Texas House Bill HB3875

Texas 2017 - 85th Regular

Caption

Relating to establishing certain facilitators of sale, lease, or rental transactions as retailers engaged in business in this state for purposes of collection of the use tax.

Impact

If enacted, HB 3875 would significantly impact how sales tax is collected in Texas, especially for online sales. The bill stipulates that marketplace providers will be considered as making sales during the facilitation of these transactions, which could enhance compliance with the collection of use tax. By categorizing facilitators as engaged in business within the state, it clarifies their responsibilities regarding tax collection, aiming to close gaps that might allow for tax evasion in online sales scenarios.

Summary

House Bill 3875 seeks to amend the Texas Tax Code by redefining certain facilitators of sale, lease, or rental transactions as retailers engaged in business within the state. The specific section being amended pertains to the definitions of 'seller' and 'retailer', expanding the categories to include marketplace providers who facilitate transactions of tangible personal property between a retailer and a purchaser. This change aligns with the evolving landscape of commerce, particularly with the increasing reliance on online marketplaces for sales.

Contention

Notable points of contention surrounding HB 3875 may arise regarding the regulatory burden placed on marketplace providers. The change could be seen as an additional compliance requirement that smaller facilitators may struggle to meet, thus sparking debates over fairness and the treatment of smaller businesses in comparison to larger entities. Additionally, concerns could arise regarding the adequacy of provisions that limit liability for marketplace providers based on the information provided by retailers, adding complexity to the operational landscape of online sales.