By: Otto H.B. No. 2403
A BILL TO BE ENTITLED
AN ACT
relating to a retailer engaged in business in this state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 151.008(b), Tax Code, is amended to read
as follows:
(b) "Seller" and "retailer" include:
(1) a person in the business of making sales at auction
of tangible personal property owned by the person or by another;
(2) a person who makes more than two sales of taxable
items during a 12-month period, including sales made in the
capacity of an assignee for the benefit of creditors or receiver or
trustee in bankruptcy;
(3) a person regarded by the comptroller as a seller or
retailer under Section 151.024 of this code;
(4) a hotel, motel, or owner or lessor of an office or
residential building or development that contracts and pays for
telecommunications services for resale to guests or tenants; []
(5) a person who engages in regular or systematic
solicitation of sales of taxable items in this state by the
distribution of catalogs, periodicals, advertising flyers, or
other advertising, by means of print, radio, or television media,
or by mail, telegraphy, telephone, computer data base, cable,
optic, microwave, or other communication system for the purpose of
effecting sales of taxable items; and
(6) any person who, pursuant to an agreement with a
person with an ownership interest in or title to tangible personal
property, has been entrusted with the possession of any such
property and has the power, without further action on the part of
the person with an ownership interest in or title to the tangible
personal property, to sell, lease, or rent the property.
SECTION 2. Section 151.107, Tax Code, is amended by
amending Subsections (a) and (b) and adding Subsections (c), (d),
(e), and (f) to read as follows:
Sec. 151.107. RETAILER ENGAGED IN BUSINESS IN THIS STATE.
(a) For the purpose of this subchapter and in relation to the use
tax, a retailer is engaged in business in this state if the
retailer:
(1) maintains, occupies, or uses in this state
permanently, temporarily, directly, or indirectly or through a
subsidiary or agent by whatever name, an office, [place of]
distribution center, sales or sample room or place, warehouse,
storage place, or any other [place of] physical location where
business is conducted;
(2) has a representative, agent, salesman, canvasser,
or solicitor operating in this state under the authority of the
retailer or its subsidiary for the purpose of selling or delivering
or the taking of orders for a taxable item;
(3) derives [rentals] receipts from [a] the sale,
lease, or rental of tangible personal property situated in this
state;
(4) engages in regular or systematic solicitation of
sales of taxable items in this state by the distribution of
catalogs, periodicals, advertising flyers, or other advertising,
by means of print, radio, or television media, or by mail,
telegraphy, telephone, computer data base, cable, optic,
microwave, or other communication system for the purpose of
effecting sales of taxable items;
(5) solicits orders for taxable items by mail or
through other media and under federal law is subject to or permitted
to be made subject to the jurisdiction of this state for purposes of
collecting the taxes imposed by this chapter;
(6) has a franchisee or licensee operating under its
trade name if the franchisee or licensee is required to collect the
tax under this section;
(7) utilizes a website on a server in this state from
which digital goods are sold or delivered; [or]
(8) holds a substantial ownership interest in, or is
owned in whole or in substantial part by, a person who maintains a
location in this state from which business is conducted, if:
(A) the retailer sells the same or a
substantially similar line of products as the related retailer in
this state and does so under the same or substantially similar
business name; or,
(B) the facilities or employees of the related
person in this state are used to advertise, promote, or facilitate
sales by the retailer to consumers or to perform activities that are
intended to establish or maintain a marketplace in this state for
the retailer, including receiving or exchanging returned
merchandise;
(9) holds a substantial ownership interest in, or is
owned in whole or in substantial part by, a person that maintains a
distribution center, warehouse, or similar location in this state
that delivers property sold by the retailer to consumers; or
(10) [(7)] otherwise does business in this state.
(b) "Substantial ownership interest" as used in this
section means:
(1) at least 50 percent, directly or indirectly, of
the total combined voting power of all classes of stock of the
corporation, or at least 50 percent, directly or indirectly, of the
beneficial ownership interest in the voting stock of the
corporation;
(2) at least 50 percent, directly or indirectly, of
the capital or profits interest in the partnership;
(3) at least 50 percent, directly or indirectly, of
the capital or profits interest in the association;
(4) at least 50 percent, directly or indirectly, of
the current beneficial interest in the trust corpus or income;
(5) either at least 50 percent, directly or
indirectly, of the total membership interest of the limited
liability company or at least 50 percent, directly or indirectly,
of the beneficial ownership interest in the membership interest of
the limited liability company; or
(6) at least 50 percent, directly or indirectly, of
the capital or profits interest in the entity.
(c) "Ownership" as used in this section means, and includes
but is not limited to, both direct ownership and indirect ownership
through a parent, subsidiary, or affiliate.
(d) [(b)] Notwithstanding any other provision of law, a
broadcaster, printer, outdoor advertising firm, advertising
distributor, or publisher that broadcasts, publishes, displays, or
distributes paid commercial advertising in this state that is
intended to be disseminated primarily to consumers located in this
state and is only secondarily disseminated to bordering
jurisdictions, including advertising appearing exclusively in a
Texas edition or section of a national publication, is considered
for purposes of this section to be the agent of the person placing
the advertisement and that person placing the advertisement is
considered a retailer engaged in business in this state. The agency
relationship recognized by this subsection is for the sole purpose
of providing a presence in this state for the imposition of a tax on
out-of-state advertisers or sellers. The agent has no
responsibility to report, or liability to pay, a tax for the
out-of-state advertiser or seller and is not restricted by this
subchapter from accepting ads from out-of-state advertisers or
sellers.
SECTION 3. APPLICABILITY OF FORMER LAW. The change in law
made by the 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 those taxes.
SECTION 4. This Act takes effect January 1, 2012.