By: West S.B. No. 1798
(In the Senate - Filed March 11, 2011; March 23, 2011, read
first time and referred to Committee on Finance; April 21, 2011,
reported adversely, with favorable Committee Substitute by the
following vote: Yeas 10, Nays 1; April 21, 2011, sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1798 By: West
A BILL TO BE ENTITLED
AN ACT
relating to retailers engaged in business in this state for
purposes of sales and use taxes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (b), Section 151.008, 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; [and]
(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) a person who, under an agreement with another
person, is:
(A) entrusted with possession of tangible
personal property with respect to which the other person has title
or another ownership interest; and
(B) authorized to sell, lease, or rent the
property, or otherwise permit access to or use of the property,
without additional action by the person having title to or another
ownership interest in the property.
SECTION 2. Section 151.107, Tax Code, is amended by
amending Subsection (a) and adding Subsections (a-1) and (d) to
read as follows:
(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, sales or sample room or place, warehouse, storage
place, or any other location where [place of] 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, fulfilling,
or delivering or the taking of orders for a taxable item;
(3) derives receipts or receives compensation
[rentals] from the sale, use, [a] 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; [or]
(7) holds a substantial ownership interest in, or is
owned in whole or substantial part by, a business entity that
maintains a location in this state at which business is conducted
and if:
(A) the retailer sells the same or a
substantially similar line of products as the business entity with
the location in this state and sells those products under a business
name that is the same or substantially similar to the business name
of the business entity with the location in this state; or
(B) the Texas facilities, Texas employees, or
other representatives of the business entity with the location in
this state are used to:
(i) advertise, promote, or facilitate sales
by the retailer to consumers; or
(ii) perform any other activity on behalf
of the retailer that is intended to establish or maintain a
marketplace for the retailer in this state, including receiving or
exchanging returned merchandise;
(8) holds a substantial ownership interest in, or is
owned in whole or substantial part by, a business entity that:
(A) maintains in this state a distribution house,
sales house, warehouse, or similar location at which business is
conducted; and
(B) delivers property sold by the retailer or an
affiliate of the retailer to consumers; or
(9) otherwise does business in this state.
(a-1) For the purpose of this subchapter and in relation to
the use tax, there is a rebuttable presumption that a retailer that
is part of an affiliated group is engaged in business in this state
if another member entity of the affiliated group is a retailer
engaged in business in this state. The presumption may be rebutted
by evidence that, during the preceding 12-month period, the other
member entity that is a retailer engaged in business in this state
did not engage in any activity described by this section on behalf
of the retailer to which the presumption applies.
(d) In this section:
(1) "Affiliated group" has the meaning assigned by
Section 171.0001.
(2) "Ownership" includes:
(A) direct ownership; and
(B) indirect ownership through a parent entity,
subsidiary, or affiliate.
(3) "Substantial" means, with respect to an ownership
interest, an interest in an entity that is at least equal to the
degree of ownership or equity interest that would require a
beneficial owner to file a disclosure statement under 15 U.S.C.
Section 78p or a successor to that statute.
SECTION 3. 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 4. This Act takes effect January 1, 2012.
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