Texas Senate Bill SB1798

Texas 2011 - 82nd Regular

• Out of Senate Committee: 4/21/11
• Introduced: 3/11/11
• Voted on by Senate: 4/29/11
• Refer: 3/23/11
• Report Pass: 4/21/11
• Engrossed: 4/29/11
• Refer: 5/2/11

Caption

Relating to retailers engaged in business in this state for purposes of sales and use taxes.

Impact

The amendments proposed in SB1798 would have a substantial impact on the standards by which retailers are assessed for tax obligations in Texas. By widening the scope of who qualifies as a seller, the bill aims to enhance the collection of sales taxes, especially from online and multi-state retailers who may previously not have been obligated to collect taxes due to unclear definitions. This shift may increase state tax revenues significantly while ensuring a level playing field for local businesses.

Summary

SB1798 is aimed at clarifying and expanding the definitions related to retailers engaged in business within Texas for the purposes of sales and use taxes. The bill amends existing provisions in the Texas Tax Code to specify who qualifies as a 'seller' or 'retailer,' including various types of sellers such as those making more than two sales of taxable items in a year, and those involved in systematic solicitation of sales via multiple mediums. A notable addition is the introduction of a rebuttable presumption that members of an affiliated group are engaged in business within the state if one member meets the criteria.

Contention

As with many tax-related bills, SB1798 has sparked discussions regarding the potential burdens on small businesses. Supporters argue that clearer definitions and accountability requirements will bolster state revenue and support fair competition among retailers. Conversely, some stakeholders worry that additional tax obligations may disproportionately affect smaller retailers or new market entrants who may not have the resources to comply with added administrative demands. Concerns have also been raised regarding how these changes might be enforced across businesses that operate in multiple jurisdictions.

Additional_notes

The bill’s effective date is set for January 1, 2012, meaning businesses will need to prepare for compliance by that date. The legislation seeks to modernize tax code definitions in response to evolving retail practices, particularly in light of increases in e-commerce transactions.