Texas 2023 - 88th Regular

Texas House Bill HB5089 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	88R21926 BEF-F
2	2	By: Meyer H.B. No. 5089
3	3	Substitute the following for H.B. No. 5089:
4	4	By: Button C.S.H.B. No. 5089
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the location at which certain sales are consummated for
10	10	purposes of local sales and use taxes.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 321.002(a)(3)(A), Tax Code, is amended
13	13	to read as follows:
14	14	(A) "Place of business of the retailer" means an
15	15	established outlet, office, or location operated by the retailer or
16	16	the retailer's agent or employee for the purpose of receiving
17	17	orders for taxable items and includes any location at which three or
18	18	more orders are received by the retailer during a calendar year.
19	19	The term does not include a computer server, Internet protocol
20	20	address, domain name, website, or software application. A
21	21	warehouse, storage yard, or manufacturing plant is not a "place of
22	22	business of the retailer" unless at least three orders are received
23	23	by the retailer during the calendar year at the warehouse, storage
24	24	yard, or manufacturing plant.
25	25	SECTION 2. Section 321.002(a), Tax Code, is amended by
26	26	amending Subdivision (1) and adding Subdivisions (1-a), (1-b), (4),
27	27	and (5) to read as follows:
28	28	(1) "Active economic development agreement" means an
29	29	agreement under Chapter 380, 381, 504, or 505, Local Government
30	30	Code, under which the local government made payments on or before
31	31	January 1, 2023, based on local sales and use tax collections.
32	32	(1-a) "Additional municipal sales and use tax" means
33	33	only the additional tax authorized by Section 321.101(b).
34	34	(1-b) "Affiliated group" has the meaning assigned by
35	35	Section 171.0001.
36	36	(4) "Principal business location" means the business
37	37	location where the decision makers of a business conduct the daily
38	38	affairs of the organization.
39	39	(5) "Small business" means a sales tax permit holder
40	40	that has:
41	41	(A) its principal business location in this
42	42	state;
43	43	(B) not more than 20 employees, including all
44	44	employees of each member of an affiliated group that includes the
45	45	permit holder; and
46	46	(C) total combined gross receipts from the sale
47	47	of tangible personal property and services in the preceding twelve
48	48	calendar months of less than $500,000, including the gross receipts
49	49	of each member of an affiliated group that includes the permit
50	50	holder.
51	51	SECTION 3. Section 321.203, Tax Code, is amended by
52	52	amending Subsections (b), (c), (c-1), (d), and (e-1) and adding
53	53	Subsections (o), (p), and (q) to read as follows:
54	54	(b) Except as otherwise provided by this section, the sale
55	55	of a taxable item by a small business is consummated at the
56	56	principal business location of the small business [If a retailer
57	57	has only one place of business in this state, all of the retailer's
58	58	retail sales of taxable items are consummated at that place of
59	59	business except as provided by Subsection (e)].
60	60	(c) Each [If a retailer has more than one place of business
61	61	in this state, each] sale of each taxable item by a [the] retailer
62	62	other than a small business is consummated at the place of business
63	63	of the retailer in this state where the retailer [first] receives
64	64	the order, provided that the order is placed in person by the
65	65	purchaser or lessee of the taxable item at the place of business of
66	66	the retailer in this state where the retailer [first] receives the
67	67	order.
68	68	(c-1) If Subsections (b) and (c) do [the retailer has more
69	69	than one place of business in this state and Subsection (c) does]
70	70	not apply, the sale is consummated at the location in this state to
71	71	which the item is shipped or delivered or at which possession is
72	72	taken by the purchaser [place of business of the retailer in this
73	73	state:
74	74	[(1) from which the retailer ships or delivers the
75	75	item, if the retailer ships or delivers the item to a point
76	76	designated by the purchaser or lessee; or
77	77	[(2) where the purchaser or lessee takes possession of
78	78	and removes the item, if the purchaser or lessee takes possession of
79	79	and removes the item from a place of business of the retailer].
80	80	(d) If [the retailer has more than one place of business in
81	81	this state and] Subsections (b), (c), and (c-1) do not apply, the
82	82	sale is consummated at:
83	83	(1) the place of business of the retailer in this state
84	84	where the order is received; or
85	85	(2) if the order is not received at a place of business
86	86	of the retailer, the place of business from which the retailer's
87	87	agent or employee who took the order operates.
88	88	(e-1) Except as otherwise provided by Subsection (f), (g),
89	89	(g-1), (g-2), (g-3), (h), (i), (j), (k), (m), [or] (n), (p), or (q),
90	90	a sale of a taxable item made by a marketplace seller through a
91	91	marketplace as provided by Section 151.0242 is consummated at the
92	92	location in this state to which the item is shipped or delivered or
93	93	at which possession is taken by the purchaser.
94	94	(o) An order is received at the location where all of the
95	95	information from the purchaser necessary to determine whether the
96	96	order can be accepted has been received by or on behalf of the
97	97	seller. The order is not received at a location where the order is
98	98	subsequently accepted, completed, or fulfilled.
99	99	(p) A retailer that has an active economic development
100	100	agreement with a municipality and has a single place of business in
101	101	this state that is within the municipality may elect to collect and
102	102	report the sales tax authorized by this chapter based on the
103	103	location of the retailer's single place of business. An election
104	104	under this subsection is binding on the retailer and the purchaser.
105	105	This subsection expires December 31, 2028.
106	106	(q) A retailer that has an active economic development
107	107	agreement with a municipality may elect to collect and report the
108	108	sales tax authorized by this chapter based on the location of the
109	109	retailer within the municipality from which an item is shipped
110	110	directly to the purchaser or the purchaser's designee. An election
111	111	under this subsection is binding on the retailer and the purchaser.
112	112	This subsection expires December 31, 2028.
113	113	SECTION 4. The heading to Section 323.203, Tax Code, is
114	114	amended to read as follows:
115	115	Sec. 323.203. CONSUMMATION OF SALE: CERTAIN PROVISIONS OF
116	116	MUNICIPAL SALES AND USE TAX APPLICABLE.
117	117	SECTION 5. Section 323.203(a), Tax Code, is amended to read
118	118	as follows:
119	119	(a) Sections 321.002 and 321.203 apply to the taxes
120	120	authorized by this chapter in the same manner as those sections
121	121	apply to the taxes authorized under Chapter 321 [A sale of a taxable
122	122	item occurs within the county in which the sale is consummated. A
123	123	sale is consummated as provided by this section regardless of the
124	124	place where transfer of title or possession occurs].
125	125	SECTION 6. The following laws are repealed:
126	126	(1) Section 3853.202(d), Special District Local Laws
127	127	Code; and
128	128	(2) Sections 323.203(b), (c), (c-1), (c-4), (c-5),
129	129	(d), (e), (e-1), (f), (g), (g-1), (g-2), (g-3), (h), (i), (j), (k),
130	130	and (m), Tax Code.
131	131	SECTION 7. The changes in law made by this Act do not affect
132	132	tax liability accruing before the effective date of this Act. That
133	133	liability continues in effect as if this Act had not been enacted,
134	134	and the former law is continued in effect for the collection of
135	135	taxes due and for civil and criminal enforcement of the liability
136	136	for those taxes.
137	137	SECTION 8. This Act takes effect January 1, 2024.