87R7375 BEF-F
By: Shine H.B. No. 3538
A BILL TO BE ENTITLED
AN ACT
relating to local sales and use tax administration.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 321.002(a)(3), Tax Code, is amended to
read as follows:
(3)(A) "Place of business of the retailer" means an
established outlet, office, or location operated by the retailer,
or operated by the retailer's agent or employee, for the purpose of
receiving orders, regardless of the method by which orders are
transmitted or received, for taxable items and includes any
location at which three or more orders are received by the retailer
during a calendar year. A warehouse, storage yard, or
manufacturing plant is not a "place of business of the retailer"
unless at least three orders are received by the retailer during the
calendar year at the warehouse, storage yard, or manufacturing
plant.
(B) An outlet, office, facility, or any location
that contracts with a retail or commercial business to process for
that business invoices, purchase orders, bills of lading, or other
equivalent records onto which sales tax is added, including an
office operated for the purpose of buying and selling taxable goods
to be used or consumed by the retail or commercial business, is not
a "place of business of the retailer" if the comptroller determines
that the outlet, office, facility, or location functions or exists
to avoid the tax legally due under this chapter or exists solely to
rebate a portion of the tax imposed by this chapter to the
contracting business. An outlet, office, facility, or location
does not exist to avoid the tax legally due under this chapter or
solely to rebate a portion of the tax imposed by this chapter if the
outlet, office, facility, or location provides significant
business services, beyond processing invoices, to the contracting
business, including logistics management, purchasing, inventory
control, or other vital business services.
(C) Notwithstanding any other provision of this
subdivision, a kiosk is not a "place of business of the retailer."
In this subdivision, "kiosk" means a small stand-alone area or
structure that:
(i) is used solely to display merchandise
or to submit orders for taxable items from a data entry device, or
both;
(ii) is located entirely within a location
that is a place of business of another retailer, such as a
department store or shopping mall; and
(iii) at which taxable items are not
available for immediate delivery to a customer.
SECTION 2. Section 321.203, Tax Code, is amended by
amending Subsections (b) and (e-1) and adding Subsection (o) to
read as follows:
(b) If a retailer has only one place of business in this
state, all of the retailer's retail sales of taxable items,
regardless of the method by which orders for the taxable items are
transmitted or received, are consummated at that place of business
except as provided by Subsection (e) or (o).
(e-1) Notwithstanding any other provision of this section,
a sale of a taxable item made [by a marketplace seller] through a
marketplace as provided by Section 151.0242 is consummated at the
location in this state to which the item is shipped or delivered or
at which possession is taken by the purchaser.
(o) The sale of a taxable item purchased by the retailer
from a related entity, including a related entity acting as a
third-party drop shipper of taxable items, is consummated at the
place of business of the related entity where the order for the
taxable item is fulfilled or from which the taxable item is shipped
if:
(1) the retailer has only one place of business in this
state;
(2) the retailer purchases the taxable item from the
related entity using a resale certificate; and
(3) the order for the taxable item is fulfilled at, or
the taxable item is shipped from, a place of business of the related
entity in this state that would constitute a place of business of
the retailer if the related entity were the retailer.
SECTION 3. Section 323.203, Tax Code, is amended by
amending Subsections (b) and (e-1) and adding Subsection (n) to
read as follows:
(b) If a retailer has only one place of business in this
state, all of the retailer's retail sales of taxable items,
regardless of the method by which orders for the taxable items are
transmitted or received, are consummated at that place of business
except as provided by Subsection (e) or (n).
(e-1) Notwithstanding any other provision of this section,
a sale of a taxable item made [by a marketplace seller] through a
marketplace as provided by Section 151.0242 is consummated at the
location in this state to which the item is shipped or delivered or
at which possession is taken by the purchaser.
(n) The sale of a taxable item purchased by the retailer
from a related entity, including a related entity acting as a
third-party drop shipper of taxable items, is consummated at the
place of business of the related entity where the order for the
taxable item is fulfilled or from which the taxable item is shipped
if:
(1) the retailer has only one place of business in this
state;
(2) the retailer purchases the taxable item from the
related entity using a resale certificate; and
(3) the order for the taxable item is fulfilled at, or
the taxable item is shipped from, a place of business of the related
entity in this state that would constitute a place of business of
the retailer if the related entity were the retailer.
SECTION 4. 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 5. This Act takes effect January 1, 2022.