Texas 2021 - 87th Regular

Texas Senate Bill SB1038 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	87R7697 CJC-F
2	2	By: Schwertner S.B. No. 1038
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the place of business of a retailer for purposes of
8	8	municipal sales and use taxes.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 321.002(a), Tax Code, is amended by
11	11	amending Subdivision (3) and adding Subdivision (4) to read as
12	12	follows:
13	13	(3)(A) "Place of business of the retailer" means an
14	14	established outlet, office, or location operated by the retailer or
15	15	the retailer's agent or employee for the purpose of receiving
16	16	orders for taxable items and includes any location at which three or
17	17	more orders are received by the retailer during a calendar year and
18	18	at which at least four primary selling activities occur. A
19	19	warehouse, storage yard, or manufacturing plant is not a "place of
20	20	business of the retailer" unless at least three orders are received
21	21	by the retailer during the calendar year and at least four primary
22	22	selling activities occur at the warehouse, storage yard, or
23	23	manufacturing plant.
24	24	(B) An outlet, office, facility, or any location
25	25	that contracts with a retail or commercial business to process for
26	26	that business invoices, purchase orders, bills of lading, or other
27	27	equivalent records onto which sales tax is added, including an
28	28	office operated for the purpose of buying and selling taxable goods
29	29	to be used or consumed by the retail or commercial business, is not
30	30	a "place of business of the retailer" if the comptroller determines
31	31	that the outlet, office, facility, or location functions or exists
32	32	to avoid the tax legally due under this chapter or exists solely to
33	33	rebate a portion of the tax imposed by this chapter to the
34	34	contracting business. An outlet, office, facility, or location
35	35	does not exist to avoid the tax legally due under this chapter or
36	36	solely to rebate a portion of the tax imposed by this chapter if the
37	37	outlet, office, facility, or location provides significant
38	38	business services, beyond processing invoices, to the contracting
39	39	business, including logistics management, purchasing, inventory
40	40	control, or other vital business services.
41	41	(C) Notwithstanding any other provision of this
42	42	subdivision, a kiosk is not a "place of business of the
43	43	retailer." In this subdivision, "kiosk" means a small stand-alone
44	44	area or structure that:
45	45	(i) is used solely to display merchandise
46	46	or to submit orders for taxable items from a data entry device, or
47	47	both;
48	48	(ii) is located entirely within a location
49	49	that is a place of business of another retailer, such as a
50	50	department store or shopping mall; and
51	51	(iii) at which taxable items are not
52	52	available for immediate delivery to a customer.
53	53	(4) "Primary selling activity" means:
54	54	(A) any of the following actions, if performed by
55	55	a retailer or the agent or employee of a retailer:
56	56	(i) exercising discretion and independent
57	57	authority to solicit customers on behalf of the retailer and to bind
58	58	the retailer to a sale;
59	59	(ii) taking an action that binds the
60	60	retailer to a sale, including accepting a purchase order or
61	61	submitting an offer to a buyer that is subject to the buyer's
62	62	unilateral acceptance;
63	63	(iii) receiving a payment or issuing an
64	64	invoice;
65	65	(iv) engaging in marketing and solicitation
66	66	activities on behalf of the retailer;
67	67	(v) procuring goods for sale by the
68	68	retailer;
69	69	(vi) receiving and accepting purchase
70	70	orders or, if the retailer's purchase orders are accepted,
71	71	processed, or fulfilled in another location, receiving and
72	72	accepting contracts and other documents;
73	73	(vii) transferring title to an item to a
74	74	buyer; or
75	75	(viii) displaying goods for sale to
76	76	prospective customers; or
77	77	(B) the use of a structure owned or leased by a
78	78	retailer to:
79	79	(i) store or otherwise hold the retailer's
80	80	inventory;
81	81	(ii) house the retailer's business
82	82	headquarters, meaning the location from which the retailer directs
83	83	or manages the retailer's business; or
84	84	(iii) provide office space for the
85	85	retailer's officers, executives, or other employees who have
86	86	authority to set prices and determine the terms of a sale.
87	87	SECTION 2. The change in law made by this Act does not
88	88	affect tax liability accruing before the effective date of this
89	89	Act. That liability continues in effect as if this Act had not been
90	90	enacted, and the former law is continued in effect for the
91	91	collection of taxes due and for civil and criminal enforcement of
92	92	the liability for those taxes.
93	93	SECTION 3. This Act takes effect September 1, 2021.