chapter 151, 220, are added together to form a
  single combined tax rate, except only the rate of the county tax is
  used in a situation described by Section 323.205(b)..
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
         Sec. 323.205.  REPEALED.
  Sec. 323.205.  USE TAX: 206. COUNTY IN WHICH USE OCCURS. (a) In
  determining the incidence of the use TAX INAPPLICABLE WHEN NO STATE
  TAX. The value added tax authorized by this chapter, the name of
  the county adopting the tax is substituted in Subchapter D, Chapter
  151, for "this state" where those words are used to designate the
  taxing entity or delimit the tax imposed. However, the excise tax
  authorized by this chapter on the use, storage, or consumption does
  not apply to the supply of a taxable item does not apply if the
  taxable item is first used, stored, or consumed in a county that has
  not adopted the taxes authorized by this chapter.
  (b)     If a sale of a taxable item is consummated in this state but
  not within a county that has adopted the taxes authorized by this
  chapter and the taxable item is shipped directly, or brought by the
  purchaser or lessee directly, into a county that has adopted the
  taxes authorized by this chapter, the taxable item is subject to the
  county's use tax. The use is considered to be consummated at the
  location where the item is first stored, used, or consumed after the
  intrastate transit has ceased.
  (c)     If a taxable item is shipped from outside this state to a
  customer within this state and the use of the taxable item is
  consummated within a county that has adopted the tax authorized by
  this chapter, the taxable item is subject to a county's use tax and
  not its sales tax. A use is considered to be consummated at the
  first point in this state where the taxable item is stored, used, or
  consumed after the interstate transit has ceased. A taxable item
  delivered to a point in this state is presumed to be for storage,
  use, or consumption at that point until the contrary is
  established.
  (d)     The holder of a direct payment permit issued under Chapter 151
  who becomes liable for the use tax under this chapter by reason of
  the storage, use, or consumption of a taxable item purchased in this
  state under a direct payment exemption certificate shall allocate
  the tax to the county in which the item was first removed from the
  permit holder's storage, or if not stored, the place at which the
  item was first used or consumed by the permit holder after
  transportation. In this subsection an item is not considered to
  have been stored, used, or consumed because of a temporary delay or
  interruption necessary and incidental to its transportation or
  further fabrication, processing, or assembling within this state
  for delivery to the permit holder. A charge for fabrication,
  processing, or further assembly in a county that has adopted the tax
  under this chapter shall be subject to the county use tax.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 34, eff. Sept. 1,
  1991.
         Sec.   323.206.     COUNTY TAX INAPPLICABLE WHEN NO STATE TAX;
  EXCEPTIONS. (a) The sales tax authorized by this chapter does not
  apply to the sale of a taxable item service or supply unless the
  sales value added tax imposed by Subchapter C, Chapter 151 220, also
  applies to the sale.
  (b)     The excise tax authorized by this chapter on the use, storage,
  or consumption of a taxable item does not apply to the use, storage,
  or consumption of an item unless the tax imposed by Subchapter D,
  Chapter 151, also applies to the use, storage, or consumption.
  (c)     Subsections (a) and (b) do not apply to the taxes authorized by
  this chapter on the sale, production, distribution, lease, or
  rental of, and the use, storage, or consumption of gas and
  electricity for residential use.
  (d)     Subsection (b) does not apply to the application of the tax in
  a situation described by Section 323.205(b).
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 35, eff. Sept. 1,
  1991.
         Sec. 323.207.
         Sec. 323.207.  STATE EXEMPTIONS APPLICABLE. The exemptions
  and exclusions provided by Subchapter H, Subchapters D and E of
  Chapter 151 220, apply to the taxes authorized by this chapter,
  except as provided by Section 151.317(b)..
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Sec.   323.208.     TELECOMMUNICATIONS EXEMPTION. (a) There are
  exempted from the taxes imposed under this chapter the sale within
  the county of telecommunications services unless the application of
  the exemption is repealed under this section. A county may not
  repeal the application of this exemption as it applies to
  interstate long-distance telecommunications services, but if a
  county has repealed the exemption before the effective date of Part
  4, Article 1, H.B. No. 61, Acts of the 70th Legislature, 2nd Called
  Session, 1987, interstate long-distance telecommunications
  services in that county are not subject to taxes imposed under this
  chapter.
  (b)     The commissioners court of a county by a majority vote may
  repeal the application of the exemption provided by Subsection (a)
  for telecommunications services sold within the county.
  (c)     A county that has repealed the application of the exemption
  may in the same manner reinstate the exemption.
  (d)     A vote of the commissioners court repealing the application of
  or reinstating the exemption must be entered in the minutes of the
  court. The county judge shall send to the comptroller by United
  States certified or registered mail a copy of each order adopted
  under this section. The repeal of the application of the exemption
  or a reinstated exemption takes effect within the county on the
  first day of the first calendar quarter after the expiration of the
  first complete calendar quarter after the date on which the
  comptroller receives notification of the order.
  Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
  Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec.
  35.
  Sec.   323.209.     TRANSITION EXEMPTION. (a) The receipts from the
  sale, use, or rental of and the storage, use, or consumption of
  taxable items in this state are exempt from the tax imposed by a
  county under this chapter if the items are used:
  (1)