LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION April 2, 2011 TO: Honorable Steve Ogden, Chair, Senate Committee on Finance FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB1798 by West (Relating to a presumption that certain retailers are engaged in business in this state for the purpose of the use tax.), As Introduced No significant fiscal implication to the State is anticipated. The bill would amend Chapter 151 of the Tax Code, regarding the sales and use tax, to provide that a retailer is engaged in business in this state if the retailer enters into an agreement with a resident under which the resident receives a commission or other consideration for referring potential customers to the retailer, including by means of a link on a website, provided that during the previous four calendar quarters the retailer had at least $10,000 in sales to customers in this state who were referred to the retailer by residents under such an agreement. Major online retailers have canceled such agreements with residents of states that have enacted similar provisions, including North Carolina, Rhode Island, and Illinois, and have announced their intention to cancel such agreements with other states that enact similar provisions. Accordingly, no significant additional revenue can be anticipated as a result of enactment of this provision. The bill would take effect September 1, 2011. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies:304 Comptroller of Public Accounts LBB Staff: JOB, KK, SD
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
April 2, 2011
TO: Honorable Steve Ogden, Chair, Senate Committee on Finance FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB1798 by West (Relating to a presumption that certain retailers are engaged in business in this state for the purpose of the use tax.), As Introduced
TO: Honorable Steve Ogden, Chair, Senate Committee on Finance
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: SB1798 by West (Relating to a presumption that certain retailers are engaged in business in this state for the purpose of the use tax.), As Introduced
Honorable Steve Ogden, Chair, Senate Committee on Finance
Honorable Steve Ogden, Chair, Senate Committee on Finance
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
SB1798 by West (Relating to a presumption that certain retailers are engaged in business in this state for the purpose of the use tax.), As Introduced
SB1798 by West (Relating to a presumption that certain retailers are engaged in business in this state for the purpose of the use tax.), As Introduced
No significant fiscal implication to the State is anticipated.
No significant fiscal implication to the State is anticipated.
The bill would amend Chapter 151 of the Tax Code, regarding the sales and use tax, to provide that a retailer is engaged in business in this state if the retailer enters into an agreement with a resident under which the resident receives a commission or other consideration for referring potential customers to the retailer, including by means of a link on a website, provided that during the previous four calendar quarters the retailer had at least $10,000 in sales to customers in this state who were referred to the retailer by residents under such an agreement. Major online retailers have canceled such agreements with residents of states that have enacted similar provisions, including North Carolina, Rhode Island, and Illinois, and have announced their intention to cancel such agreements with other states that enact similar provisions. Accordingly, no significant additional revenue can be anticipated as a result of enactment of this provision. The bill would take effect September 1, 2011.
The bill would amend Chapter 151 of the Tax Code, regarding the sales and use tax, to provide that a retailer is engaged in business in this state if the retailer enters into an agreement with a resident under which the resident receives a commission or other consideration for referring potential customers to the retailer, including by means of a link on a website, provided that during the previous four calendar quarters the retailer had at least $10,000 in sales to customers in this state who were referred to the retailer by residents under such an agreement.
Major online retailers have canceled such agreements with residents of states that have enacted similar provisions, including North Carolina, Rhode Island, and Illinois, and have announced their intention to cancel such agreements with other states that enact similar provisions. Accordingly, no significant additional revenue can be anticipated as a result of enactment of this provision.
The bill would take effect September 1, 2011.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: JOB, KK, SD
JOB, KK, SD