Texas House Bill HB2153

Texas 2019 - 86th Regular

Caption

Relating to a single local use tax rate as an alternative to combined local use tax rates for computing the amount of local use taxes remote sellers are required to collect and to the allocation of tax revenue collected at that rate.

Impact

The implementation of HB 2153 will directly impact the revenue collection and distribution mechanisms related to local use taxes, significantly influencing how municipalities and other taxing units receive funding. The bill mandates that tax revenue generated through the single local rate will be held in trust for eligible taxing units, potentially leading to more predictable and equitable fiscal support for local governments. It also stipulates that the Comptroller shall manage the enforcement and distribution of these funds, reinforcing state oversight of local taxation practices.

Summary

House Bill 2153 introduces a single local use tax rate to simplify the process for remote sellers in Texas to collect and remit local use taxes. This initiative comes in the wake of the United States Supreme Court's ruling in South Dakota v. Wayfair, Inc., which expanded the ability of states to require out-of-state sellers to collect sales tax. The bill allows remote sellers the option to choose between using the combined rate of all local taxes or a newly established single local use tax rate, which will be determined annually by the Texas Comptroller.

Sentiment

Feedback from legislative discussions indicates general support for HB 2153 amongst proponents of streamlined taxation. Supporters argue that the bill will alleviate compliance burdens on remote sellers and enhance tax revenue stability. However, critics express concerns about the implications for local governments that rely on diverse revenue sources and fear the bill could limit local control over tax policies, potentially disadvantaging certain regions notably those with unique local taxation challenges.

Contention

The primary contention surrounding HB 2153 revolves around the balance of state versus local authority in taxation. While supporters see the bill as an opportunity to simplify tax compliance for remote sellers and to accelerate revenue collection, opponents caution that the shift to a single rate could curtail local governments' ability to tailor tax strategies that meet their specific needs. This ongoing debate highlights the complexities involved in tax law and local governance, revealing divergent priorities among stakeholders.