82R13652 T
By: Harper-Brown H.B. No. 2719
A BILL TO BE ENTITLED
AN ACT
relating to the clarification of the circumstances under which a
retailer is considered to be engaged in business in this state, and
the information required to be provided by certain retailers, for
purposes of the collection of sales and use taxes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 151.024, Tax Code, is amended to read as
follows:
Sec. 151.024. PERSONS WHO MAY BE REGARDED AS RETAILERS. (a)
If the comptroller determines that it is necessary for the
efficient administration of this chapter to regard a salesperson
[salesman], representative, peddler, or canvasser as the agent of a
dealer, distributor, supervisor, or employer under whom the person
[he] operates or from whom the person [he] obtains the tangible
personal property that the person [he] sells, whether or not the
sale is made in the person's [his] own behalf or for the dealer,
distributor, supervisor, or employer, the comptroller may so regard
the salesperson [salesman], representative, peddler, or canvasser,
and may regard the dealer, distributor, supervisor, or employer as
a retailer or seller for the purpose of this chapter.
(b) A dealer, distributor, supervisor, or employer may not
be regarded under this section as a retailer or seller for the
purpose of this chapter if the dealer, distributor, supervisor, or
employer directly or indirectly, or through a subsidiary,
affiliate, or agent by whatever name, maintains, occupies,
operates, or uses, permanently or temporarily, only:
(1) a fulfillment center as described by Section
151.107(i); or
(2) a computer server.
SECTION 2. Subchapter B, Chapter 151, Tax Code, is amended
by adding Section 151.028 to read as follows:
Sec. 151.028. INFORMATION NOT REQUIRED FROM CERTAIN
RETAILERS. The comptroller or any other official or agency of this
state may not require for purposes of this chapter a retailer that
is not engaged in business in this state to:
(1) file any report, statement, or other information
regarding purchases made by customers in this state; or
(2) send to a customer in this state any type of notice
regarding the customer's purchase.
SECTION 3. Section 151.107, Tax Code, is amended by
amending Subsection (a) and adding Subsections (f), (g), (h), and
(i) to read as follows:
(a) Except as otherwise provided by this section, for [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, sales or sample room or place, warehouse, storage
place, or any other place of business;
(2) has a representative, agent, salesperson
[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 from a lease 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; or
(7) otherwise does business in this state.
(f) A retailer whose physical presence in this state is
attributable to the maintenance, occupation, operation, or use by
the retailer indirectly, or through the retailer's subsidiary,
affiliate, or agent by whatever name, of an office, place of
distribution, sales or sample room or place, warehouse, storage
place, or any other place of business in this state is engaged in
business in this state as provided by Subsection (a)(1) only if:
(1) the place of business in this state is a physical
location that is open to the public for the sale of goods at retail;
and
(2) at least one of the following activities is
performed on the retailer's behalf at that place of business:
(A) promotion of the retailer's business, such as
distributing the retailer's coupons or compiling the retailer's
mailing list, except that making the retailer's catalog available
for use as a reference or providing the catalog to a customer in
this state at the customer's request is not considered promotion of
the business;
(B) acceptance of returns or exchanges of, or
credits for, merchandise purchased from or through the retailer;
(C) maintenance of telephone or Internet kiosks
that allow customers to access inventory and purchase merchandise
from or through the retailer; or
(D) acceptance or placement of customers' orders
with the retailer if a product is unavailable at the place of
business.
(g) Notwithstanding any other law, a retailer is not
considered to be engaged in business in this state if the retailer's
physical presence in this state is attributable to:
(1) the maintenance, occupation, operation, or use in
this state permanently, temporarily, directly, or indirectly or
through a subsidiary, affiliate, or agent by whatever name, of a
fulfillment center;
(2) the ownership of tangible personal property
located on the premises of a fulfillment center described by
Subdivision (1); or
(3) the maintenance, occupation, operation, or use in
this state permanently, temporarily, directly, or indirectly or
through a subsidiary, affiliate, or agent by whatever name, of a
computer server.
(h) For purposes of this section, a retailer and another
person are affiliates if:
(1) either the retailer or the other person has a
direct or indirect ownership interest in the other of more than 50
percent; or
(2) a third person, or a group of persons affiliated
with each other, has a direct or indirect ownership interest of more
than 50 percent in the retailer and more than 50 percent in the
other person.
(i) In this section, "fulfillment center" means an
establishment in this state at which shipments of tangible personal
property are processed for delivery to customers. The term does not
include an establishment at which retail sales of tangible personal
property are made to retail customers on more than 12 days per year
unless the establishment processes customer sales orders by mail,
telephone, or electronic means, also processes shipments of
tangible personal property to customers, and, of the goods sold by
or shipped through the establishment, the goods sold or shipped to
customers outside this state represent at least 75 percent of the
fair market value of the total goods sold by or shipped through the
establishment. Retail sales made inside an establishment to
employees working at the establishment are not considered in
determining the number of days per year on which sales are made to
retail customers or the value of goods sold by or shipped through an
establishment.
SECTION 4. Section 151.028, Tax Code, as added by this Act,
and Sections 151.024 and 151.107, Tax Code, as amended by this Act,
are a clarification of existing law and do not imply that the former
law may be construed as inconsistent with the law as amended by this
Act.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2011.