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Texas Senate Bill SB1713

Texas 2017 - 85th Regular

Texas Senate Bill SB1713 Compare Versions

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11 By: Uresti S.B. No. 1713
2+ (In the Senate - Filed March 9, 2017; March 22, 2017, read
3+ first time and referred to Committee on Finance; April 27, 2017,
4+ reported adversely, with favorable Committee Substitute by the
5+ following vote: Yeas 12, Nays 1; April 27, 2017, sent to printer.)
6+Click here to see the committee vote
7+ COMMITTEE SUBSTITUTE FOR S.B. No. 1713 By: Uresti
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410 A BILL TO BE ENTITLED
511 AN ACT
6- relating to a study on sales and use tax compliance.
12+ relating to the collection of, and notices and reports regarding,
13+ state sales and use taxes; providing an administrative penalty.
714 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8- SECTION 1. STUDY OF SALES AND USE TAX COMPLIANCE. (a) The
9- comptroller shall conduct a study of methods to increase compliance
10- with sales and use tax collection and payment requirements under
11- Chapter 151, Tax Code.
12- (b) The study must:
13- (1) consider various possible methods to increase
14- sales and use tax compliance, including:
15- (A) imposing registration or information
16- reporting requirements on persons who refer purchasers in this
17- state to out-of-state retailers;
18- (B) requiring retailers to notify purchasers of
19- use tax payment requirements; and
20- (C) imposing information reporting requirements
21- for retailers making sales subject to use tax;
22- (2) examine actions taken by other states to increase
23- sales and use tax compliance and the results of those actions;
24- (3) include the estimated fiscal impact to this state,
25- including to small local businesses in this state, of the potential
26- methods to increase sales and use tax compliance considered in the
27- study; and
28- (4) estimate the information technology costs to this
29- state associated with the potential methods to increase sales and
30- use tax compliance considered in the study.
31- (c) The comptroller shall consult with the office of the
32- attorney general regarding the constitutionality of the potential
33- methods to increase sales and use tax compliance considered in the
34- study. The comptroller shall indicate any possible constitutional
35- issues in the report of the results of the study.
36- (d) Not later than December 1, 2018, the comptroller shall
37- issue a written report of the results of the study under this
38- section, including recommendations for legislation to increase
39- compliance with sales and use tax collection and payment
40- requirements. The comptroller shall post the report on the
41- comptroller's Internet website and provide notice of the
42- availability of the report to the members of the legislature.
43- (e) This section expires January 1, 2019.
44- SECTION 2. EFFECTIVE DATE; CONTINGENCY. (a) Except as
45- provided by Subsection (b) of this section, this Act takes effect
46- September 1, 2017.
47- (b) This Act takes effect only if the 85th Legislature
48- appropriates money specifically for the purpose of implementing
49- this Act. If the legislature does not appropriate money
50- specifically for the purpose of implementing this Act, this Act has
51- no effect.
15+ SECTION 1. Section 151.008(b), Tax Code, is amended to read
16+ as follows:
17+ (b) "Seller" and "retailer" include:
18+ (1) a person in the business of making sales at auction
19+ of tangible personal property owned by the person or by another;
20+ (2) a person who makes more than two sales of taxable
21+ items during a 12-month period, including sales made in the
22+ capacity of an assignee for the benefit of creditors or receiver or
23+ trustee in bankruptcy;
24+ (3) a person regarded by the comptroller as a seller or
25+ retailer under Section 151.024;
26+ (4) a hotel, motel, or owner or lessor of an office or
27+ residential building or development that contracts and pays for
28+ telecommunications services for resale to guests or tenants;
29+ (5) a person who engages in regular or systematic
30+ solicitation of sales of taxable items in this state by the
31+ distribution of catalogs, periodicals, advertising flyers, or
32+ other advertising, by means of print, radio, or television media,
33+ or by mail, telegraphy, telephone, computer data base, cable,
34+ optic, microwave, or other communication system for the purpose of
35+ effecting sales of taxable items; [and]
36+ (6) a person who, under an agreement with another
37+ person, is:
38+ (A) entrusted with possession of tangible
39+ personal property with respect to which the other person has title
40+ or another ownership interest; and
41+ (B) authorized to sell, lease, or rent the
42+ property without additional action by the person having title to or
43+ another ownership interest in the property; and
44+ (7) a person who is a marketplace provider as provided
45+ by Section 151.013.
46+ SECTION 2. Subchapter A, Chapter 151, Tax Code, is amended
47+ by adding Section 151.013 to read as follows:
48+ Sec. 151.013. MARKETPLACE PROVIDERS AND MARKETPLACE
49+ SELLERS. (a) In this section:
50+ (1) "Marketplace provider" means a person who, under
51+ an agreement with a seller, facilitates the sale of a taxable item
52+ by the seller.
53+ (2) "Marketplace seller" means a person who has an
54+ agreement with a marketplace provider under which the marketplace
55+ provider will facilitate the sale of a taxable item by the person.
56+ (b) For purposes of this section:
57+ (1) a person facilitates the sale of a taxable item if:
58+ (A) the person provides the forum, including an
59+ Internet website or catalog, in which or by means of which the sale
60+ takes place or the offer of sale is accepted; and
61+ (B) the person or an affiliate of the person
62+ collects, or contracts with another person to collect, the amount
63+ paid by the purchaser to the seller; and
64+ (2) two persons are affiliated if:
65+ (A) one person has a direct or indirect ownership
66+ interest in the other person of more than five percent; or
67+ (B) another person or group of affiliated persons
68+ has a direct or indirect ownership interest in each of the two
69+ persons of more than five percent.
70+ (c) The facilitation of a sale by a marketplace provider
71+ that results in a sale by a marketplace seller is considered the
72+ making of a sale by the marketplace provider for purposes of
73+ Sections 151.008(a), 151.052, and 151.103 if:
74+ (1) the marketplace provider holds a permit issued
75+ under Subchapter F; or
76+ (2) the marketplace provider holds a registration
77+ under Section 151.106 and the marketplace seller does not hold a
78+ permit under Subchapter F.
79+ (d) Subject to Subsection (f), a marketplace provider is not
80+ subject to liability under Subchapter L for failing to collect and
81+ remit the appropriate amount of tax imposed on a sale if the
82+ marketplace provider can show that, in determining the amount, the
83+ marketplace provider relied exclusively on information provided by
84+ the marketplace seller. This subsection does not apply if the
85+ marketplace provider and the marketplace seller are affiliated.
86+ (e) Subject to Subsection (f), a marketplace seller is not
87+ required to collect and remit the tax imposed on a sale and is not
88+ subject to liability under Subchapter L for failing to collect and
89+ remit the appropriate amount of tax imposed on the sale if:
90+ (1) the sale is considered to be made by a marketplace
91+ provider under Subsection (c);
92+ (2) the marketplace seller enters into an agreement
93+ with the marketplace provider, as provided by comptroller rule,
94+ under which the marketplace provider is obligated to collect and
95+ remit the tax due on the sale; and
96+ (3) the marketplace seller can show that any failure
97+ by the marketplace provider to collect and remit the tax on the sale
98+ was not caused by the marketplace seller providing incorrect
99+ information to the marketplace provider.
100+ (f) A marketplace provider and marketplace seller that are
101+ affiliated are jointly and severally liable for any tax the
102+ marketplace provider fails to collect and remit that is imposed in
103+ connection with a sale of a taxable item by the marketplace seller
104+ that is facilitated by the marketplace provider.
105+ (g) Notwithstanding Subsection (a), a person described by
106+ Section 151.108(b) or (c) is not a marketplace provider or
107+ marketplace seller with respect to the activities described by
108+ Section 151.108(b) or (c).
109+ (h) The comptroller may adopt rules necessary to implement
110+ and administer this section, including rules establishing the
111+ requirements for a person to be considered a marketplace provider.
112+ SECTION 3. Chapter 151, Tax Code, is amended by adding
113+ Subchapter D-1 to read as follows:
114+ SUBCHAPTER D-1. NOTICE AND REPORT BY RETAILERS WHO DO NOT COLLECT
115+ USE TAX
116+ Sec. 151.121. APPLICABILITY. (a) This subchapter applies
117+ only to the sale of a taxable item for storage, use, or consumption
118+ in this state by a retailer who:
119+ (1) does not hold a permit under Subchapter F;
120+ (2) does not collect the use tax due from the purchaser
121+ under this chapter; and
122+ (3) in the previous calendar year had:
123+ (A) total receipts of more than $250,000 from the
124+ sale of taxable items for storage, use, or consumption in this
125+ state; or
126+ (B) at least 500 sales of taxable items for
127+ storage, use, or consumption in this state.
128+ (b) For purposes of Subsection (a), the sale of a taxable
129+ item delivered to a purchaser in this state is presumed to be the
130+ sale of a taxable item for storage, use, or consumption in this
131+ state.
132+ (c) This subchapter applies to a retailer regardless of
133+ whether the retailer has a physical presence in this state.
134+ Sec. 151.122. NOTICE IN CONNECTION WITH SALE. A retailer
135+ who makes a sale to which this subchapter applies shall provide
136+ written notice to the purchaser that use tax is due on certain
137+ purchases from the retailer and that the State of Texas requires the
138+ purchaser to file a tax report.
139+ Sec. 151.123. ANNUAL NOTICE TO PURCHASER. (a) Not later
140+ than January 31 of each year, a retailer shall provide to each
141+ person who made in the preceding calendar year one or more purchases
142+ to which this subchapter applies a written notice:
143+ (1) stating that the State of Texas requires the
144+ purchaser to file a tax report and pay use tax on certain purchases
145+ from the retailer;
146+ (2) including the total amount paid by the purchaser
147+ in connection with all sales to which this subchapter applies made
148+ in the preceding calendar year;
149+ (3) listing each sale to which this subchapter applies
150+ made to the purchaser in the preceding calendar year, including, if
151+ available:
152+ (A) the date of the sale;
153+ (B) the amount of the sale; and
154+ (C) whether the sale is exempted from the taxes
155+ imposed by this chapter, if known by the retailer; and
156+ (4) containing any other information the comptroller
157+ requires by rule.
158+ (b) A retailer shall send the notice required by Subsection
159+ (a) to each purchaser by first class mail and may not include the
160+ notice with any other shipment. The exterior of the mailing must
161+ include the name of the retailer and the phrase "Important Tax
162+ Document Enclosed."
163+ Sec. 151.124. ANNUAL STATEMENT TO COMPTROLLER. (a) The
164+ comptroller by rule may require a retailer to submit to the
165+ comptroller an annual statement describing all sales to which this
166+ subchapter applies made to each purchaser in a calendar year.
167+ (b) Rules under this section may prescribe the content,
168+ form, and format of a statement and the date the statement is due.
169+ Sec. 151.125. ADMINISTRATIVE PENALTY. (a) The
170+ comptroller may impose an administrative penalty on a retailer who
171+ fails to:
172+ (1) provide the notice required by Section 151.122 in
173+ connection with a sale, in an amount not to exceed $5 for each sale;
174+ (2) provide the notice required by Section 151.123 to
175+ a purchaser for a calendar year, in an amount not to exceed $10 for
176+ each purchaser each calendar year; or
177+ (3) submit information required by any rules adopted
178+ under Section 151.124 concerning sales made to a purchaser for a
179+ calendar year, in an amount not to exceed $10 for each purchaser
180+ each calendar year.
181+ (b) The amount of the penalty shall be based on:
182+ (1) the seriousness of the violation, including the
183+ nature, circumstances, extent, and gravity of the violation;
184+ (2) the economic harm caused by the violation;
185+ (3) the history of previous violations;
186+ (4) the amount necessary to deter a future violation;
187+ (5) efforts to correct the violation; and
188+ (6) any other matter that justice may require.
189+ (c) The enforcement of the penalty may be stayed during the
190+ time the order is under judicial review if the person pays the
191+ penalty to the clerk of the court or files a supersedeas bond with
192+ the court in the amount of the penalty. A person who cannot afford
193+ to pay the penalty or file the bond may stay the enforcement by
194+ filing an affidavit in the manner required by the Texas Rules of
195+ Civil Procedure for a party who cannot afford to file security for
196+ costs, subject to the right of the comptroller to contest the
197+ affidavit as provided by those rules.
198+ (d) An administrative penalty collected under this section
199+ may be appropriated only to the comptroller for the purpose of
200+ administering this subchapter.
201+ (e) A proceeding to impose the penalty is considered to be a
202+ contested case under Chapter 2001, Government Code.
203+ SECTION 4. The change in law made by this Act does not
204+ affect tax liability accruing before the effective date of this
205+ Act. That liability continues in effect as if this Act had not been
206+ enacted, and the former law is continued in effect for the
207+ collection of taxes due and for civil and criminal enforcement of
208+ the liability for those taxes.
209+ SECTION 5. Section 151.123, Tax Code, as added by this Act,
210+ applies only to sales made on or after the effective date of this
211+ Act. A retailer shall provide the initial notice required by that
212+ section not later than January 31, 2019.
213+ SECTION 6. This Act takes effect January 1, 2018.
214+ * * * * *