87R7697 CJC-F
 
  By: Schwertner S.B. No. 1038
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the place of business of a retailer for purposes of
  municipal sales and use taxes.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 321.002(a), Tax Code, is amended by
  amending Subdivision (3) and adding Subdivision (4) to read as
  follows:
               (3)(A)  "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 and
  at which at least four primary selling activities occur.  A
  warehouse, storage yard, or manufacturing plant is not a "place of
  business of the retailer" unless at least three orders are received
  by the retailer during the calendar year and at least four primary
  selling activities occur at the warehouse, storage yard, or
  manufacturing plant.
                     (B)  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 legally due under this chapter or exists solely to
  rebate a portion of the tax imposed by this chapter to the
  contracting business.  An outlet, office, facility, or location
  does not exist to avoid the tax legally due under this chapter or
  solely to rebate a portion of the tax imposed by this chapter if the
  outlet, office, facility, or location provides significant
  business services, beyond processing invoices, to the contracting
  business, including logistics management, purchasing, inventory
  control, or other vital business services.
                     (C)  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:
                           (i)  is used solely to display merchandise
  or to submit orders for taxable items from a data entry device, or
  both;
                           (ii)  is located entirely within a location
  that is a place of business of another retailer, such as a
  department store or shopping mall; and
                           (iii)  at which taxable items are not
  available for immediate delivery to a customer.
               (4)  "Primary selling activity" means:
                     (A)  any of the following actions, if performed by
  a retailer or the agent or employee of a retailer:
                           (i)  exercising discretion and independent
  authority to solicit customers on behalf of the retailer and to bind
  the retailer to a sale;
                           (ii)  taking an action that binds the
  retailer to a sale, including accepting a purchase order or
  submitting an offer to a buyer that is subject to the buyer's
  unilateral acceptance;
                           (iii)  receiving a payment or issuing an
  invoice;
                           (iv)  engaging in marketing and solicitation
  activities on behalf of the retailer;
                           (v)  procuring goods for sale by the
  retailer;
                           (vi)  receiving and accepting purchase
  orders or, if the retailer's purchase orders are accepted,
  processed, or fulfilled in another location, receiving and
  accepting contracts and other documents;
                           (vii)  transferring title to an item to a
  buyer; or
                           (viii)  displaying goods for sale to
  prospective customers; or
                     (B)  the use of a structure owned or leased by a
  retailer to:
                           (i)  store or otherwise hold the retailer's
  inventory;
                           (ii)  house the retailer's business
  headquarters, meaning the location from which the retailer directs
  or manages the retailer's business; or
                           (iii)  provide office space for the
  retailer's officers, executives, or other employees who have
  authority to set prices and determine the terms of a sale.
         SECTION 2.  The change in law made by this Act does not
  affect tax liability accruing before the effective date of this
  Act. That liability continues in effect as if this Act had not been
  enacted, and the former law is continued in effect for the
  collection of taxes due and for civil and criminal enforcement of
  the liability for those taxes.
         SECTION 3.  This Act takes effect September 1, 2021.