34 Tex. Admin. Code § 3.334 - Local Sales and Use Taxes
(a) Definitions.
The following words and terms, when used in this section, shall have the
following meanings, unless the context clearly indicates otherwise.
(1) Cable system--The system through which a
cable service provider delivers cable television or bundled cable service, as
those terms are defined in §
3.313 of this title (relating to
Cable Television Service and Bundled Cable Service).
(2) City--An incorporated city, municipality,
town, or village.
(3) City sales
and use tax--The tax authorized under Tax Code, §
321.101(a),
including the additional municipal sales and use tax authorized under Tax Code,
§
321.101(b),
the municipal sales and use tax for street maintenance authorized under Tax
Code, §
327.003, the Type A
Development Corporation sales and use tax authorized under Local Government
Code, §
504.251, the
Type B Development Corporation sales and use tax authorized under Local
Government Code, §
505.251, a
sports and community venue project sales and use tax adopted by a city under
Local Government Code, §
334.081, and a
municipal development corporation sales and use tax adopted by a city under
Local Government Code, §
379A.081. The
term does not include the fire control, prevention, and emergency medical
services district sales and use tax authorized under Tax Code, §
321.106, or the municipal
crime control and prevention district sales and use tax authorized under Tax
Code, §
321.108.
(4) Comptroller's website--The comptroller's
website concerning local taxes located at:
https://comptroller.texas.gov/taxes/sales/.
(5) County sales and use tax--The tax
authorized under Tax Code, §
323.101, including a sports
and community venue project sales and use tax adopted by a county under Local
Government Code, §
334.081. The
term does not include the county health services sales and use tax authorized
under Tax Code, §
324.021, the county landfill
and criminal detention center sales and use tax authorized under Tax Code,
§
325.021, or the crime
control and prevention district sales and use tax authorized under Tax Code,
§
323.105.
(6) Drop shipment--A transaction in which an
order is received by a seller at one location, but the item purchased is
shipped by the seller from another location, or is shipped by the seller's
third-party supplier, directly to a location designated by the
purchaser.
(7) Engaged in
business--This term has the meaning given in §
3.286 of this title (relating to
Seller's and Purchaser's Responsibilities).
(8) Extraterritorial jurisdiction--An
unincorporated area that is contiguous to the corporate boundaries of a city as
defined in Local Government Code, §
42.021.
(9) Fulfill--To complete an order by
transferring possession of a taxable item to a purchaser, or to ship or deliver
a taxable item to a location designated by the purchaser. The term does not
include receiving or tracking an order, determining shipping costs, managing
inventory, or other activities that do not involve the transfer, shipment, or
delivery of a taxable item to the purchaser or a location designated by the
purchaser.
(10) Independently owned
and operated business--A self-controlling entity that is not a subsidiary of
another entity or otherwise subject to control by another entity, and that is
not publicly traded.
(11) Itinerant
vendor--A seller who travels to various locations for the purpose of receiving
orders and making sales of taxable items and who has no place of business in
this state. A person who sells items through vending machines is also an
itinerant vendor. A salesperson that operates out of a place of business in
this state is not an itinerant vendor.
(12) Kiosk--A small stand-alone area or
structure:
(A) that is used solely to display
merchandise or to submit orders for taxable items from a data entry device, or
both;
(B) that is located entirely
within a location that is a place of business of another seller, such as a
department store or shopping mall; and
(C) at which taxable items are not available
for immediate delivery to a purchaser.
(13) Local taxes--Sales and use taxes imposed
by any local taxing jurisdiction.
(14) Local taxing jurisdiction--Any of the
following:
(A) a city that imposes sales and
use tax as provided under paragraph (3) of this subsection;
(B) a county that imposes sales and use tax
as provided under paragraph (5) of this subsection;
(C) a special purpose district created under
the Special District Local Laws Code or other provisions of Texas law that is
authorized to impose sales and use tax by the Tax Code or other provisions of
Texas law and as governed by the provisions of Tax Code, Chapters 321 or 323
and other provisions of Texas law; or
(D) a transit authority that imposes sales
and use tax as authorized by Transportation Code, Chapters, 451, 452, 453, 457,
or 460 and governed by the provisions of Tax Code, Chapter, 322.
(15) Marketplace provider--This
term has the meaning given in §
3.286 of this title.
(16) Micro-business--A legal entity,
including a corporation, partnership, or sole proprietorship, that:
(A) is formed for the purpose of making a
profit;
(B) is independently owned
and operated; and
(C) has not more
than 20 employees.
(17)
Order placed in person--An order placed by a purchaser with the seller while
physically present at the seller's place of business regardless of how the
seller subsequently enters the order.
(18) Place of business of the seller -
general definition--A place of business of the seller must be an established
outlet, office, or location operated by a seller for the purpose of receiving
orders for taxable items from persons other than employees, independent
contractors, and natural persons affiliated with the seller. An "established
outlet, office, or location" usually requires staffing by one or more sales
personnel. The term does not include a computer server, Internet protocol
address, domain name, website, or software application. The "purpose" element
of the definition may be established by proof that the sales personnel of the
seller receive three or more orders for taxable items at the facility during
the calendar year. Additional criteria for determining when a location is a
place of business of the seller are provided in subsection (b) of this section
for distribution centers, manufacturing plants, storage yards, warehouses and
similar facilities; kiosks; and purchasing offices. 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 seller if the comptroller determines that the outlet, office, facility, or
location functions or exists to avoid the tax legally due under Tax Code,
Chapters 321, 322, and 323 or exists solely to rebate a portion of the tax
imposed by those chapters to the contracting business. An outlet, office,
facility, or location does not exist to avoid the tax legally due under Tax
Code, Chapters 321, 322, and 323 or solely to rebate a portion of the tax
imposed by those chapters 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.
(19)
Purchasing office--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.
(20) Remote Seller--As
defined in §
3.286 of this title, a remote
seller is a seller engaged in business in this state whose only activity in the
state is:
(A) engaging in regular or
systematic solicitation of sales of taxable items in this state by the
distribution of catalogs, periodicals, advertising flyers, or other
advertising, by means of print, radio, or television media, or by mail,
telegraphy, telephone, computer data base, cable, optic, microwave, or other
communication system for the purpose of effecting sales of taxable items;
or
(B) soliciting orders for
taxable items by mail or through other media including the Internet or other
media that may be developed in the future.
(21) Seller--This term has the meaning given
in §
3.286 of this title and also
refers to any agent or employee of the seller.
(22) Small business--A legal entity,
including a corporation, partnership, or sole proprietorship, that:
(A) is formed for the purpose of making a
profit;
(B) is independently owned
and operated; and
(C) has fewer
than 100 employees or less than $6 million in annual gross receipts.
(23) Special purpose district--A
local governmental entity authorized by the Texas legislature for a specific
purpose, such as crime control, a local library, emergency services, county
health services, or a county landfill and criminal detention center.
(24) Storage--This term has the meaning given
in §
3.346 of this title (relating to
Use Tax).
(25) Temporary place of
business of the seller--A location operated by a seller for a limited period of
time for the purpose of selling and receiving orders for taxable items and
where the seller has inventory available for immediate delivery to a purchaser.
For example, a person who rents a booth at a weekend craft fair or art show to
sell and take orders for jewelry, or a person who maintains a facility at a job
site to rent tools and equipment to a contractor during the construction of
real property, has established a temporary place of business. A temporary place
of business of the seller includes a sale outside of a distribution center,
manufacturing plant, storage yard, warehouse, or similar facility of the seller
in a parking lot or similar space sharing the same physical address as the
facility but not within the walls of the facility.
(26) Transit authority--A metropolitan rapid
transit authority (MTA), advanced transportation district (ATD), regional or
subregional transportation authority (RTA), city transit department (CTD),
county transit authority (CTA), regional mobility authority (RMA) or
coordinated county transportation authority created under Transportation Code,
Chapters 370, 451, 452, 453, 457, or 460.
(27) Two percent cap--A reference to the
general rule that, except as otherwise provided by Texas law and as explained
in this section, a seller cannot collect, and a purchaser is not obligated to
pay, more than 2.0% of the sales price of a taxable item in total local sales
and use taxes for all local taxing jurisdictions.
(28) Use--This term has the meaning given in
§
3.346 of this title.
(29) Use tax--A tax imposed on the storage,
use or other consumption of a taxable item in this state.
(b) Determining the place of business of a
seller.
(1) Distribution centers,
manufacturing plants, storage yards, warehouses, and similar facilities.
(A) A distribution center, manufacturing
plant, storage yard, warehouse, or similar facility operated by a seller for
the purpose of selling taxable items where sales personnel of the seller
receive three or more orders for taxable items during the calendar year from
persons other than employees, independent contractors, and natural persons
affiliated with the seller is a place of business of the seller. Forwarding
previously received orders to the facility for fulfilment does not make the
facility a place of business.
(B)
If a location that is a place of business of the seller, such as a sales
office, is in the same building as a distribution center, manufacturing plant,
storage yard, warehouse, or similar facility operated by a seller, then the
entire facility is a place of business of the seller.
(2) Kiosks. A kiosk is not a place of
business of the seller for the purpose of determining where a sale is
consummated for local tax purposes. A seller who owns or operates a kiosk in
Texas is, however, engaged in business in this state as provided in §
3.286 of this title.
(3) Purchasing offices.
(A) A purchasing office is not a place of
business of the seller if the purchasing office exists solely to rebate a
portion of the local sales and use tax imposed by Tax Code, Chapters 321, 322,
or 323 to a business with which it contracts; or if the purchasing office
functions or exists to avoid the tax legally due under Tax Code, Chapters 321,
322, or 323. A purchasing office does not exist solely to rebate a portion of
the local sales and use tax or to avoid the tax legally due under Tax Code,
Chapters 321, 322, or 323 if the purchasing office provides significant
business services to the contracting business beyond processing invoices,
including logistics management, purchasing, inventory control, or other vital
business services.
(B) In making a
determination under subparagraph (A) of this paragraph, as to whether a
purchasing office provides significant business services to the contracting
business beyond processing invoices, the comptroller will compare the total
value of the other business services to the value of processing invoices. If
the total value of the other business services, including logistics management,
purchasing, inventory control, or other vital business services, is less than
the value of the service to process invoices, then the purchasing office will
be presumed not to be a place of business of the seller.
(C) If the comptroller determines that a
purchasing office is not a place of business of the seller, the sale of any
taxable item is deemed to be consummated at the place of business of the seller
from whom the purchasing office purchased the taxable item for resale and local
sales and use taxes are due according to the following rules.
(i) When taxable items are purchased from a
Texas seller, local sales taxes are due based on the location of the seller's
place of business where the sale is deemed to be consummated, as determined in
accordance with subsection (c) of this section.
(ii) When the sale of a taxable item is
deemed to be consummated at a location outside of this state, local use tax is
due based on the location where the items are first stored, used or consumed by
the entity that contracted with the purchasing office in accordance with
subsection (d) of this section.
(4) An order that is received by a
salesperson who is not at a place of business of the seller when the
salesperson receives the order is treated as being received at the location
from which the salesperson operates. Examples include orders that a salesperson
receives by mail, telephone, including Voice over Internet Protocol and
cellular phone calls, facsimile, and email while traveling. The location from
which the salesperson operates is the principal fixed location where the
salesperson conducts work-related activities. The location from which a
salesperson operates will be a place of business of the seller only if the
location meets the definition of a "place of business of a seller" in
subsection (a)(16) of this section on its own, without regard to the orders
imputed to that location by this paragraph.
(5) A facility without sales personnel is
usually not a "place of business of the seller." A vending machine is not "an
established outlet, office, or location," and does not constitute a "place of
business of the seller." Instead, a vending machine sale is treated as a sale
by an itinerant vendor. See subsections (a)(10) and (c)(6) of this section.
However, a walk-in retail outlet with a stock of goods available for immediate
purchase through a cashier-less point of sale terminal at the outlet would be
"an established outlet, office, or location" so as to constitute a "place of
business of the seller" even though sales personnel are not required for every
sale. A computer that operates an automated shopping cart software program is
not an established outlet, office, or location," and does not constitute a
"place of business of the seller." A computer that operates an automated
telephone ordering system is not "an established outlet, office, or location,"
and does not constitute a "place of business of the seller."
(6) If a small business or a micro-business
operates a single location out of which it conducts all of its business
activities, the comptroller will presume that the location is a place of
business of the seller.
(c) Local sales tax - Consummation of sale -
determining the local taxing jurisdictions to which sales tax is due. Except
for the special rules applicable to remote sellers in subsection (i)(3) of this
section, direct payment permit purchases in subsection (j) of this section, and
certain taxable items, including taxable items sold by a marketplace provider,
as provided in subsection (k) of this section, each sale of a taxable item is
consummated at the location indicated by the provisions of this subsection. The
following rules, taken from Tax Code, §
321.203 and §
323.203, apply to all
sellers engaged in business in Texas, regardless of whether they have no place
of business in Texas, a single place of business in Texas, or multiple places
of business in Texas.
(1) Consummation of sale
- order received at a place of business of the seller in Texas.
(A) Order placed in person. Except as
provided by paragraph (3) of this subsection, when an order for a taxable item
is placed in person at a seller's place of business in Texas, including at a
temporary place of business of the seller in Texas, the sale of that item is
consummated at that place of business of the seller, regardless of the location
where the order is fulfilled.
(B)
Order not placed in person.
(i) Order
fulfilled at a place of business of the seller in Texas. When an order is
received at a place of business of the seller in Texas and is fulfilled at a
place of business of the seller in Texas, the sale is consummated at the place
of business where the order is fulfilled.
(ii) Order not fulfilled at a place of
business of the seller in Texas. When an order is received at a place of
business of the seller in Texas and is fulfilled at a location that is not a
place of business of the seller in Texas, the sale is consummated at the place
of business where the order is received.
(2) Consummation of sale - order not received
at a place of business of the seller in Texas.
(A) Order fulfilled at a place of business of
the seller in Texas. When an order is received at a location that is not a
place of business of the seller in Texas or is received outside of Texas, and
is fulfilled from a place of business of the seller in Texas, the sale is
consummated at the place of business where the order is fulfilled.
(B) Order not fulfilled from a place of
business of the seller in Texas.
(i) Order
fulfilled in Texas. When an order is received at a location that is not a place
of business of the seller in Texas and is fulfilled from a location in Texas
that is not a place of business of the seller, the sale is consummated at the
location in Texas to which the order is shipped or delivered, or at which the
purchaser of the item takes possession.
(ii) Order not fulfilled in Texas. When an
order is received by a seller at a location that is not a place of business of
the seller in Texas, and is fulfilled from a location outside of Texas, the
sale is not consummated in Texas. However, a use is consummated at the first
point in Texas where the item is stored, used, or consumed after the interstate
transit has ceased. A taxable item delivered to a point in Texas is presumed to
be for storage, use, or consumption at that point until the contrary is
established. Local use tax should be collected as provided in subsection (d) of
this section. Except as provided in subsection (i)(3) of this section, a remote
seller required to collect state use tax under §
3.286(b)(2) of
this title must also collect local use tax.
(3) Exception for qualifying economic
development agreements entered into before January 1, 2009, pursuant to Tax
Code, §
321.203(c-4)
- (c-5) or §
323.203(c-4)
- (c-5). This paragraph is effective until September 1, 2024. If applicable,
the local sales tax due on the sale of a taxable item is based on the location
of the qualifying warehouse, which is a place of business of the seller, from
which the item is shipped or delivered or at which the purchaser of the item
takes possession.
(4) Local sales
taxes are due to each local taxing jurisdiction with sales tax in effect where
the sale is consummated. Local use tax may also be due if the total amount of
local sales taxes due does not reach the two percent cap, and the item
purchased is shipped or delivered to a location in one or more different local
taxing jurisdictions, as provided in subsection (d) of this section.
(5) Multiple special purpose district taxes,
multiple transit authority sales taxes, or a combination of the two may apply
to a single transaction. If the sale of a taxable item is consummated at a
location within the boundaries of multiple special purpose districts or transit
authorities, local sales tax is owed to each of the jurisdictions in effect at
that location. For example, a place of business of the seller located in the
city of San Antonio is within the boundaries of both the San Antonio Advanced
Transportation District and the San Antonio Metropolitan Transit Authority, and
the seller is required to collect sales tax for both transit authorities.
Similarly, a place of business of the seller in Flower Mound is located within
the boundaries of two special purpose districts, the Flower Mound Crime Control
District and the Flower Mound Fire Control District, and the seller is
responsible for collecting sales tax for both special purpose
districts.
(6) Itinerant vendors;
vending machines.
(A) Itinerant vendors. Sales
made by itinerant vendors are consummated at, and itinerant vendors must
collect sales tax based upon, the location where the item is delivered or at
which the purchaser of the item takes possession. Itinerant vendors do not have
any responsibility to collect use tax.
(B) Vending machines. Sales of taxable items
made from a vending machine are consummated at the location of the vending
machine. See §
3.293 of this title (relating to
Food; Food Products; Meals; Food Service) for more information about vending
machine sales.
(7) The
location where the order is received by or on behalf of the seller means the
physical location of a seller or third party such as an established outlet,
office location, or automated order receipt system operated by or on behalf of
the seller where an order is initially received by or on behalf of the seller
and not where the order may be subsequently accepted, completed or fulfilled.
An order is received when all of the information from the purchaser necessary
to the determination whether the order can be accepted has been received by or
on behalf of the seller. The location from which a product is shipped shall not
be used in determining the location where the order is received by the
seller.
(d) Local use
tax. The provisions addressing the imposition of state use tax in §
3.346 of this title also apply to
the imposition of local use tax. For example, consistent with §
3.346(e) of this
title, all taxable items that are shipped or delivered to a location in this
state that is within the boundaries of a local taxing jurisdiction are presumed
to have been purchased for use in that local taxing jurisdiction as well as
presumed to have been purchased for use in the state.
(1) General rules.
(A) When local use taxes are due in addition
to local sales taxes as provided by subsection (c) of this section, all
applicable use taxes must be collected or accrued in the following order until
the two percent cap is reached: city, county, special purpose district, and
transit authority. If more than one special purpose district use tax is due,
all such taxes are to be collected or accrued before any transit authority use
tax is collected or accrued. See subparagraphs (D) and (E) of this
paragraph.
(B) If a local use tax
cannot be collected or accrued at its full rate without exceeding the two
percent cap, the seller cannot collect it, or any portion of it, and the
purchaser is not responsible for accruing it.
(C) If a seller collects a local sales tax on
an item, or a purchaser accrues a local sales tax on an item, a use tax for the
same type of jurisdiction is not due on the same item. For example, after a
city sales tax has been collected or accrued for an item, no use tax is due to
that same or a different city on that item, but use tax may be due to a county,
special purpose district, or transit authority. Similarly, if one or more
special purpose district sales taxes have been collected or accrued for an
item, no special purpose district use tax is due on that item, and if one or
more transit authority sales taxes have been collected or accrued for an item,
no transit authority use tax is due on that item.
(D) Collection or accrual of use tax for
multiple special purpose districts. If more than one special purpose district
use tax is in effect at the location where use of an item occurs, the special
purpose district taxes are due in the order of their effective dates, beginning
with the earliest effective date, until the two percent cap is met. The
effective dates of all special purpose district taxes are available on the
comptroller's website. However, if the collection or accrual of use tax for the
district with the earliest effective date would exceed the two percent cap, the
tax for that district is not due and the seller or purchaser should determine,
following the criteria in subparagraphs (A) - (C) of this paragraph, whether
use tax is due for the district that next became effective.
(i) If the competing special purpose district
taxes became effective on the same date, the special purpose district taxes are
due in the order of the earliest date for which the election in which the
district residents authorized the imposition of sales and use tax by the
district was held.
(ii) If the
elections to impose the local taxes were held on the same date, the special
purpose district taxes are due in the order of the earliest date for which the
enabling legislation under which each district was created became
effective.
(E) Collection
or accrual of use tax for multiple transit authorities. If more than one
transit authority use tax is in effect at the location where use of an item
occurs, and the two percent cap has not been met, the transit authority taxes
are due in the order of their effective dates, beginning with the earliest
effective date, until the two percent cap is met. The effective dates of all
transit authority taxes are available on the comptroller's website. However, if
the collection or accrual of use tax for the authority with the earliest
effective date would exceed the two percent cap, the tax for that authority is
not due and the seller or purchaser should determine, following the criteria in
subparagraphs (A) - (D) of this paragraph, whether use tax is due for the
authority that next became effective.
(i) If
the competing transit authorities became effective on the same date, the
transit authority taxes are due in the order of the earliest date for which the
election in which the authority residents authorized the imposition of sales
and use tax by the authority was held.
(ii) If the elections to impose local taxes
were held on the same date, the transit authority use taxes are due in the
order of the earliest date for which the enabling legislation under which each
authority was created became effective.
(2) General use tax rules applied to specific
situations. The following fact patterns explain how local use tax is to be
collected or accrued and remitted to the comptroller based on, and subject to,
the general rules in paragraph (1) of this subsection.
(A) Sale consummated outside the state, item
delivered from outside the state or from a location in Texas that is not
operated by the seller - local use tax due. Except as provided in subsection
(i)(3) of this section, if a sale is consummated outside of this state
according to the provisions of subsection (c) of this section, and the item
purchased is either shipped or delivered to a location in this state as
designated by the purchaser from a location outside of the state, or if the
order is drop shipped directly to the purchaser from a third-party supplier,
local use tax is owed based upon the location in this state to which the order
is shipped or delivered or at which the purchaser of the item takes possession.
The seller is responsible for collecting the local use tax due on the sale. If
the seller does not collect the local use taxes due on the sale, the purchaser
is responsible for accruing such taxes and remitting them directly to the
comptroller according to the provisions in paragraph (1) of this subsection.
For example, if an order for a taxable item is received by a seller at a
location outside of Texas, and the order is shipped to the purchaser from a
location outside of the state, local use tax is due based upon the location to
which the order is shipped or delivered or at which the purchaser of the item
takes possession.
(B) Sale
consummated in Texas outside a local taxing jurisdiction, item delivered into
one or more local taxing jurisdictions - local use tax due. If a sale is
consummated at a location in Texas that is outside of the boundaries of any
local taxing jurisdiction according to the provisions of subsection (c) of this
section, and the order is shipped or delivered to the purchaser at a location
in this state that is within the boundaries of one or more local taxing
jurisdictions, local use tax is due based on the location to which the items
are shipped or delivered or at which the purchaser of the item takes
possession. The seller is responsible for collecting the local use taxes due on
the sale, regardless of the location of the seller in Texas. If the seller
fails to collect any local use taxes due, the purchaser is responsible for
accruing such taxes and remitting them directly to the comptroller.
(C) Sale consummated in any local taxing
jurisdictions imposing less than 2.0% in total local taxes - local sales taxes
and use taxes due. If a sale is consummated at a location in Texas where the
total local sales tax rate imposed by the taxing jurisdictions in effect at
that location does not equal 2.0% according to the provisions of subsection (c)
of this section, and the item is shipped or delivered to the purchaser at a
location in this state that is inside the boundaries of a different local
taxing jurisdiction, additional local use tax may be due based on the location
to which the order is shipped or delivered or at which the purchaser of the
item takes possession, subject to the two percent cap. The seller is
responsible for collecting any additional local use taxes due on the sale,
regardless of the location of the seller in Texas. See subsection (i) of this
section. If the seller fails to collect the additional local use taxes due, the
purchaser is responsible for accruing such taxes and remitting them directly to
the comptroller.
(i) Example one - if an order
is received in person at a place of business of the seller, such that the sale
is consummated at the location where the order is received as provided under
subsection (c)(1)(A) of this section, and the local sales tax due on the sale
does not meet the two percent cap, additional local use taxes are due based on
the location to which the order is shipped or delivered or at which the
purchaser of the item takes possession, subject to the provisions in paragraph
(1) of this subsection.
(ii)
Example two - if a seller receives an order for a taxable item at a seller's
place of business in Texas, and the seller ships or delivers the item from an
out-of-state location to a location in this state as designated by the
purchaser, local sales tax is due based upon the location of the place of
business of the seller where the order is received. If the local sales tax due
on the item does not meet the two percent cap, use taxes, subject to the
provisions in paragraph (1) of this subsection, are due based upon the location
where the items are shipped or delivered or at which the purchaser of the item
takes possession.
(e) Effect of other law.
(1) Tax Code, Title 2, Subtitles A (General
Provisions) and B (Enforcement and Collection), Tax Code, Chapter 141
(Multistate Tax Compact) and Tax Code, Chapter 151 (Limited Sales, Excise, and
Use Tax) apply to transactions involving local taxes. Related sections of this
title and comptroller rulings shall also apply with respect to local taxes.
This includes authorities such as court cases and federal law that affect
whether an item is taxable or is excluded or exempt from taxation.
(2) Permits, exemption certificates, and
resale certificates required by Tax Code, Chapter 151, shall also satisfy the
requirements for collecting and remitting local taxes, unless otherwise
indicated by this section or other sections of this title. For example, see
subsection (n) of this section concerning prior contract exemptions.
(3) Any provisions in this section or other
sections of this title related to a seller's responsibilities for collecting
and remitting local taxes to the comptroller shall also apply to a purchaser if
the seller does not collect local taxes that are due. The comptroller may
proceed against the seller or purchaser for the local tax owed by
either.
(f) Tax rates.
Except as otherwise provided by law, no local governmental entity may adopt or
increase a sales and use tax if, as a result of the adoption or increase of the
tax, the combined rate of all sales and use taxes imposed by local taxing
jurisdictions having territory in the local governmental entity would exceed
2.0% at any location within the boundaries of the local governmental entity's
jurisdiction. The following are the local tax rates that may be adopted.
(1) Cities. Cities may impose sales and use
tax at a rate of up to 2.0%.
(2)
Counties. Counties may impose sales and use tax at rates ranging from 0.5% to
1.5%.
(3) Special purpose
districts. Special purpose districts may impose sales and use tax at rates
ranging from 0.125% to 2.0%.
(4)
Transit authorities. Transit authorities may impose sales and use tax at rates
ranging from 0.25% to 1.0%.
(g) Jurisdictional boundaries, combined
areas, and city tax imposed through strategic partnership agreements.
(1) Jurisdictional boundaries.
(A) City boundaries. City taxing
jurisdictional boundaries cannot overlap one another and a city cannot impose a
sales and use tax in an area that is already within the jurisdiction of another
city.
(B) County boundaries. County
tax applies to all locations within that county.
(C) Special purpose district and transit
authority boundaries. Special purpose districts and transit authorities may
cross or share boundaries with other local taxing jurisdictions and may
encompass, in whole or in part, other local taxing jurisdictions, including
cities and counties. A geographic location or address in this state may lie
within the boundaries of more than one special purpose district or more than
one transit authority.
(D)
Extraterritorial jurisdictions. Except as otherwise provided by paragraph (3)
of this subsection concerning strategic partnership agreements and subsection
(l)(5) of this section concerning the City of El Paso and Fort Bliss, city
sales and use tax does not apply to taxable sales that are consummated outside
the boundaries of the city, including sales made in a city's extraterritorial
jurisdiction. However, an extraterritorial jurisdiction may lie within the
boundaries of a special purpose district, transit authority, county, or any
combination of the three, and the sales and use taxes for those jurisdictions
would apply to those sales.
(2) Combined areas. A combined area is an
area where the boundaries of a city overlap the boundaries of one or more other
local taxing jurisdictions as a result of an annexation of additional territory
by the city, and where, as the result of the imposition of the city tax in the
area in addition to the local taxes imposed by the existing taxing
jurisdictions, the combined local tax rate would exceed 2.0%. The comptroller
shall make accommodations to maintain a 2.0% rate in any combined area by
distributing the 2.0% tax revenue generated in these combined areas to the
local taxing jurisdictions located in the combined areas as provided in Tax
Code, §
321.102 or Health and Safety
Code, §
775.0754.
Combined areas are identified on the comptroller's website. Sellers engaged in
transactions on which local sales or use taxes are due in a combined area, or
persons who must self-accrue and remit tax directly to the comptroller, must
use the combined area local code when reporting the tax rather than the codes
for the individual city, county, special purpose districts, or transit
authorities that make up the combined area.
(3) City tax imposed through strategic
partnership agreements.
(A) The governing
bodies of a district, as defined in Local Government Code, §
43.0751, and a
city may enter into a limited-purpose annexation agreement known as a strategic
partnership agreement. Under this agreement, the city may impose sales and use
tax within all or part of the boundaries of a district. Areas within a district
that are annexed for this limited purpose are treated as though they are within
the boundaries of the city for purposes of city sales and use tax.
(B) Counties, transit authorities, and
special purpose districts may not enter into strategic partnership agreements.
Sales and use taxes imposed by those taxing jurisdictions do not apply in the
limited-purpose annexed area as part of a strategic partnership agreement
between a city and an authorized district. However, a county, special purpose
district, or transit authority sales and use tax, or any combination of these
three types of taxes, may apply at locations included in a strategic
partnership agreement between a city and an authorized district if the tax is
imposed in that area by the applicable jurisdiction as allowed under its own
controlling authorities.
(C) Prior
to September 1, 2011, the term "district" was defined in Local Government Code,
§
43.0751 as a
municipal utility district or a water control and improvement district. The
definition was amended effective September 1, 2011, to mean a conservation and
reclamation district operating under Water Code, Chapter 49.
(h) Places of business
of the seller and job sites crossed by local taxing jurisdiction boundaries.
(1) Places of business of the seller crossed
by local taxing jurisdiction boundaries. If a place of business of the seller
is crossed by one or more local taxing jurisdiction boundaries so that a
portion of the place of business of the seller is located within a taxing
jurisdiction and the remainder of the place of business of the seller lies
outside of the taxing jurisdiction, tax is due to the local taxing
jurisdictions in which the sales office is located. If there is no sales
office, sales tax is due to the local taxing jurisdictions in which any cash
registers are located.
(2) Job
sites.
(A) Residential repair and remodeling;
new construction of an improvement to realty. When a contractor is improving
real property under a separated contract, and the job site is crossed by the
boundaries of one or more local taxing jurisdictions, the local taxes due on
any separately stated charges for taxable items incorporated into the real
property must be allocated to the local taxing jurisdictions based on the total
square footage of the real property improvement located within each
jurisdiction, including the square footage of any standalone structures that
are part of the construction, repair, or remodeling project. For more
information about tax due on materials used at residential and new construction
job sites, refer to §
3.291 of this title (relating to
Contractors).
(B) Nonresidential
real property repair and improvement. When taxable services are performed to
repair, remodel, or restore nonresidential real property, including a pipeline,
transmission line, or parking lot, that is crossed by the boundaries of one or
more local taxing jurisdictions, the local taxes due on the taxable services,
including materials and any other charges connected to the services performed,
must be allocated among the local taxing jurisdictions based upon the total
mileage or square footage, as appropriate, of the repair, remodeling, or
restoration project located in each jurisdiction. For more information about
tax due on materials used at nonresidential real property repair and remodeling
job sites, refer to §
3.357 of this title (relating to
Nonresidential Real Property Repair, Remodeling, and Restoration; Real Property
Maintenance).
(i) Sellers' and purchasers' responsibilities
for collecting or accruing local taxes.
(1)
Sale consummated in Texas; seller responsible for collecting local sales taxes
and applicable local use taxes. When a sale of a taxable item is consummated at
a location in Texas as provided by subsection (c) of this section, the seller
must collect each local sales tax in effect at the location. If the total rate
of local sales tax due on the sale does not reach the two percent cap, and the
seller ships or delivers the item into another local taxing jurisdiction, then
the seller is required to collect additional local use taxes due, if any, based
on the location to which the item is shipped or delivered or at which the
purchaser of the item takes possession, regardless of the location of the
seller in Texas. For more information regarding local use taxes, refer to
subsection (d) of this section.
(2)
Out-of-state sale; seller engaged in business in Texas. Except as provided in
paragraph (3) of this subsection, when a sale is not consummated in Texas, a
seller who is engaged in business in this state is required to collect and
remit local use taxes due, if any, on orders of taxable items shipped or
delivered at the direction of the purchaser into a local taxing jurisdiction in
this state based upon the location in this state to which the item is shipped
or delivered or at which the purchaser of the item takes possession as provided
in subsection (d) of this section.
(3) Local use tax rate for remote sellers.
(A) A remote seller required to collect and
remit one or more local use taxes in connection with a sale of a taxable item
must compute the amount using:
(i) the
combined tax rate of all applicable local use taxes based on the location to
which the item is shipped or delivered or at which the purchaser of the item
takes possession; or
(ii) at the
remote seller's election, the single local use tax rate published in the
Texas Register.
(B) A remote seller that is storing tangible
personal property in Texas to be used for fulfillment at a facility of a
marketplace provider that has certified that it will assume the rights and
duties of a seller with respect to the tangible personal property, as provided
for in §
3.286 of this title, may elect the
single local use tax rate under subparagraph (A)(ii) of this
paragraph.
(C) Notice to the
comptroller of election and revocation of election.
(i) Before using the single local use tax
rate, a remote seller must notify the comptroller of its election using a form
prescribed by the comptroller. A remote seller may also notify the comptroller
of the election on its use tax permit application form. The remote seller must
use the single local use tax rate for all of its sales of taxable items until
the election is revoked as provided in clause (ii) of this
subparagraph.
(ii) A remote seller
may revoke its election by filing a form prescribed by the comptroller. If the
comptroller receives the notice by October 1, the revocation will be effective
January 1 of the following year. If the comptroller receives the notice after
October 1, the revocation will be effective January 1 of the year after the
following year. For example, a remote seller must notify the comptroller by
October 1, 2020, for the revocation to be effective January 1, 2021. If the
comptroller receives the revocation on November 1, 2020, the revocation will be
effective January 1, 2022.
(D) Single local use tax rate.
(i) The single local use tax rate in effect
for the period beginning October 1, 2019, and ending December 31, 2019, is
1.75%.
(ii) The single local use
tax rate in effect for the period beginning January 1, 2020, and ending
December 31, 2020, is 1.75%.
(E) Annual publication of single local use
tax rate. Before the beginning of a calendar year, the comptroller will publish
notice of the single local use tax rate in the Texas Register
that will be in effect for that calendar year.
(F) Calculating the single local use tax
rate. 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 soon as practicable after the end of
a state fiscal year, the comptroller must determine the estimated average rate
of local sales and use taxes imposed in this state during the preceding state
fiscal year by:
(i) dividing the total amount
of net local sales and use taxes remitted to the comptroller during the state
fiscal year by the total amount of net state sales and use tax remitted to the
comptroller during the state fiscal year;
(ii) multiplying the amount computed under
clause (i) of this subparagraph by the rate provided in Tax Code, §
151.051; and
(iii) rounding the amount computed under
clause (ii) of this subparagraph to the nearest.0025.
(G) Direct refund. A purchaser may request a
refund based on local use taxes paid in a calendar year for the difference
between the single local use tax rate paid by the purchaser and the amount the
purchaser would have paid based on the combined tax rate for all applicable
local use taxes. Notwithstanding the refund requirements under §
3.325(a)(1) of
this title (relating to Refunds and Payments Under Protest), a non-permitted
purchaser may request a refund directly from the comptroller for the tax paid
in the previous calendar year, no earlier than January 1 of the following
calendar year within the statute of limitation under Tax Code,
111.104
(Refunds).
(H) Marketplace providers. Notwithstanding
subparagraph (A) of this paragraph, marketplace providers may not use the
single local use tax rate and must compute the amount of local use tax to
collect and remit using the combined tax rate of all applicable local use
taxes.
(4) Purchaser
responsible for accruing and remitting local taxes if seller fails to collect.
(A) If a seller does not collect the state
sales tax, any applicable local sales taxes, or both, on a sale of a taxable
item that is consummated in Texas, then the purchaser is responsible for filing
a return and paying the tax. The local sales taxes due are based on the
location in this state where the sale is consummated as provided in subsection
(c) of this section.
(B) A
purchaser who buys an item for use in Texas from a seller who does not collect
the state use tax, any applicable local use taxes, or both, is responsible for
filing a return and paying the tax. The local use taxes due are based on the
location where the item is first stored, used, or consumed by the
purchaser.
(C) For more information
about how to report and pay use tax directly to the comptroller, see §
3.286 of this title.
(5) Local tax is due on the sales
price of a taxable item, as defined in Tax Code, §
151.007, in the report
period in which the taxable item is purchased or the period in which the
taxable item is first stored, used, or otherwise consumed in a local taxing
jurisdiction.
(6) A purchaser is
not liable for additional local use tax if the purchaser pays local use tax
using the rate elected by an eligible remote seller according to paragraph (3)
of this subsection. The remote seller must be identified on the comptroller's
website as electing to use the single local use tax rate. A purchaser must
verify that the remote seller is listed on the comptroller's website. If the
remote seller is not listed on the comptroller's website, the purchaser will be
liable for additional use tax due in accordance to paragraph (4) of this
subsection.
(j) Items
purchased under a direct payment permit.
(1)
When taxable items are purchased under a direct payment permit, local use tax
is due based upon the location where the permit holder first stores the taxable
items, except that if the taxable items are not stored, then local use tax is
due based upon the location where the taxable items are first used or otherwise
consumed by the permit holder.
(2)
If, in a local taxing jurisdiction, storage facilities contain taxable items
purchased under a direct payment exemption certificate and at the time of
storage it is not known whether the taxable items will be used in Texas, then
the taxpayer may elect to report the use tax either when the taxable items are
first stored in Texas or are first removed from inventory for use in Texas, as
long as use tax is reported in a consistent manner. See also §
3.288(i) of this
title (relating to Direct Payment Procedures and Qualifications) and §
3.346(g) of this
title.
(3) If local use tax is paid
on stored items that are subsequently removed from Texas before they are used,
the tax may be recovered in accordance with the refund and credit provisions of
§
3.325 of this title and §
3.338 of this title (relating to
Multistate Tax Credits and Allowance of Credit for Tax Paid to
Suppliers).
(k) Special
rules for certain taxable goods and services. Sales of the following taxable
goods and services are consummated at, and local tax is due based upon, the
location indicated in this subsection.
(1)
Amusement services. Local tax is due based upon the location where the
performance or event occurs. For more information on amusement services, refer
to §
3.298 of this title (relating to
Amusement Services).
(2) Cable
services. When a service provider uses a cable system to provide cable
television or bundled cable services to customers, local tax is due as provided
for in §
3.313 of this title. When a
service provider uses a satellite system to provide cable services to
customers, no local tax is due on the service in accordance with the
Telecommunications Act of 1996, §602.
(3) Florists. Local sales tax is due on all
taxable items sold by a florist based upon the location where the order is
received, regardless of where or by whom delivery is made. Local use tax is not
due on deliveries of taxable items sold by florists. For example, if the place
of business of the florist where an order is taken is not within the boundaries
of any local taxing jurisdiction, no local sales tax is due on the item and no
local use tax is due regardless of the location of delivery. If a Texas florist
delivers an order in a local taxing jurisdiction at the instruction of an
unrelated florist, and if the unrelated florist did not take the order within
the boundaries of a local taxing jurisdiction, local use tax is not due on the
delivery. For more information about florists' sales and use tax obligations,
refer to §
3.307 of this title (relating to
Florists).
(4) Landline
telecommunications services. Local taxes due on landline telecommunications
services are based upon the location of the device from which the call or other
transmission originates. If the seller cannot determine where the call or
transmission originates, local taxes due are based on the address to which the
service is billed. For more information, refer to §
3.344 of this title (relating to
Telecommunications Services).
(5)
Marketplace provider sales. Local taxes are due on sales of taxable items
through a marketplace provider based on the location in this state to which the
item is shipped or delivered or at which the purchaser takes possession. For
more information, refer to §
3.286 of this title.
(6) Mobile telecommunications services. Local
taxes due on mobile telecommunications services are based upon the location of
the customer's place of primary use as defined in §
3.344(a)(8) of
this title, and local taxes are to be collected as indicated in §
3.344(h) of this
title.
(7) Motor vehicle parking
and storage. Local taxes are due based on the location of the space or facility
where the vehicle is parked. For more information, refer to §
3.315 of this title (relating to
Motor Vehicle Parking and Storage).
(8) Natural gas and electricity. Any local
city and special purpose taxes due are based upon the location where the
natural gas or electricity is delivered to the purchaser. As explained in
subsection (l)(1) of this section, residential use of natural gas and
electricity is exempt from all county sales and use taxes and all transit
authority sales and use taxes, most special purpose district sales and use
taxes, and many city sales and use taxes. A list of the cities and special
purpose districts that do impose, and those that are eligible to impose, local
sales and use tax on residential use of natural gas and electricity is
available on the comptroller's website. For more information, also refer to
§
3.295 of this title (relating to
Natural Gas and Electricity).
(9)
Nonresidential real property repair and remodeling services. Local taxes are
due on services to remodel, repair, or restore nonresidential real property
based on the location of the job site where the remodeling, repair, or
restoration is performed. See also subsection (h)(2)(B) of this section and
§
3.357 of this title.
(10) Residential real property repair and
remodeling and new construction of a real property improvement performed under
a separated contract. When a contractor constructs a new improvement to realty
pursuant to a separated contract or improves residential real property pursuant
to a separated contract, the sale is consummated at the job site at which the
contractor incorporates taxable items into the customer's real property. See
also subsection (h)(2)(A) of this section and §
3.291 of this title.
(11) Waste collection services. Local taxes
are due on garbage or other solid waste collection or removal services based on
the location at which the waste is collected or from which the waste is
removed. For more information, refer to §
3.356 of this title (relating to
Real Property Service).
(l) Special exemptions and provisions
applicable to individual jurisdictions.
(1)
Residential use of natural gas and electricity.
(A) Mandatory exemptions from local sales and
use tax. Residential use of natural gas and electricity is exempt from most
local sales and use taxes. Counties, transit authorities, and most special
purpose districts are not authorized to impose sales and use tax on the
residential use of natural gas and electricity. Pursuant to Tax Code, §
321.105, any city that
adopted a local sales and use tax effective October 1, 1979, or later is
prohibited from imposing tax on the residential use of natural gas and
electricity. See §
3.295 of this title.
(B) Imposition of tax allowed in certain
cities. Cities that adopted local sales tax prior to October 1, 1979, may, in
accordance with the provisions in Tax Code, §
321.105, choose to repeal
the exemption for residential use of natural gas and electricity. The
comptroller's website provides a list of cities that impose tax on the
residential use of natural gas and electricity, as well as a list of those
cities that do not currently impose the tax, but are eligible to do
so.
(C) Effective January 1, 2010,
a fire control, prevention, and emergency medical services district organized
under Local Government Code, Chapter 344 that imposes sales tax under Tax Code,
§
321.106, or a crime control
and prevention district organized under Local Government Code, Chapter 363 that
imposes sales tax under Tax Code, §
321.108, that is located in
all or part of a municipality that imposes a tax on the residential use of
natural gas and electricity as provided under Tax Code, §
321.105 may impose tax on
residential use of natural gas and electricity at locations within the
district. A list of the special purpose districts that impose tax on
residential use of natural gas and electricity and those districts eligible to
impose the tax that do not currently do so is available on the comptroller's
website.
(2)
Telecommunication services. Telecommunications services are exempt from all
local sales taxes unless the governing body of a city, county, transit
authority, or special purpose district votes to impose sales tax on these
services. However, since 1999, under Tax Code, §
322.109(d),
transit authorities created under Transportation Code, Chapter 451 cannot
repeal the exemption unless the repeal is first approved by the governing body
of each city that created the local taxing jurisdiction. The local sales tax is
limited to telecommunications services occurring between locations within
Texas. See §
3.344 of this title. The
comptroller's website provides a list of local taxing jurisdictions that impose
tax on telecommunications services.
(3) Emergency services districts.
(A) Authority to exclude territory from
imposition of emergency services district sales and use tax. Pursuant to the
provisions of Health and Safety Code, §
775.0751(c-1),
an emergency services district wishing to enact a sales and use tax may exclude
from the election called to authorize the tax any territory in the district
where the sales and use tax is then at 2.0%. The tax, if authorized by the
voters eligible to vote on the enactment of the tax, then applies only in the
portions of the district included in the election. The tax does not apply to
sales made in the excluded territories in the district and sellers in the
excluded territories should continue to collect local sales and use taxes for
the local taxing jurisdictions in effect at the time of the election under
which the district sales and use tax was authorized as applicable.
(B) Consolidation of districts resulting in
sales tax sub-districts. Pursuant to the provisions of Health and Safety Code,
§
775.018(f),
if the territory of a district proposed under Health and Safety Code, Chapter
775 overlaps with the boundaries of another district created under that
chapter, the commissioners court of each county and boards of the counties in
which the districts are located may choose to create a consolidated district in
the overlapping territory. If two districts that want to consolidate under
Health and Safety Code, §
775.024 have
different sales and use tax rates, the territory of the former districts
located within the consolidated area will be designated as sub-districts and
the sales tax rate within each sub-district will continue to be imposed at the
rate the tax was imposed by the former district that each sub-district was part
of prior to the consolidation.
(4) East Aldine Management District.
(A) Special sales and use tax zones within
district; separate sales and use tax rate. As set out in Special District Local
Laws Code, §
3817.154(e) and
(f), the East Aldine Management District
board may create special sales and use tax zones within the boundaries of the
District and, with voter approval, enact a special sales and use tax rate in
each zone that is different from the sales and use tax rate imposed in the rest
of the district.
(B) Exemptions
from special zone sales and use tax. The sale, production, distribution, lease,
or rental of; and the use, storage, or other consumption within a special sales
and use tax zone of; a taxable item sold, leased, or rented by the entities
identified in clauses (i) - (vi) of this subparagraph are exempt from the
special zone sales and use tax. State and all other applicable local taxes
apply unless otherwise exempted by law. The special zone sales and use tax
exemption applies to:
(i) a retail electric
provider as defined by Utilities Code, §
31.002;
(ii) an electric utility or a power
generation company as defined by Utilities Code, §
31.002;
(iii) a gas utility as defined by Utilities
Code, §
101.003 or §
121.001, or a person
who owns pipelines used for transportation or sale of oil or gas or a product
or constituent of oil or gas;
(iv)
a person who owns pipelines used for the transportation or sale of carbon
dioxide;
(v) a telecommunications
provider as defined by Utilities Code, §
51.002; or
(vi) a cable service provider or video
service provider as defined by Utilities Code, §
66.002.
(5) Imposition of city
sales tax and transit tax on certain military installations; El Paso and Fort
Bliss. Pursuant to Tax Code, §
321.1045 (Imposition of
Sales and Use Tax in Certain Federal Military Installations), for purposes of
the local sales and use tax imposed under Tax Code, Chapter 321, the city of El
Paso includes the area within the boundaries of Fort Bliss to the extent it is
in the city's extraterritorial jurisdiction. However, the El Paso transit
authority does not include Fort Bliss. See Transportation Code, §
453.051
concerning the Creation of Transit Departments.
(m) Restrictions on local sales tax rebates
and other economic incentives. Pursuant to Local Government Code, §
501.161,
Section 4A and 4B development corporations may not offer to provide economic
incentives, such as local sales tax rebates authorized under Local Government
Code, Chapters 380 or 381, to persons whose business consists primarily of
purchasing taxable items using resale certificates and then reselling those
same items to a related party. A related party means a person or entity which
owns at least 80% of the business enterprise to which sales and use taxes would
be rebated as part of an economic incentive.
(n) Prior contract exemptions. The provisions
of §
3.319 of this title (relating to
Prior Contracts) concerning definitions and exclusions apply to prior contract
exemptions.
(1) Certain contracts and bids
exempt. No local taxes are due on the sale, use, storage, or other consumption
in this state of taxable items used:
(A) for
the performance of a written contract executed prior to the effective date of
any local tax if the contract may not be modified because of the tax;
or
(B) pursuant to the obligation
of a bid or bids submitted prior to the effective date of any local tax if the
bid or bids and contract entered into pursuant thereto are at a fixed price and
not subject to withdrawal, change, or modification because of the
tax.
(2) Annexations. Any
annexation of territory into an existing local taxing jurisdiction is also a
basis for claiming the exemption provided by this subsection.
(3) Local taxing jurisdiction rate increase;
partial exemption for certain contracts and bids. When an existing local taxing
jurisdiction raises its sales and use tax rate, the additional amount of tax
that would be due as a result of the rate increase is not due on the sale, use,
storage, or other consumption in this state of taxable items used:
(A) for the performance of a written contract
executed prior to the effective date of the tax rate increase if the contract
may not be modified because of the tax; or
(B) pursuant to the obligation of a bid or
bids submitted prior to the effective date of the tax rate increase if the bid
or bids and contract entered into pursuant thereto are at a fixed price and not
subject to withdrawal, change, or modification because of the tax.
(4) Three-year statute of
limitations.
(A) The exemption in paragraph
(1) of this subsection and the partial exemption in paragraph (3) of this
subsection have no effect after three years from the date the adoption or
increase of the tax takes effect in the local taxing jurisdiction.
(B) The provisions of §
3.319 of this title apply to this
subsection to the extent they are consistent.
(C) Leases. Any renewal or exercise of an
option to extend the time of a lease or rental contract under the exemptions
provided by this subsection shall be deemed to be a new contract and no
exemption will apply.
(5)
Records. Persons claiming the exemption provided by this subsection must
maintain records which can be verified by the comptroller or the exemption will
be lost.
(6) Exemption certificate.
An identification number is required on the prior contract exemption
certificates furnished to sellers. The identification number should be the
person's 11-digit Texas taxpayer number or federal employer's identification
(FEI) number.
Notes
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