88R21926 BEF-F
 
  By: Meyer H.B. No. 5089
 
  Substitute the following for H.B. No. 5089:
 
  By:  Button C.S.H.B. No. 5089
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the location at which certain sales are consummated for
  purposes of local sales and use taxes.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 321.002(a)(3)(A), Tax Code, is amended
  to read as follows:
                     (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.  
  The term does not include a computer server, Internet protocol
  address, domain name, website, or software application. 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 at the warehouse, storage
  yard, or manufacturing plant.
         SECTION 2.  Section 321.002(a), Tax Code, is amended by
  amending Subdivision (1) and adding Subdivisions (1-a), (1-b), (4),
  and (5) to read as follows:
               (1)  "Active economic development agreement" means an
  agreement under Chapter 380, 381, 504, or 505, Local Government
  Code, under which the local government made payments on or before
  January 1, 2023, based on local sales and use tax collections.
               (1-a)  "Additional municipal sales and use tax" means
  only the additional tax authorized by Section 321.101(b).
               (1-b)  "Affiliated group" has the meaning assigned by
  Section 171.0001.
               (4)  "Principal business location" means the business
  location where the decision makers of a business conduct the daily
  affairs of the organization.
               (5)  "Small business" means a sales tax permit holder
  that has:
                     (A)  its principal business location in this
  state;
                     (B)  not more than 20 employees, including all
  employees of each member of an affiliated group that includes the
  permit holder; and
                     (C)  total combined gross receipts from the sale
  of tangible personal property and services in the preceding twelve
  calendar months of less than $500,000, including the gross receipts
  of each member of an affiliated group that includes the permit
  holder.
         SECTION 3.  Section 321.203, Tax Code, is amended by
  amending Subsections (b), (c), (c-1), (d), and (e-1) and adding
  Subsections (o), (p), and (q) to read as follows:
         (b)  Except as otherwise provided by this section, the sale
  of a taxable item by a small business is consummated at the
  principal business location of the small business [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)  Each [If a retailer has more than one place of business
  in this state, each] sale of each taxable item by a [the] retailer
  other than a small business 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 Subsections (b) and (c) do [the retailer has more
  than one place of business in this state and Subsection (c) does]
  not apply, the sale is consummated at the location in this state to
  which the item is shipped or delivered or at which possession is
  taken by the purchaser [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].
         (d)  If [the retailer has more than one place of business in
  this state and] Subsections (b), (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-1)  Except as otherwise provided by Subsection (f), (g),
  (g-1), (g-2), (g-3), (h), (i), (j), (k), (m), [or] (n), (p), or (q),
  a sale of a taxable item made by a marketplace seller through a
  marketplace as provided by Section 151.0242 is consummated at the
  location in this state to which the item is shipped or delivered or
  at which possession is taken by the purchaser.
         (o)  An order is received at the location where all of the
  information from the purchaser necessary to determine whether the
  order can be accepted has been received by or on behalf of the
  seller.  The order is not received at a location where the order is
  subsequently accepted, completed, or fulfilled.
         (p)  A retailer that has an active economic development
  agreement with a municipality and has a single place of business in
  this state that is within the municipality may elect to collect and
  report the sales tax authorized by this chapter based on the
  location of the retailer's single place of business. An election
  under this subsection is binding on the retailer and the purchaser.  
  This subsection expires December 31, 2028.
         (q)  A retailer that has an active economic development
  agreement with a municipality may elect to collect and report the
  sales tax authorized by this chapter based on the location of the
  retailer within the municipality from which an item is shipped
  directly to the purchaser or the purchaser's designee.  An election
  under this subsection is binding on the retailer and the purchaser.  
  This subsection expires December 31, 2028.
         SECTION 4.  The heading to Section 323.203, Tax Code, is
  amended to read as follows:
         Sec. 323.203.  CONSUMMATION OF SALE: CERTAIN PROVISIONS OF
  MUNICIPAL SALES AND USE TAX APPLICABLE.
         SECTION 5.  Section 323.203(a), Tax Code, is amended to read
  as follows:
         (a)  Sections 321.002 and 321.203 apply to the taxes
  authorized by this chapter in the same manner as those sections
  apply to the taxes authorized under Chapter 321 [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].
         SECTION 6.  The following laws are repealed:
               (1)  Section 3853.202(d), Special District Local Laws
  Code; and
               (2)  Sections 323.203(b), (c), (c-1), (c-4), (c-5),
  (d), (e), (e-1), (f), (g), (g-1), (g-2), (g-3), (h), (i), (j), (k),
  and (m), Tax Code.
         SECTION 7.  The changes in law made by this Act do 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 8.  This Act takes effect January 1, 2024.