H.B. No. 2153
AN ACT
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.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The purpose of this Act is to provide an
optional, simplified means of computing the amount of local use tax
remote sellers are required to collect following the decision of
the United States Supreme Court in South Dakota v. Wayfair, Inc.,
138 S. Ct. 2080 (2018).
SECTION 2. Subchapter C, Chapter 151, Tax Code, is amended
by adding Section 151.0595 to read as follows:
Sec. 151.0595. SINGLE LOCAL TAX RATE FOR REMOTE SELLERS.
(a) In this section, "remote seller" means a seller whose only
activities in this state are described by Section 151.107(a)(4) or
(5).
(b) A remote seller required to collect and remit one or
more local use taxes in connection with a sale of a taxable item
made by the remote seller shall compute the amount to collect and
remit using:
(1) the combined rate of all applicable local use
taxes authorized or governed by Title 3; or
(2) at the remote seller's election, the single local
use tax rate published in the Texas Register as required by
Subsection (d).
(c) A remote seller who elects under Subsection (b)(2) to
use the single local use tax rate shall notify the comptroller of
the election before using that rate. The election applies to all
sales of taxable items made by the remote seller unless the remote
seller revokes the election by notifying the comptroller. Notice to
the comptroller under this subsection must be in the form and manner
provided by the comptroller.
(d) The single local use tax rate effective in a calendar
year is equal to the estimated average rate of local sales and use
taxes imposed in this state during the preceding state fiscal year,
as determined under Subsection (e). Before the beginning of a
calendar year, the comptroller shall publish in the Texas Register
notice of the single local use tax rate that will be in effect for
that calendar year.
(e) As soon as practicable after the end of a state fiscal
year, the comptroller shall determine the estimated average rate of
local sales and use taxes imposed in this state during the preceding
state fiscal year by:
(1) dividing the total amount of net local sales and
use taxes remitted to the comptroller under this section and Title 3
during that state fiscal year by the total amount of net state sales
and use taxes remitted to the comptroller under this chapter during
that state fiscal year;
(2) multiplying the amount computed under Subdivision
(1) by the rate provided by Section 151.051; and
(3) rounding the amount computed under Subdivision (2)
to the nearest .0025.
(f) Notwithstanding Section 111.104(b), a purchaser may
annually apply for a refund of any amount by which the amount of use
tax computed using the rate described by Subsection (b)(2) and paid
by the purchaser exceeds the amount the purchaser would have paid if
that tax had been computed using the rate described by Subsection
(b)(1). The comptroller may adopt rules regarding the procedure
and proof required for the refund.
(g) A person storing, using, or consuming in this state a
taxable item purchased from a remote seller is not liable for any
additional amount of local use tax authorized or governed by Title 3
if the remote seller elects under Subsection (b)(2) to use the
single local use tax rate and the person pays to the remote seller
the amount of local use tax computed on the purchase using the
single local use tax rate.
(h) The comptroller shall administer, collect, and enforce
local use taxes computed using the single local use tax rate.
(i) The comptroller shall apportion and distribute revenue
from local use taxes computed using the single local use tax rate as
provided by Section 403.107, Government Code.
(j) The comptroller may adopt rules to administer this
section.
SECTION 3. Section 403.107, Government Code, is reenacted
and amended to read as follows:
Sec. 403.107. SINGLE LOCAL USE TAXES COLLECTED BY REMOTE
SELLERS [SALES AND USE TAX FEES]. (a) The comptroller shall
deposit revenue remitted to the comptroller from taxes computed
using the single local use tax rate under Section 151.0595(b)(2)
[fees imposed under Section 151.059], Tax Code, in the state
treasury and shall keep records of the amount of money deposited
[collected] for each reporting period. Money deposited under this
subsection [Such fees] shall be held in trust for the benefit of
eligible taxing units, as determined under Subsection (b) [in the
suspense account of each eligible taxing unit]. The comptroller
shall distribute money held in trust [in the suspense accounts]
under this section to each eligible taxing unit in the amount and
manner provided by [federal law or] this section.
(b) A local taxing unit is an eligible taxing unit for
purposes of [to receive funds under] this section if it has adopted
a sales and use tax authorized or governed by Title 3, Tax Code
[under Chapter 321, Chapter 322, or Chapter 323, Tax Code, or has
adopted a local sales and use tax governed in part by any provision
of those chapters].
(c) Subject to Subsection (d), the [The] comptroller shall
transmit to each eligible taxing unit's treasurer, or to the
officer performing the functions of that office, on a monthly
[quarterly] basis, the taxing unit's share of money held in trust
under Subsection (a) [the fees remitted to the comptroller],
together with the pro rata share of any penalty or interest on
delinquent taxes computed using the single local use tax rate
[fees] that may be collected. Before transmitting the funds, the
comptroller shall deduct two percent of [the amount allocated to]
each taxing unit's share [unit] as a charge by the state for its
services under this section and deposit that amount into the state
treasury to the credit of the comptroller's operating fund.
Interest earned on all deposits made in the state treasury under
this section shall be credited to the general revenue fund.
(d) The comptroller shall retain [in the suspense account
for a taxing unit] a portion of each eligible [the] taxing unit's
share of money held in trust under Subsection (a) [the fees
collected], not to exceed five percent of the amount eligible to be
transmitted [remitted] to the taxing unit under Subsection (c).
From the amounts retained [in a taxing unit's suspense account],
the comptroller may make refunds for overpayments of taxes computed
using the single local use tax rate, make refunds to purchasers as
provided by Section 151.0595(f), Tax Code, and [to the account and
to] redeem dishonored checks and drafts deposited under Subsection
(a) [to the credit of the account].
(e) The [Unless another method is required by federal law,
the] comptroller shall compute for each calendar month [quarter]
the percentage of the total sales and use tax allocations made
pursuant to Title 3, [of the] Tax Code, including any local sales
and use taxes governed by any provision of Title 3, [of the] Tax
Code, to each eligible taxing unit. The comptroller shall
determine each eligible taxing unit's share of the money held in
trust from deposits under Subsection (a) for that month by applying
the percentage computed under this subsection for the eligible
taxing unit [and shall apply that percentage] to the total amount
held in trust from deposits for that month [fees collected under
Section 151.059, Tax Code, and allocated to eligible taxing units
in that quarter].
(f) The comptroller may combine an eligible taxing unit's
share of the money held in trust under Subsection (a) [fees remitted
or collected under Section 151.059, Tax Code, a suspense account
under this section, or an allocation made under this section] with
other money [trust or suspense accounts] held for that taxing unit
[or other allocations made to that taxing unit under Title 3 of the
Tax Code].
(g) The comptroller may adopt rules to administer this
section.
SECTION 4. Sections 151.059 and 151.107(c), Tax Code, as
added by Chapter 291 (H.B. 2215), Acts of the 71st Legislature,
Regular Session, 1989, are repealed.
SECTION 5. The changes in law made by this Act do not affect
tax liability accruing before the effective date of this Act. That
liability continues in effect as if this Act had not been enacted,
and the former law is continued in effect for the collection of
taxes due and for civil and criminal enforcement of the liability
for those taxes.
SECTION 6. (a) This Act does not require a remote seller,
as defined by Section 151.0595, Tax Code, as added by this Act, to
collect local use taxes on sales of taxable items made before
October 1, 2019.
(b) Notwithstanding Section 151.0595(d), Tax Code, as added
by this Act, the single local use tax rate in effect for the period
beginning October 1, 2019, and ending December 31, 2019, is 1.75
percent.
SECTION 7. This Act takes effect October 1, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2153 was passed by the House on April
11, 2019, by the following vote: Yeas 145, Nays 0, 2 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2153 was passed by the Senate on May
3, 2019, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor