TAX CODE
SUBTITLE E. SALES, EXCISE, AND USE TAXES
CHAPTER 151. LIMITED SALES, EXCISE, AND USE TAX
SUBCHAPTER A. GENERAL PROVISIONS
§ 151.001. SHORT TITLE. This chapter may be cited as
the Limited Sales, Excise, and Use Tax Act.
Acts 1981, 67th Leg., p. 1545, ch. 389, § 1, eff. Jan. 1, 1982.
§ 151.002. APPLICABILITY OF DEFINITIONS, ETC. The
definitions and other provisions of this chapter relating to the
collection, administration, and enforcement of the taxes imposed by
this chapter, including the requirements for sales tax permits,
apply to the parties to a sale of a taxable item that is exempted
from the taxes imposed by this chapter but that is subject to the
taxes imposed by a city under Chapter 321 of this code.
Acts 1981, 67th Leg., p. 1545, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1989, 71st Leg., ch. 2, § 14.27(b)(1), eff. Aug.
28, 1989.
§ 151.0028. "AMUSEMENT SERVICES". (a) "Amusement
services" means the provision of amusement, entertainment, or
recreation, but does not include the provision of educational or
health services if prescribed by a licensed practitioner of the
healing arts for the primary purpose of education or health
maintenance or improvement.
(b) "Amusement services" includes membership in a private
club or organization that provides entertainment, recreational,
sports, dining, or social facilities to its members.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, § 3, eff.
Oct. 2, 1984. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art.
1, pt. 4, § 1.
§ 151.003. "BUSINESS". "Business" means an activity of
or caused by a person for the purpose of a direct or indirect gain,
benefit, or advantage.
Acts 1981, 67th Leg., p. 1545, ch. 389, § 1, eff. Jan. 1, 1982.
§ 151.0031. "COMPUTER PROGRAM". "Computer program"
means a series of instructions that are coded for acceptance or use
by a computer system and that are designed to permit the computer
system to process data and provide results and information. The
series of instructions may be contained in or on magnetic tapes,
punched cards, printed instructions, or other tangible or
electronic media.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, § 1, eff.
Oct. 2, 1984.
§ 151.0033. "CABLE TELEVISION SERVICE". "Cable
television service" means the distribution of video programming
with or without use of wires to subscribing or paying customers.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, § 4, eff.
Oct. 2, 1984.
§ 151.0034. "CREDIT REPORTING SERVICE". "Credit
reporting service" means assembling or furnishing credit history or
credit information relating to any person.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
2.
§ 151.0035. "DATA PROCESSING SERVICE". "Data
processing service" includes word processing, data entry, data
retrieval, data search, information compilation, payroll and
business accounting data production, the performance of a
totalisator service with the use of computational equipment
required by the Texas Racing Act (Article 179e, Vernon's Texas
Civil Statutes), and other computerized data and information
storage or manipulation. "Data processing service" also includes
the use of a computer or computer time for data processing whether
the processing is performed by the provider of the computer or
computer time or by the purchaser or other beneficiary of the
service. "Data processing service" does not include the
transcription of medical dictation by a medical transcriptionist.
"Data storage," as used in this section, does not include a
classified advertisement, banner advertisement, vertical
advertisement, or link when the item is displayed on an Internet
website owned by another person.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
3. Amended by Acts 1997, 75th Leg., ch. 1275, § 53, eff. Sept. 1,
1997; Acts 1997, 75th Leg., ch. 1040, § 11, eff. Sept. 1, 1997;
Acts 2003, 78th Leg., ch. 209, § 16, eff. Oct. 1, 2003.
§ 151.0036. "DEBT COLLECTION SERVICE". (a) "Debt
collection service" means activity to collect or adjust a
delinquent debt, to collect or adjust a claim, or to repossess
property subject to a claim.
(b) "Debt collection service" does not include:
(1) the collection of:
(A) a judgment by an attorney or by a partnership
or professional corporation of attorneys if the attorney,
partnership, or corporation represented the person in the suit from
which the judgment arose; or
(B) court-ordered child support or medical child
support; or
(2) a service provided by a person acting as a trustee
in connection with the foreclosure sale of real property under a
lien created by a mortgage, deed of trust, or security instrument.
(c) "Debt collection service" includes the service
performed for which a fee is collected under Section 3.506,
Business & Commerce Code. The person collecting the check shall add
the amount of the tax to the fee in accordance with Section 151.052
and shall collect the fee from the drawer or endorser of the check.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
4. Amended by Acts 1991, 72nd Leg., ch. 705, § 9, eff. Sept. 1,
1991; Acts 1995, 74th Leg., ch. 341, § 3.06, eff. Sept. 1, 1995;
Acts 1995, 74th Leg., ch. 1000, § 5, eff. Oct. 1, 1995; Acts
2001, 77th Leg., ch. 1151, § 1, 2(b), eff. July 1, 2001; Acts
2001, 77th Leg., ch. 1420, § 2.001(d), eff. Sept. 1, 2001.
§ 151.0038. "INFORMATION SERVICE". (a) "Information
service" means:
(1) furnishing general or specialized news or other
current information, including financial information, unless
furnished to:
(A) a newspaper or to a radio or television
station licensed by the Federal Communications Commission; or
(B) a member of a homeowners association of a
residential subdivision or condominium development, and is
furnished by the association or on behalf of the association; or
(2) electronic data retrieval or research.
(b) In this section, "newspaper" has the meaning assigned by
Section 151.319(f).
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
5. Amended by Acts 1991, 72nd Leg., ch. 705, § 10, eff. Sept. 1,
1991; Acts 1995, 74th Leg., ch. 1000, § 6, eff. Oct. 1, 1995.
§ 151.0039. "INSURANCE SERVICE". (a) "Insurance
service" means insurance loss or damage appraisal, insurance
inspection, insurance investigation, insurance actuarial analysis
or research, insurance claims adjustment or claims processing, or
insurance loss prevention service.
(b) "Insurance service" does not include insurance coverage
for which a premium is paid or commissions paid to insurance agents
for the sale of insurance or annuities.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
6.
§ 151.00393. INTERNET. "Internet" means collectively
the myriad of computer and telecommunications facilities,
including equipment and operating software, that comprise the
interconnected worldwide network of networks that employ the
Transmission Control Protocol/Internet Protocol, or any
predecessor or successor protocols to the protocol, to communicate
information of all kinds by wire or radio.
Added by Acts 1999, 76th Leg., ch. 394, § 1, eff. Oct. 1, 1999.
§ 151.00394. INTERNET ACCESS SERVICE. (a) "Internet
access service" means a service that enables users to access
content, information, electronic mail, or other services offered
over the Internet and may also include access to proprietary
content, information, and other services as part of a package of
services offered to consumers. The term does not include
telecommunications services.
(b) "Internet access service" does not include and the
exemption under Section 151.325 does not apply to any other taxable
service listed in Section 151.0101(a), unless the taxable service
is provided in conjunction with and is merely incidental to the
provision of Internet access service.
(c) On and after October 1, 1999, "Internet access service"
is not included in the definitions of "data processing service" and
"information service."
Added by Acts 1999, 76th Leg., ch. 394, § 1, eff. Oct. 1, 1999.
§ 151.004. "IN THIS STATE". "In this state" means
within the exterior limits of Texas and includes all territory
within these limits ceded to or owned by the United States.
Acts 1981, 67th Leg., p. 1545, ch. 389, § 1, eff. Jan. 1, 1982.
§ 151.0045. "PERSONAL SERVICES". "Personal services"
means those personal services listed as personal services under
Group 721, Major Group 72 of the Standard Industrial Classification
Manual, 1972, and includes massage parlors, escort services, and
Turkish baths under Group 729 of said manual but does not include
any other services listed under Group 729 unless otherwise covered
under this Act, prepared by the statistical policy division of the
office on management and budget, office of the president of the
United States.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, § 5, eff.
Oct. 2, 1984.
§ 151.0047. "REAL PROPERTY REPAIR AND
REMODELING". (a) "Real property repair and remodeling" means the
repair, restoration, remodeling, or modification of an improvement
to real property other than:
(1) a structure or separate part of a structure used as
a residence;
(2) an improvement immediately adjacent to a structure
described by Subdivision (1) of this section and used in the
residential occupancy of the structure or separate part of the
structure by the person using the structure or part as a residence;
or
(3) an improvement to a manufacturing or processing
production unit in a petrochemical refinery or chemical plant that
provides increased capacity in the production unit.
(b) In this section:
(1) "Increased capacity" means the capability to
produce:
(A) additional products or services as measured
by units per hour or units per year; or
(B) a new product or service.
(2) "Production unit" means a group of manufacturing
and processing machines and ancillary equipment that together are
necessary to create or produce a physical or chemical change
beginning with the first processing of the raw material and ending
with the finished product.
(3) "New product" means a product that:
(A) has different product properties and a
different commercial application than the product previously
manufactured or processed by the production unit that produced the
previous product; and
(B) is not created by straining or purifying an
existing product or by making cosmetic changes, such as adding or
removing color or odor, to or from an existing product.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
7. Amended by Acts 1991, 72nd Leg., ch. 705, § 11, eff. Sept. 1,
1991; Acts 1995, 74th Leg., ch. 1000, § 7, eff. Oct. 1, 1995;
Acts 1997, 75th Leg., ch. 1040, § 12, eff. Sept. 1, 1997.
§ 151.0048. REAL PROPERTY SERVICE. (a) Except as
provided by Subsection (b), "real property service" means:
(1) landscaping;
(2) the care and maintenance of lawns, yards, or
ornamental trees or other plants;
(3) the removal or collection of garbage, rubbish, or
other solid waste other than:
(A) hazardous waste;
(B) industrial solid waste;
(C) waste material that results from an activity
associated with the exploration, development, or production of oil,
gas, geothermal resources, or any other substance or material
regulated by the Railroad Commission of Texas under Section 91.101,
Natural Resources Code;
(D) domestic sewage or an irrigation return flow,
to the extent the sewage or return flow does not constitute garbage
or rubbish; and
(E) industrial discharges subject to regulation
by permit issued pursuant to Chapter 26, Water Code;
(4) building or grounds cleaning, janitorial, or
custodial services;
(5) a structural pest control service covered by
Section 1951.003, Occupations Code; or
(6) the surveying of real property.
(b) "Real property service" does not include a service
listed under Subsection (a) if the service is purchased by a
contractor as part of the improvement of real property with a new
structure to be used as a residence or other improvement
immediately adjacent to the new structure and used in the
residential occupancy of the structure.
(c) In this section, "contractor" means a person who makes
an improvement on real estate and who, as a necessary or incidental
part of the service, incorporates tangible personal property into
the property improved. The term includes a builder, developer,
speculative builder, or other person acting as a builder to improve
residential real property.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
8. Amended by Acts 1991, 72nd Leg., ch. 705, § 12, eff. Sept. 1,
1991; Acts 1993, 73rd Leg., ch. 1031, § 19, eff. Sept. 1, 1993;
Acts 1995, 74th Leg., ch. 1000, § 7, eff. Oct. 1, 1995; Acts
1997, 75th Leg., ch. 1040, § 13, eff. Sept. 1, 1997; Acts 1999,
76th Leg., ch. 1114, § 1.01, eff. Oct. 1, 1999; Acts 1999, 76th
Leg., ch. 1114, § 2.01, eff. Oct. 1, 2001; Acts 2003, 78th Leg.,
ch. 1276, § 14A.815, eff. Sept. 1, 2003.
§ 151.005. "SALE" OR "PURCHASE". "Sale" or "purchase"
means any of the following when done or performed for
consideration:
(1) a transfer of title or possession of tangible
personal property;
(2) the exchange, barter, lease, or rental of tangible
personal property;
(3) the performance of a taxable service, the charge
for an extended warranty or service contract for the performance of
a taxable service, or, in the case of an amusement service, a
transfer of title to or possession of a ticket or other admission
document, the collection of an admission fee, whether by individual
performance, subscription series, or membership privilege, the
collection of dues or a fee, charge, or assessment, including an
initiation fee, by a club or organization for membership or a
special privilege, status, or membership classification in the club
or organization, or the use of a coin-operated machine;
(4) the production, fabrication, processing,
printing, or imprinting of tangible personal property for consumers
who directly or indirectly furnish the materials used in the
production, fabrication, processing, printing, or imprinting;
(5) the furnishing and distribution of tangible
personal property by a social club or fraternal organization to
anyone;
(6) the furnishing, preparation, or service of food,
meals, or drinks;
(7) a transfer of the possession of tangible personal
property if the title to the property is retained by the seller as
security for the payment of the price; or
(8) a transfer of the title or possession of tangible
personal property that has been produced, fabricated, or printed to
the special order of the customer.
Acts 1981, 67th Leg., p. 1545, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, § 6,
eff. Oct. 2, 1984; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1,
pt. 4, § 15; Acts 2003, 78th Leg., ch. 209, § 17, eff. Oct. 1,
2003.
§ 151.006. "SALE FOR RESALE". "Sale for resale" means a
sale of:
(1) tangible personal property or a taxable service to
a purchaser who acquires the property or service for the purpose of
reselling it in the United States of America or a possession or
territory of the United States of America or in the United Mexican
States in the normal course of business in the form or condition in
which it is acquired or as an attachment to or integral part of
other tangible personal property or taxable service;
(2) tangible personal property to a purchaser for the
sole purpose of the purchaser's leasing or renting it in the United
States of America or a possession or territory of the United States
of America or in the United Mexican States to another person, but
not if incidental to the leasing or renting of real estate;
(3) tangible personal property to a purchaser who
acquires the property for the purpose of transferring it in the
United States of America or a possession or territory of the United
States of America or in the United Mexican States as an integral
part of a taxable service; or
(4) a taxable service performed on tangible personal
property that is held for sale by the purchaser of the taxable
service.
Acts 1981, 67th Leg., p. 1546, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, § 7,
eff. Oct. 2, 1984; Acts 1995, 74th Leg., ch. 351, § 1, eff. Sept.
1, 1995.
§ 151.007. "SALES PRICE" OR "RECEIPTS". (a) Except as
provided by Subsections (c) and (d), "sales price" or "receipts"
means the total amount for which a taxable item is sold, leased, or
rented, valued in money, without a deduction for the cost of:
(1) the taxable item sold, leased, or rented;
(2) the materials used, labor or service employed,
interest, losses, or other expenses;
(3) the transportation or installation of tangible
personal property; or
(4) transportation incident to the performance of a
taxable service.
(b) The total amount for which a taxable item is sold,
leased, or rented includes a service that is a part of the sale and
the amount of credit given to the purchaser by the seller.
(c) "Sales price" or "receipts" does not include any of the
following if separately identified to the customer by such means as
an invoice, billing, sales slip or ticket, or contract:
(1) a cash discount allowed on the sale;
(2) the amount charged for tangible personal property
returned by a customer if the total amount charged is refunded by
cash or credit;
(3) a refund of the charges for the performance of a
taxable service;
(4) finance, carrying and service charges, or interest
from credit extended on sales of taxable items under a conditional
sales contract or other contract providing for the deferred payment
of the purchase price;
(5) the value of tangible personal property that:
(A) is taken by a seller in trade as all or part
of the consideration for a sale of a taxable item; and
(B) is of a type of property sold by the seller in
the regular course of business;
(6) the face value of United States coin or currency in
a sale of that coin or currency in which the total consideration
given by the purchaser exceeds the face value of the coin or
currency; or
(7) a voluntary gratuity or a reasonable mandatory
charge for the service of a meal or food products, including soft
drinks and candy, for immediate human consumption when the service
charge is separated from the sales price of the meal or food product
and identified as a gratuity or tip and when the total amount of the
service charge is disbursed by the employer to employees who
customarily and regularly provide the service.
(d) "Sales price" or "receipts" of items sold as edible
products for human consumption through the use or operation of a
money-operated vending machine is 50 percent of the total gross
receipts of the vendor from sales of those items, except for sales
of soft drinks and candy, for which the "sales price" or "receipts"
are the total gross receipts from those sales.
(e) The sales price of membership in a private club or
organization consists of the dues, fees, and other charges and
assessments, including initiation fees, required for membership or
a special privilege, status, or membership classification in the
club or organization.
Acts 1981, 67th Leg., p. 1546, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, § 8,
eff. Oct. 2, 1984; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1,
pt. 4, § 9; Acts 1997, 75th Leg., ch. 1040, § 14, eff. Oct. 1,
1997; Acts 2001, 77th Leg., ch. 1263, § 12, eff. Oct. 1, 2001.
§ 151.0075. "SECURITY SERVICE". "Security service"
means service for which a license is required under Section
1702.101 or 1702.102, Occupations Code.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
10. Amended by Acts 2001, 77th Leg., ch. 1420, § 14.837, eff.
Sept. 1, 2001.
§ 151.008. "SELLER" OR "RETAILER". (a) "Seller" or
"retailer" means a person engaged in the business of making sales of
taxable items of a kind the receipts from the sale of which are
included in the measure of the sales or use tax imposed by this
chapter.
(b) "Seller" and "retailer" include:
(1) a person in the business of making sales at auction
of tangible personal property owned by the person or by another;
(2) a person who makes more than two sales of taxable
items during a 12-month period, including sales made in the
capacity of an assignee for the benefit of creditors or receiver or
trustee in bankruptcy;
(3) a person regarded by the comptroller as a seller or
retailer under Section 151.024 of this code;
(4) a hotel, motel, or owner or lessor of an office or
residential building or development that contracts and pays for
telecommunications services for resale to guests or tenants; and
(5) a person who engages 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.
Acts 1981, 67th Leg., p. 1547, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1985, 69th Leg., ch. 206, § 2, eff. Oct. 1, 1985;
Acts 1991, 72nd Leg., 1st C.S., ch. 5, § 14.13.
§ 151.009. "TANGIBLE PERSONAL PROPERTY". "Tangible
personal property" means personal property that can be seen,
weighed, measured, felt, or touched or that is perceptible to the
senses in any other manner, and, for the purposes of this chapter,
the term includes a computer program and a telephone prepaid
calling card.
Acts 1981, 67th Leg., p. 1547, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, § 2,
eff. Oct. 2, 1984; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1,
pt. 4, § 11; Acts 1997, 75th Leg., ch. 1040, § 16, eff. Sept.
1, 1997.
§ 151.010. TAXABLE ITEM. "Taxable item" means tangible
personal property and taxable services. Except as otherwise
provided by this chapter, the sale or use of a taxable item in
electronic form instead of on physical media does not alter the
item's tax status.
Acts 1981, 67th Leg., p. 1547, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, § 1,
eff. Oct. 2, 1984; Acts 2001, 77th Leg., ch. 1263, § 13, eff.
Oct. 1, 2001.
§ 151.0101. "TAXABLE SERVICES". (a) "Taxable
services" means:
(1) amusement services;
(2) cable television services;
(3) personal services;
(4) motor vehicle parking and storage services;
(5) the repair, remodeling, maintenance, and
restoration of tangible personal property, except:
(A) aircraft;
(B) a ship, boat, or other vessel, other than:
(i) a taxable boat or motor as defined by
Section 160.001;
(ii) a sports fishing boat; or
(iii) any other vessel used for pleasure;
(C) the repair, maintenance, and restoration of a
motor vehicle; and
(D) the repair, maintenance, creation, and
restoration of a computer program, including its development and
modification, not sold by the person performing the repair,
maintenance, creation, or restoration service;
(6) telecommunications services;
(7) credit reporting services;
(8) debt collection services;
(9) insurance services;
(10) information services;
(11) real property services;
(12) data processing services;
(13) real property repair and remodeling;
(14) security services;
(15) telephone answering services;
(16) Internet access service; and
(17) a sale by a transmission and distribution
utility, as defined in Section 31.002, Utilities Code, of
transmission or delivery of service directly to an electricity
end-use customer whose consumption of electricity is subject to
taxation under this chapter.
(b) The comptroller shall have exclusive jurisdiction to
interpret Subsection (a) of this section.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, § 2, eff.
Oct. 2, 1984. Amended by Acts 1985, 69th Leg., ch. 206, § 3, eff.
Oct. 1, 1985; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4,
§ 12; Acts 1989, 71st Leg., ch. 1249, § 1, eff. Oct. 1, 1989;
Acts 1991, 72nd Leg., 1st C.S., ch. 5, § 14.021(a); Acts 1999,
76th Leg., ch. 394, § 2, eff. Oct. 1, 1999; Acts 1999, 76th Leg.,
ch. 405, § 54, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch.
1420, § 18.008, eff. Sept. 1, 2001.
§ 151.0102. "TELEPHONE ANSWERING SERVICES". "Telephone
answering services" means the receiving and relaying of telephone
messages by a human operator. The term does not include the
automated receiving and relaying of telephone messages included
within the definition of "telecommunications services" under
Section 151.0103.
Added by Acts 1991, 72nd Leg., 1st C.S., ch. 5, § 14.031.
§ 151.0103. TELECOMMUNICATIONS SERVICES. For the
purposes of this title only, "telecommunications services" means
the electronic or electrical transmission, conveyance, routing, or
reception of sounds, signals, data, or information utilizing wires,
cable, radio waves, microwaves, satellites, fiber optics, or any
other method now in existence or that may be devised, including but
not limited to long-distance telephone service. The term does not
include:
(1) the storage of data or information for subsequent
retrieval or the processing, or reception and processing, of data
or information intended to change its form or content;
(2) the sale or use of a telephone prepaid calling
card; or
(3) Internet access service.
Added by Acts 1985, 69th Leg., ch. 206, § 4, eff. Oct. 1, 1985.
Amended by Acts 1997, 75th Leg., ch. 1040, § 17, eff. Sept. 1,
1997; Acts 1999, 76th Leg., ch. 394, § 3, eff. Oct. 1, 1999.
§ 151.01032. "TELEPHONE PREPAID CALLING
CARD.". "Telephone prepaid calling card" means a card or other
item, including an access code, that represents the right to make
one or more telephone calls for which payment is made in incremental
amounts and before the call is initiated. The term "telephone
prepaid calling card" does not include a card sold by mechanical
means for consideration of one dollar or less.
Added by Acts 1997, 75th Leg., ch. 1040, § 15, eff. Sept. 1,
1997.
§ 151.0104. TELEPHONE COMPANY. For the purposes of this
chapter, "telephone company" means a person that owns or operates a
telephone line or telephone in this state and charges for its use.
Added by Acts 1985, 69th Leg., ch. 206, § 4, eff. Oct. 1, 1985.
Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
13.
§ 151.011. "USE" AND "STORAGE". (a) Except as
provided by Subsection (c) of this section, "use" means the
exercise of a right or power incidental to the ownership of tangible
personal property over tangible personal property, including
tangible personal property other than printed material that has
been processed, fabricated, or manufactured into other property or
attached to or incorporated into other property transported into
this state, and, except as provided by Section 151.056(b) of this
code, includes the incorporation of tangible personal property into
real estate or into improvements of real estate whether or not the
real estate is subsequently sold.
(b) With respect to a taxable service, "use" means the
derivation in this state of direct or indirect benefit from the
service.
(c) "Use" does not include the sale of tangible personal
property or a taxable service in the regular course of business, the
transfer of a taxable service as an integral part of the transfer of
tangible personal property in the regular course of business, or
the transfer of tangible personal property as an integral part of
the transfer of a taxable service in the regular course of business.
(d) Except as provided by Subsection (e) of this section,
"storage" means the keeping or retaining for any purpose in this
state of tangible personal property sold by a retailer.
(e) "Storage" does not include the keeping or retaining of
tangible personal property for sale in the regular course of
business.
(f) Neither "use" nor "storage" includes the exercise of a
right or power over or the keeping or retaining of tangible personal
property for the purpose of:
(1) transporting the property outside the state for
use solely outside the state; or
(2) processing, fabricating, or manufacturing the
property into other property or attaching the property to or
incorporating the property into other property to be transported
outside the state for use solely outside the state.
Acts 1981, 67th Leg., p. 1547, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
14; Acts 1989, 71st Leg., ch. 323, § 1, eff. Oct. 1, 1989; Acts
2003, 78th Leg., ch. 1310, § 97, eff. Oct. 1, 2003.
§ 151.012. EFFECTIVE DATE OF TAX RATE CHANGES. (a) A
change in the rate of the tax imposed under Sections 151.051 and
151.101 must take effect on the first day of a calendar quarter.
(b) If the performance of a taxable service begins before
the effective date of a change in the tax rate and the performance
will not be completed until after that effective date, the change in
the tax rate applies to the first billing period for the service
performed on or after that effective date.
Added by Acts 2003, 78th Leg., ch. 1310, § 98, eff. Oct. 1, 2003.
SUBCHAPTER B. ADMINISTRATION AND RECORDS
§ 151.021. EMPLOYEES. The comptroller may employ
accountants, auditors, investigators, assistants, and clerks for
the administration of this chapter and may delegate to employees
the authority to conduct hearings, prescribe rules, and perform
other duties required by this chapter.
Acts 1981, 67th Leg., p. 1548, ch. 389, § 1, eff. Jan. 1, 1982.
§ 151.022. RETROACTIVE EFFECT OF RULES. The
comptroller may prescribe the extent to which a rule or ruling shall
be applied without retroactive effect.
Acts 1981, 67th Leg., p. 1548, ch. 389, § 1, eff. Jan. 1, 1982.
§ 151.023. INVESTIGATIONS AND AUDITS. (a) The
comptroller, or another person authorized by the comptroller in
writing, may examine, copy, and photograph the books, records,
papers, and equipment of a person who sells taxable items or of a
person liable for the use tax and may investigate the character of
the business of the person to verify the accuracy of the person's
report or to determine the amount of tax that may be required to be
paid if no report has been filed.
(b) For the purpose of determining the amount of tax
collected and payable to the state, the amount of tax accruing and
due, and whether a tax liability has been incurred under this
chapter, the comptroller or a person authorized by the comptroller
may:
(1) inspect at any time during business hours any
business premises where a taxable event has occurred and examine,
copy, and photograph the books, returns, records, papers, and
equipment relating to the conduct in question; and
(2) require by delivery of written notice to the
taxpayer or to an employee, representative, or agent of the
taxpayer that, not later than the 10th working day after the date
the notice is delivered, the taxpayer produce to an agent or
designated representative of the comptroller for inspection the
books, records, papers, and returns relating to the taxable
activity stated in the notice.
Acts 1981, 67th Leg., p. 1548, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 2001, 77th Leg., ch. 442, § 9, eff. Sept. 1,
2001.
§ 151.0231. MANAGED AUDITS. (a) In this section,
"managed audit" means a review and analysis of invoices, checks,
accounting records, or other documents or information to determine
a taxpayer's liability for tax under this chapter.
(b) A managed audit may be limited to certain categories of
liability under this chapter, including tax on:
(1) sales of one or more types of taxable items;
(2) purchases of assets;
(3) purchases of expense items;
(4) purchases under a direct payment permit; or
(5) any other category specified in an agreement
authorized by this section.
(c) The comptroller may, in a written agreement, authorize a
taxpayer to conduct a managed audit under this section. The
agreement must:
(1) be signed by an authorized representative of the
comptroller and the taxpayer; and
(2) specify the period to be audited and the procedure
to be followed.
(d) In determining whether to authorize a managed audit, the
comptroller may consider, in addition to other factors the
comptroller considers relevant:
(1) the taxpayer's history of tax compliance;
(2) the amount of time and resources the taxpayer has
available to dedicate to the audit;
(3) the extent and availability of the taxpayer's
records; and
(4) the taxpayer's ability to pay any expected
liability.
(e) The decision to authorize or not authorize a managed
audit rests solely with the comptroller.
(f) The comptroller may examine records and perform reviews
that the comptroller determines are necessary before the audit is
finalized to verify the results of the audit.
(g) Unless the audit or information reviewed by the
comptroller under Subsection (f) discloses fraud or wilful evasion
of the tax, the comptroller may not assess a penalty and may waive
all or part of the interest that would otherwise accrue on any
amount identified to be due in a managed audit. This subsection
does not apply to any amount collected by the taxpayer that was a
tax or represented to be a tax but that was not remitted to this
state.
(h) Except as provided by Section 111.104(f), the taxpayer
is entitled to a refund of any tax overpayment disclosed by a
managed audit under this section.
Added by Acts 1999, 76th Leg., ch. 457, § 1, eff. Oct. 1, 1999.
§ 151.0232. CPA AUDIT PROGRAM. (a) The comptroller by
rule may establish a program in which a taxpayer may hire a
certified public accountant who is not employed by the comptroller
to perform an audit to determine a taxpayer's liability for a tax
imposed under this chapter.
(b) A program established under Subsection (a) must
include:
(1) eligibility requirements for taxpayer
participation;
(2) training requirements and qualifications for a
certified public accountant who is hired to perform an audit under
the program; and
(3) safeguards to protect the confidentiality of
information used in connection with the audit, including a
provision that a certified public accountant hired under the
program is subject to the requirements and penalties that apply to
an employee of the comptroller regarding the confidentiality and
disclosure of information obtained from an audit.
(c) Unless the audit or other information available to the
comptroller discloses fraud or wilful evasion of the tax, the
comptroller may not assess a penalty and may waive all or part of
the accrued interest on an amount identified to be due as a result
of an audit performed under Subsection (a).
Added by Acts 2001, 77th Leg., ch. 743, § 1, eff. June 13, 2001.
§ 151.024. PERSONS WHO MAY BE REGARDED AS RETAILERS. If
the comptroller determines that it is necessary for the efficient
administration of this chapter to regard a salesman,
representative, peddler, or canvasser as the agent of a dealer,
distributor, supervisor, or employer under whom he operates or from
whom he obtains the tangible personal property that he sells,
whether or not the sale is made in his own behalf or for the dealer,
distributor, supervisor, or employer, the comptroller may so regard
the salesman, representative, peddler, or canvasser, and may regard
the dealer, distributor, supervisor, or employer as a retailer or
seller for the purpose of this chapter.
Acts 1981, 67th Leg., p. 1548, ch. 389, § 1, eff. Jan. 1, 1982.
§ 151.025. RECORDS REQUIRED TO BE KEPT. (a) All
sellers and all other persons storing, using, or consuming in this
state a taxable item purchased from a retailer shall keep the
following records in the form the comptroller requires:
(1) records of gross receipts, including
documentation in the form of receipts, shipping manifests,
invoices, and other pertinent papers, from each rental, lease,
taxable service, and taxable labor transaction occurring during
each reporting period;
(2) records in the form of receipts, shipping
manifests, invoices, and other pertinent papers of all purchases of
taxable items from every source made during each reporting period;
and
(3) records in the form of receipts, shipping
manifests, invoices, and other pertinent papers that substantiate
each claimed deduction or exclusion authorized by law.
(b) A record required by Subsection (a) of this section
shall be kept for not less than four years from the day that it is
made unless the comptroller authorizes its destruction at an
earlier date.
(c) Repealed by Acts 2003, 78th Leg., ch. 1310, § 121(26)
and Acts 2003, 78th Leg., ch. 209, § 86(b).
(d) If any nontaxable charges are combined with and not
separately stated from taxable telecommunications service charges
on the customer bill or invoice of a provider of telecommunications
services, the combined charge is subject to tax unless the provider
can identify the portion of the charges that are nontaxable through
the provider's books and records kept in the regular course of
business. If the nontaxable charges cannot reasonably be
identified, the charges from the sale of both nontaxable services
and taxable telecommunications services are attributable to
taxable telecommunications services. The provider of
telecommunications services has the burden of proving nontaxable
charges.
Acts 1981, 67th Leg., p. 1548, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1985, 69th Leg., ch. 206, § 5, eff. Oct. 1, 1985;
Acts 2001, 77th Leg., ch. 442, § 10, eff. Sept. 1, 2001; Acts
2003, 78th Leg., ch. 1310, § 99, 121(26), eff. July 1, 2003;
Acts 2003, 78th Leg., ch. 209, § 86(a), (b), eff. Oct. 1, 2003.
§ 151.026. OUT-OF-STATE RECORDS. A taxpayer is
entitled to keep or store the taxpayer's records outside this
state. If the comptroller requests to examine a record kept or
stored outside this state, the taxpayer shall bring the record into
this state for the examination or permit the comptroller to examine
the record at the out-of-state location.
Acts 1981, 67th Leg., p. 1549, ch. 389, § 1, eff. Jan. 1, 1982.
§ 151.027. CONFIDENTIALITY OF TAX
INFORMATION. (a) Information in or derived from a record,
report, or other instrument required to be furnished under this
chapter is confidential and not open to public inspection, except
for information set forth in a lien filed under this title or a
permit issued under this chapter to a seller and except as provided
by Subsection (c) of this section.
(b) Information secured, derived, or obtained during the
course of an examination of a taxpayer's books, records, papers,
officers, or employees, including the business affairs,
operations, profits, losses, and expenditures of the taxpayer, is
confidential and not open to public inspection except as provided
by Subsection (c) of this section.
(c) This section does not prohibit:
(1) the examination of information, if authorized by
the comptroller, by another state officer or law enforcement
officer, by a tax official of another state, by a tax official of
the United Mexican States, or by an official of the United States if
a reciprocal agreement exists;
(2) the delivery to a taxpayer, or a taxpayer's
authorized representative, of a copy of a report or other paper
filed by the taxpayer under this chapter;
(3) the publication of statistics classified to
prevent the identification of a particular report or items in a
particular report;
(4) the use of records, reports, or information
secured, derived, or obtained by the attorney general or the
comptroller in an action under this chapter against the same
taxpayer who furnished the information;
(5) the delivery to a successor, receiver, executor,
administrator, assignee, or guarantor of a taxpayer of information
about items included in the measure and amounts of any unpaid tax or
amounts of tax, penalties, and interest required to be collected;
(6) the delivery of information to an eligible
municipality in accordance with Section 321.3022; or
(7) the release of information in or derived from a
record, report, or other instrument required to be furnished under
this chapter by a governmental body, as that term is defined in
Section 552.003, Government Code.
Acts 1981, 67th Leg., p. 1549, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1995, 74th Leg., ch. 351, § 3, eff. Sept. 1,
1995; Acts 1995, 74th Leg., ch. 1000, § 69, eff. Oct. 1, 1995;
Acts 1999, 76th Leg., ch. 1218, § 3, eff. Sept. 1, 1999.
§ 151.029. REMEDIES NOT EXCLUSIVE. An action taken by
the comptroller or the attorney general under this chapter is not an
election to pursue one remedy to the exclusion of any other remedy
authorized by this chapter.
Acts 1981, 67th Leg., p. 1549, ch. 389, § 1, eff. Jan. 1, 1982.
SUBCHAPTER C. IMPOSITION AND COLLECTION OF SALES TAX
§ 151.051. SALES TAX IMPOSED. (a) A tax is imposed on
each sale of a taxable item in this state.
(b) The sales tax rate is 6-1/4 percent of the sales price of
the taxable item sold.
Added by Acts 1981, 67th Leg., p. 1550, ch. 389, eff. Jan. 1, 1982.
Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 13, § 1,
eff. Oct. 2, 1984; Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1,
§ 1, eff. Jan. 1, 1987; Acts 1987, 70th Leg., 2nd C.S., ch. 5,
art. 1, pt. 1, § 1; Acts 1990, 71st Leg., 6th C.S., ch. 5, §
1.01, eff. July 1, 1990.
§ 151.0515. TEXAS EMISSIONS REDUCTION PLAN SURCHARGE.
Text of section effective until September 30, 2008
(a) In this section, "equipment" includes all off-road,
heavy-duty diesel equipment, other than implements of husbandry
used solely for agricultural purposes, including:
(1) pavers;
(2) tampers/rammers;
(3) plate compactors;
(4) concrete pavers;
(5) rollers;
(6) scrapers;
(7) paving equipment;
(8) surface equipment;
(9) signal boards/light plants;
(10) trenchers;
(11) bore/drill rigs;
(12) excavators;
(13) concrete/industrial saws;
(14) cement and mortar mixers;
(15) cranes;
(16) graders;
(17) off-highway trucks;
(18) crushing/processing equipment;
(19) rough terrain forklifts;
(20) rubber tire loaders;
(21) rubber tire tractors/dozers;
(22) tractors/loaders/backhoes;
(23) crawler tractors/dozers;
(24) skid steer loaders;
(25) off-highway tractors;
(26) Dumpsters/tenders; and
(27) mining equipment.
(b) In each county in this state, a surcharge is imposed on
the retail sale, lease, or rental of new or used equipment in an
amount equal to two percent of the sale price or the lease or rental
amount.
(b-1) In each county in this state, a surcharge is imposed
on the storage, use, or other consumption in this state of new or
used equipment. The surcharge is at the same percentage rate as is
provided by Subsection (b) on the sales price or the lease or rental
amount of the equipment.
(c) The surcharge shall be collected at the same time and in
the same manner and shall be administered and enforced in the same
manner as the tax imposed under this chapter. The comptroller shall
adopt any additional procedures needed for the collection,
administration, and enforcement of the surcharge authorized by this
section and shall deposit all remitted surcharges to the credit of
the Texas emissions reduction plan fund.
(d) This section expires September 30, 2008.
Added by Acts 2001, 77th Leg., ch. 967, § 2, eff. Sept. 1, 2001.
Amended by Acts 2003, 78th Leg., ch. 1331, § 21, eff. July 1,
2003.
§ 151.052. COLLECTION BY RETAILER. (a) Except as
provided by Subsection (d), a seller who makes a sale subject to the
sales tax imposed by this chapter shall add the amount of the tax to
the sales price, and when the amount of the tax is added:
(1) it becomes a part of the sales price;
(2) it is a debt of the purchaser to the seller until
paid; and
(3) if unpaid, it is recoverable at law in the same
manner as the original sales price.
(b) The owner or former owner of tangible personal property,
a factor of the owner or former owner, or an agent of the owner,
former owner, or factor shall collect the sales tax and add the
amount of the tax to the sales price of the tangible personal
property if the person delivers the property to a consumer in this
state or to another person for redelivery to a consumer in this
state under a sale of the property that is not a sale for resale and
that is made by a seller not engaged in business in this state.
(c) When several taxable items are sold together and at the
same time, the sales tax is determined on the sum of the sales
prices of the items sold exclusive of any item the sale of which is
exempted by this chapter.
(d) For purposes of the printer's tax collection duty, it is
presumed that printed materials that are distributed by the United
States Postal Service singly or in sets addressed to individual
recipients, other than the purchaser, and that are either produced
at a printer's facility in this state or purchased in this state are
for use in Texas and the printer must collect the tax imposed under
this chapter. In order to overcome this presumption a purchaser of
printed materials that are distributed by the United States Postal
Service singly or in sets addressed to individual recipients, other
than the purchaser, is required to issue an exemption certificate
to the printer if the printed materials are for distribution to both
in-state and out-of-state recipients. The certificate must contain
the statement that the printed materials are for multistate use and
that the purchaser agrees to pay to this state all taxes that are or
may become due to the state on the taxable items purchased under the
exemption certificate. In this subsection, "printed materials" is
defined to be materials that are produced by web offset or
rotogravure printing processes. A printer is relieved of the
obligation of collecting the taxes imposed by this chapter on
printed materials that are distributed by the United States Postal
Service singly or in sets addressed to individual recipients, other
than the purchaser, but is required to file a report as provided by
Section 151.407.
Acts 1981, 67th Leg., p. 1550, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 2001, 77th Leg., ch. 397, § 1, eff. Sept. 1,
2001.
§ 151.053. SALES TAX BRACKETS. (a) If the sales price
involves a fraction of a dollar, the sales tax to be added to the
sales price shall be computed by multiplying the percentage rate of
the sales tax times the amount of the sale. A fraction of one cent
that is less than one-half of one cent is not collected and a
fraction of one cent that is equal to one-half of one cent or more is
collected as one cent of tax.
(b) The comptroller may publish schedules and brackets of
amounts of taxes based on the formula provided by Subsection (a) of
this section for use in the collection of the taxes imposed by this
chapter.
Acts 1981, 67th Leg., p. 1550, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 13, § 2,
eff. Oct. 2, 1984; Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1,
§ 2, eff. Jan. 1, 1987; Acts 1987, 70th Leg., 2nd C.S., ch. 5,
art. 1, pt. 3, § 1.
§ 151.054. GROSS RECEIPTS PRESUMED SUBJECT TO
TAX. (a) Except as provided by Subsection (d) of this section,
all gross receipts of a seller are presumed to have been subject to
the sales tax unless a properly completed resale or exemption
certificate is accepted by the seller.
(b) A sale is exempt if the seller receives in good faith
from a purchaser, who is in the business of selling, leasing, or
renting taxable items, a resale certificate stating that the
tangible personal property or service is acquired for the purpose
of selling, leasing, or renting it in the regular course of business
or for the purpose of transferring it as an integral part of a
taxable service performed in the regular course of business.
(c) A sale is exempt if the seller receives in good faith
from a purchaser an exemption certificate stating qualifications
for an exemption provided in Subchapter H of this chapter.
(d) A sale of liquor, wine, beer, or malt liquor by the
holder of a manufacturer's license, wholesaler's permit, general
class B wholesaler's permit, local class B wholesaler's permit,
local distributor's permit, or a general, local, or branch
distributor's license issued under the Alcoholic Beverage Code to
the holder of a retail license or permit issued under the Alcoholic
Beverage Code is presumed to be a sale for resale. In a sale to
which this section applies, the seller is not required to receive a
resale certificate from the purchaser.
(e) Properly completed resale or exemption certificates
should be in the possession of the seller at the time the nontaxable
transaction occurs. If the seller is not in possession of these
certificates within 60 days from the date written notice requiring
possession of them is given to the seller by the comptroller,
deductions claimed by the seller that require delivery of the
certificates shall be disallowed. If the seller delivers the
certificates to the comptroller within the 60-day period, the
comptroller may verify the reason or basis for exemption claimed in
the certificates before allowing any deductions. A deduction may
not be granted on the basis of certificates delivered to the
comptroller after the 60-day period.
Acts 1981, 67th Leg., p. 1550, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 15, § 2,
eff. Oct. 2, 1984; Acts 1985, 69th Leg., ch. 206, § 6, eff. Oct.
1, 1985; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
16.
§ 151.055. SALES OF ITEMS ACQUIRED FOR LEASE OR
RENTAL. (a) If a person purchases tangible personal property by
means of a sale for resale for the purpose of renting or leasing the
property for use but subsequently sells the property in an
occasional sale before the person has collected and paid to the
state an amount of sales tax on rental or lease charges equal to the
amount of sales tax that would have been due if the person had not
acquired the property at a sale for resale, the person at the time
of the occasional sale shall include in his receipts from taxable
sales the amount by which the purchase price of the item at the
occasional sale exceeds the amount received from renting or leasing
the property.
(b) If tangible personal property is rented or leased under
an agreement that provides that all or a portion of the rental or
lease payments may be credited against the purchase price of the
item, the lessor shall collect the sales tax on the sales price,
including the sum of all lease or rental payments for the term of
the lease or rental, at the time the purchaser takes possession of
the property or when the first payment is due, whichever period is
the earlier. If the purchaser-lessee returns the taxable item to
the seller-lessor before the end of the lease or rental period
without having acquired title to the property, the seller-lessor
may take a credit against other taxes due under this chapter or
claim a refund as provided by this code for an amount equal to the
amount of the taxes paid on the unpaid portion of the sales price.
Acts 1981, 67th Leg., p. 1551, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 9, § 2,
eff. Oct. 2, 1984.
§ 151.056. PROPERTY CONSUMED IN CONTRACTS TO IMPROVE
REAL PROPERTY. (a) A contractor is the consumer of tangible
personal property furnished by him and incorporated into the
property of his customer if the contract between the contractor and
his customer contains a lump-sum price covering both the
performance of the service and the furnishing of the necessary
incidental material.
(b) A contractor is the seller of tangible personal property
furnished by him and incorporated into the property of his
customer, from whom he shall collect the tax, if the contract
between the contractor and his customer contains separate amounts
for the performance of the service and for the furnishing of the
necessary incidental material. The tax rate is applied to the price
of the materials as agreed in the contract or the price of the
materials to the contractor, whichever is the greater.
(c) If a contractor has paid the sales tax to his supplier
when the tangible personal property is purchased, the contractor
may credit the amount of the tax paid to the supplier against the
tax imposed as provided in Subsection (b) of this section with
respect to a subsequent sale of the property.
(d) In this section, "contractor" means a person who makes
an improvement on real estate and who, as a necessary or incidental
part of the service, incorporates tangible personal property into
the property improved.
(e) This section does not apply to the use or consumption of
tangible personal property as a necessary or incidental part of a
taxable service.
(f) A contractor is not eligible for the exemption provided
by Section 151.318 on items used in the performance of a contract to
improve real property.
Acts 1981, 67th Leg., p. 1551, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
17; Acts 2003, 78th Leg., ch. 209, § 18, eff. Oct. 1, 2003.
§ 151.057. SERVICES BY EMPLOYEES. The following
services are not taxable under this chapter:
(1) a service performed by an employee for his
employer in the regular course of business, within the scope of the
employee's duties, and for which the employee is paid his regular
wages or salary;
(2) a service performed by an employee of a temporary
employment service as defined by Section 93.001, Labor Code, for an
employer to supplement the employer's existing work force on a
temporary basis, when the service is normally performed by the
employer's own employees, the employer provides all supplies and
equipment necessary, and the help is under the direct or general
supervision of the employer to whom the help is furnished; or
(3) a service performed by assigned employees of a
staff leasing company, either licensed under Chapter 91, Labor
Code, or exempt from the licensing requirements of that chapter,
for a client company under a written contract that provides for
shared employment responsibilities between the staff leasing
company and the client company for the assigned employees, most of
whom must have been previously employed by the client company. The
comptroller shall prescribe by rule the minimum percentage of
assigned employees that must have been previously employed by the
client company, the minimum time period the assigned employees must
have been employed by the client company prior to the commencement
of its contract, and such other criteria as the comptroller may deem
necessary to properly implement this section.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, § 9, eff.
Oct. 2, 1984. Amended by Acts 1989, 71st Leg., ch. 254, § 1, eff.
Oct. 1, 1989; Acts 1997, 75th Leg., ch. 1040, § 18, eff. Sept. 1,
1997; Acts 2001, 77th Leg., ch. 1263, § 14, eff. Oct. 1, 2001.
§ 151.058. PROPERTY USED TO PROVIDE TAXABLE SERVICES AND
SALE PRICE OF TAXABLE SERVICES. (a) A person performing services
taxable under this chapter is the consumer of machinery and
equipment used in performing the services.
(b) The total amount charged for a service taxable under
this chapter is subject to tax, including charges for labor,
materials, overhead, and profit, regardless of whether such charges
are separately identified to the purchaser of the service.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
18. Amended by Acts 1993, 73rd Leg., ch. 1031, § 20, eff. Sept.
1, 1993.
§ 151.059. FEE IMPOSED IN LIEU OF LOCAL SALES AND USE
TAXES.
Section effective contingent upon federal legislation as provided
in Acts 1989, 71st Leg., ch. 291, § 5.
(a) A nonresident of this state who is required pursuant to
federal law to collect sales or use tax under this chapter may elect
to pay a fee to the comptroller in lieu of all local sales and use
taxes authorized or governed by Title 3 of this code.
(b) A person eligible under federal law may elect to pay the
fee imposed by this section by written notification to the
comptroller. Such notification must be made within 90 days of the
date of the first sale on which tax is required to be collected or
within such other period as the comptroller may by rule require.
The comptroller may require that a notification under this section
be made on a form prescribed by the comptroller and contain any
information relevant to the collection of taxes under this chapter.
A person who does not elect to pay the fee imposed by this section
shall collect and remit all applicable state and local sales and use
tax imposed under the laws of this state in the same manner as a
resident of this state.
(c) Unless another rate is required by federal law, the fee
imposed under this section shall be the weighted average rate of
local sales and use tax collected in this state during the preceding
state fiscal year, applied to the total amount subject to sales and
use tax imposed by this chapter. The rate shall be determined by
the comptroller as soon as practicable following the end of each
state fiscal year and shall be effective beginning on January 1
following the end of that state fiscal year. The weighted average
rate of local sales and use tax shall be computed by:
(1) dividing the aggregate amount of all local sales
and use taxes paid in the state by the aggregate amount of all sales
and uses to which:
(A) the state sales and use tax applies; and
(B) local jurisdictions have the power to impose
a local sales or use tax; and
(2) rounding that result to the nearest .0025.
(d) A fee imposed under this section is subject to the
provisions of Subtitle B of Title 2 of this code in the same manner
as a tax imposed under this chapter.
(e) The fee imposed by this chapter shall be remitted
quarterly in a manner prescribed by the comptroller, subject to the
limitations of applicable federal law, and shall be apportioned and
distributed as required by Section 403.107, Government Code.
(f) Nothing in this section shall be construed to apply to
nonresident persons whose activities would subject them to a duty
to pay, collect, or remit a sales or use tax under this chapter or
Title 3 of this code in the absence of federal legislation.
Added by Acts 1989, 71st Leg., ch. 291, § 3.
§ 151.060. PROPERTY CONSUMED IN REPAIR OF MOTOR
VEHICLE. (a) Except as provided by Subsection (b), a person who
repairs a motor vehicle is the seller of all tangible personal
property consumed in providing that service except electricity and
gas, and shall collect the tax due under this chapter from the
customer.
(b) A person who repairs a motor vehicle is the consumer of
all tangible personal property consumed in providing that service
if the contract between the person and the customer contains a
lump-sum price covering both the performance of the service and the
furnishing of the consumed tangible personal property.
(c) In this section, tangible personal property is
considered consumed if it can no longer be used for its intended
purposes in the normal course of business or is not retained or
reusable by the person providing the repair service.
Added by Acts 1991, 72nd Leg., ch. 378, § 1, eff. Oct. 1, 1991.
§ 151.061. SOURCING OF CHARGES FOR MOBILE
TELECOMMUNICATIONS SERVICES. (a) In this section:
(1) "Home service provider" means the
facilities-based carrier or reseller with which the customer
contracts for the provision of mobile telecommunications services.
(2) "Place of primary use" means the street address
that is representative of where the customer's use of the mobile
telecommunications service primarily occurs. That location must be
the residential street address or the primary business street
address of the customer that is within the licensed service area of
the home service provider.
(3) "Electronic database" means a database provided by
the state or by a designated database provider to home service
providers. Such electronic database shall, allowing for de minimis
deviations, designate for each street address in the state,
including, to the extent practical, any multiple postal street
addresses applicable to one street location, the appropriate taxing
jurisdictions, and the appropriate code for each taxing
jurisdiction, for each level of taxing jurisdiction, identified by
one nationwide numeric code. The nationwide standard numeric codes
shall contain the same number of numeric digits, with each digit or
combination of digits referring to the same level of taxing
jurisdiction throughout the United States using a format similar to
FIPS 55-3 or other appropriate standard approved by the Federation
of Tax Administrators and the Multistate Tax Commission or their
successors. Each address shall be provided in standard postal
format. Such electronic database shall also provide the
appropriate code for each street address with respect to political
subdivisions which are not taxing jurisdictions when reasonably
needed to determine the proper taxing jurisdictions.
(b) This section applies to state and local sales and use
taxes administered and computed under this title or Title 3 and to
which this title or Title 3 applies, including this chapter.
(c) The federal Mobile Telecommunications Sourcing Act (4
U.S.C. Sections 116-126) governs the sourcing of charges for mobile
telecommunications services. In accordance with that Act:
(1) mobile telecommunications services provided in a
taxing jurisdiction to a customer, the charges for which are billed
by or for the customer's home service provider, shall be deemed to
be provided by the customer's home service provider; and
(2) all charges for mobile telecommunications
services that are deemed to be provided by the customer's home
service provider in accordance with this Act are authorized to be
subjected to tax, charge, or fee by the taxing jurisdictions whose
territorial limits encompass the customer's place of primary use,
regardless of where the mobile telecommunications services
originate, terminate, or pass through, and no other taxing
jurisdiction may impose taxes, charges, or fees on charges for such
mobile telecommunications services.
(d) If a customer believes that an amount of tax or an
assignment of place of primary use or taxing jurisdiction included
on a billing is erroneous, the customer shall notify the home
service provider in writing. The customer shall include in the
written notification:
(1) the customer's street address for the customer's
place of primary use;
(2) the account name and number for which the customer
requests the correction;
(3) a description of the error asserted by the
customer; and
(4) any other information that the home service
provider reasonably requires to process the request.
(e) Not later than the 60th day after the date the home
service provider receives a request under Subsection (d), the home
service provider shall review the provider's records and the
electronic database or enhanced zip code to determine the correct
amount of the tax imposed or the assignment of the customer's place
of primary use or taxing jurisdiction, as appropriate. If the home
service provider determines that the amount of tax imposed or the
assignment of place of primary use or taxing jurisdiction is
incorrect, the home service provider shall correct the error and
refund or credit any amount of tax erroneously collected from the
customer. The home service provider shall correct the error and
refund or credit the amount of tax erroneously collected from the
customer for a period of up to four years. If the home service
provider determines that the amount of tax imposed or the
assignment of place of primary use or taxing jurisdiction is
correct, the home service provider shall provide a written
explanation to the customer.
(f) The procedures prescribed by Subsections (d) and (e) are
the first course of remedy available to a customer requesting a
correction of assignment of place of primary use or of taxing
jurisdiction or a refund of or other compensation for taxes
erroneously collected by the home service provider.
(g) The state may provide an electronic database, described
in Subsection (a)(3), to a home service provider or, if the state
does not provide such an electronic database to home service
providers, the designated database provider may provide an
electronic database to a home service provider.
(h) The state or the designated database provider that
provides or maintains an electronic database described in
Subsection (a)(3) shall provide notice of the availability of the
then current electronic database, and any subsequent revisions
thereof, by publication in the manner normally employed by the
state.
(i) A home service provider using the data contained in an
electronic database described in Subsection (a)(3) shall be held
harmless from any tax, charge, or fee liability that otherwise
would be due solely as a result of any error or omission in such
database provided by the state or designated database provider.
The home service provider shall reflect changes made to such
database during a calendar quarter not later than 30 days after the
end of such calendar quarter.
(j) If neither the state nor the designated database
provider provides an electronic database as described in Subsection
(a)(3), a home service provider shall be held harmless from any tax,
charge, or fee liability in the state that otherwise would be due
solely as a result of an assignment of a street address to an
incorrect taxing jurisdiction if, subject to Subsection (n), the
home service provider employs an enhanced zip code to assign each
street address to a specific taxing jurisdiction for each level of
taxing jurisdiction and exercises due diligence at each level of
taxing jurisdiction to ensure that each such street address is
assigned to the correct taxing jurisdiction. If an enhanced zip
code overlaps boundaries of taxing jurisdictions of the same level,
the home service provider must designate one specific jurisdiction
within such enhanced zip code for use in taxing the activity for
such enhanced zip code for each level of taxing jurisdiction. Any
enhanced zip code assignment changed in accordance with Subsection
(n) is deemed to be in compliance with this section. For purposes
of this section, there is a rebuttable presumption that a home
service provider has exercised due diligence if such home service
provider demonstrates that it has:
(1) expended reasonable resources to implement and
maintain an appropriately detailed electronic database of street
address assignments to taxing jurisdictions;
(2) implemented and maintained reasonable internal
controls to promptly correct misassignments of street addresses to
taxing jurisdictions; and
(3) used all reasonably obtainable and usable data
pertaining to municipal annexations, incorporations,
reorganizations, and any other changes in jurisdictional
boundaries that materially affect the accuracy of such database.
(k) Subsection (j) applies to a home service provider that
is in compliance with the requirements of Subsection (j), if an
electronic database as defined in Subsection (a)(3) is not provided
until the later of:
(1) 18 months after the nationwide standard numeric
code described in Subsection (a)(3) has been approved by the
Federation of Tax Administrators and the Multistate Tax Commission;
or
(2) 6 months after the state or a designated database
provider in the state provides such database as prescribed in
Subsection (a)(3).
(l) A home service provider shall be responsible for
obtaining and maintaining the customer's place of primary use as
defined in Subsection (a)(2). Subject to Subsection (n), and if the
home service provider's reliance on information provided by its
customer is in good faith, a taxing jurisdiction shall:
(1) allow a home service provider to rely on the
applicable residential or business street address supplied by the
home service provider's customer; and
(2) not hold a home service provider liable for any
additional taxes, charges, or fees based on a different
determination of the place of primary use for taxes, charges, or
fees that are customarily passed on to the customer as a separate
itemized charge.
(m) Except as provided in Subsection (n), a taxing
jurisdiction shall allow a home service provider to treat the
address used by the home service provider for tax purposes for any
customer under a service contract or agreement in effect two years
after the date of the enactment of the Mobile Telecommunications
Sourcing Act (4 U.S.C. Sections 116-126) as that customer's place
of primary use for the remaining term of such service contract or
agreement, excluding any extension or renewal of such service
contract or agreement, for purposes of determining the taxing
jurisdictions to which taxes, charges, or fees on charges for
mobile telecommunications services are remitted.
(n) The state may:
(1) determine that the address used for purposes of
determining the taxing jurisdictions to which taxes, charges, or
fees for mobile telecommunications services are remitted does not
meet the definition of place of primary use under Subsection (a)(2)
and give binding notice to the home service provider to change the
place of primary use on a prospective basis from the date of notice
of determination. Before the state gives such notice of
determination, the customer shall be given an opportunity to
demonstrate in accordance with applicable state administrative
procedures that the address is the customer's place of primary use;
and
(2) determine that the assignment of a taxing
jurisdiction by a home service provider under Subsection (j) does
not reflect the correct taxing jurisdiction and give binding notice
to the home service provider to change the assignment on a
prospective basis from the date of notice of determination. The
home service provider shall be given an opportunity to demonstrate
in accordance with applicable state administrative procedures that
the assignment reflects the correct taxing jurisdiction.
(o)(1) If a taxing jurisdiction does not otherwise subject
charges for mobile telecommunications services to taxation and if
these charges are aggregated with and not separately stated from
charges that are subject to taxation, then the charges for
nontaxable mobile telecommunications services may be subject to
taxation unless the home service provider can reasonably identify
charges not subject to such tax, charge, or fee from its books and
records that are kept in the regular course of business.
(2) If a taxing jurisdiction does not subject charges
for mobile telecommunications services to taxation, a customer may
not rely upon the nontaxability of charges for mobile
telecommunications services unless the customer's home service
provider separately states the charges for nontaxable mobile
telecommunications services from taxable charges or the home
service provider elects, after receiving a written request from the
customer in the form required by the provider, to provide
verifiable data based upon the home service provider's books and
records that are kept in the regular course of business that
reasonably identifies the nontaxable charges.
Added by Acts 2001, 77th Leg., ch. 370, § 1, eff. Aug. 1, 2002.
SUBCHAPTER D. IMPOSITION AND COLLECTION OF USE TAX
§ 151.101. USE TAX IMPOSED. (a) A tax is imposed on
the storage, use, or other consumption in this state of a taxable
item purchased from a retailer for storage, use, or other
consumption in this state.
(b) The tax is at the same percentage rate as is provided by
Section 151.051 of this code on the sales price of the taxable item.
Acts 1981, 67th Leg., p. 1552, ch. 389, § 1, eff. Jan. 1, 1982.
§ 151.102. USER LIABLE FOR TAX. (a) The person
storing, using, or consuming a taxable item in this state is liable
for the tax imposed by Section 151.101 of this code, and except as
provided by Subsection (b) of this section, the liability continues
until the tax is paid to the state.
(b) A person storing, using, or consuming a taxable item in
this state is not further liable for the tax imposed by Section
151.101 of this code if the person pays the tax to a retailer
engaged in business in this state or other person authorized by the
comptroller to collect the tax and receives from the retailer or
other person a purchaser's receipt given as provided in Section
151.103 of this code.
Acts 1981, 67th Leg., p. 1552, ch. 389, § 1, eff. Jan. 1, 1982.
§ 151.103. COLLECTION BY RETAILER; PURCHASER'S
RECEIPT. (a) Except as provided by Section 151.052(d), a
retailer engaged in business in this state who makes a sale of a
taxable item for storage, use, or consumption in this state shall
collect the use tax that is due from the purchaser and give the
purchaser a receipt for the tax payment. When the amount of use tax
is added:
(1) it becomes a part of the sales price;
(2) it is a debt of the purchaser to the seller until
paid; and
(3) if unpaid, it is recoverable at law in the same
manner as the original sales price.
(b) The purchaser's receipt must be issued in the form and
manner prescribed by the comptroller.
(c) When several taxable items are sold together and at the
same time, the use tax is determined on the sum of the sales prices
of the items sold exclusive of any item the storage, use, or other
consumption of which is exempted by this chapter.
Text of subsec. (d) effective July 1, 2004
(d) A retailer who holds a sales tax permit issued by the
comptroller under this chapter shall collect any applicable local
use tax that is due from a purchaser even if the retailer is not
engaged in business in the local jurisdiction into which the
taxable item is shipped or delivered.
Acts 1981, 67th Leg., p. 1552, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1993, 73rd Leg., ch. 587, § 12, eff. Oct. 1,
1993; Acts 2001, 77th Leg., ch. 397, § 2, eff. Sept. 1, 2001;
Acts 2003, 78th Leg., ch. 1310, § 100, eff. July 1, 2004.
§ 151.104. SALE FOR STORAGE, USE, OR CONSUMPTION
PRESUMED. (a) A sale of a taxable item by a person for delivery in
this state is presumed to be a sale for storage, use, or consumption
in this state unless a resale or exemption certificate is accepted
by the seller.
(b) A sale is exempt if the seller receives in good faith
from a purchaser, who is in the business of selling, leasing, or
renting taxable items, a resale certificate stating that the
property is acquired for the purpose of selling, leasing, or
renting it in the regular course of business or for the purpose of
transferring it as an integral part of a taxable service performed
in the regular course of business.
(c) A sale is exempt if the seller receives in good faith
from a purchaser an exemption certificate stating qualifications
for an exemption provided in Subchapter H of this chapter.
(d) Properly executed resale or exemption certificates
should be in possession of the seller at the time the nontaxable
transaction occurs. If the seller is not in possession of these
certificates within 60 days from the date written notice requiring
possession of them is given to the seller by the comptroller,
deductions claimed by the seller that require delivery of the
certificates shall be disallowed. If the seller acquires
certificates within the 60-day period, the comptroller may verify
the reason or basis for exemption claimed in the certificates
before allowing any deductions. A deduction may not be granted on
the basis of certificates obtained after the 60-day period.
Acts 1981, 67th Leg., p. 1552, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 15, § 3,
eff. Oct. 2, 1984; Acts 1993, 73rd Leg., ch. 1031, § 21, eff.
Sept. 1, 1993.
§ 151.105. IMPORTATION FOR STORAGE, USE, OR CONSUMPTION
PRESUMED. (a) Tangible personal property that is shipped or
brought into this state by a purchaser is presumed, in the absence
of evidence to the contrary, to have been purchased from a retailer
for storage, use, or consumption in this state.
(b) A taxable service used in this state is presumed, in the
absence of evidence to the contrary, to have been purchased from a
retailer for use in this state.
Acts 1981, 67th Leg., p. 1552, ch. 389, § 1, eff. Jan. 1, 1982.
§ 151.106. REGISTRATION OF RETAILERS. (a) A retailer
who sells a taxable item for storage, use, or consumption in this
state shall register with the comptroller.
(b) The registration must include:
(1) the name and address of each agent of the retailer
operating in the state;
(2) the location of all distribution or sales houses
or offices or other places of business in the state; and
(3) other information that the comptroller requires.
(c) A retailer required to register under this section must
comply with Subchapter G of this chapter.
Acts 1981, 67th Leg., p. 1553, ch. 389, § 1, eff. Jan. 1, 1982.
§ 151.107. RETAILER ENGAGED IN BUSINESS IN THIS
STATE. (a) For the purpose of this subchapter and in relation to
the use tax, a retailer is engaged in business in this state if the
retailer:
(1) maintains, occupies, or uses in this state
permanently, temporarily, directly, or indirectly or through a
subsidiary or agent by whatever name, an office, place of
distribution, sales or sample room or place, warehouse, storage
place, or any other place of business;
(2) has a representative, agent, salesman, canvasser,
or solicitor operating in this state under the authority of the
retailer or its subsidiary for the purpose of selling or delivering
or the taking of orders for a taxable item;
(3) derives rentals from a lease of tangible personal
property situated in this state;
(4) engages 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;
(5) solicits orders for taxable items by mail or
through other media and under federal law is subject to or permitted
to be made subject to the jurisdiction of this state for purposes of
collecting the taxes imposed by this chapter;
(6) has a franchisee or licensee operating under its
trade name if the franchisee or licensee is required to collect the
tax under this section; or
(7) otherwise does business in this state.
(b) Notwithstanding any other provision of law, a
broadcaster, printer, outdoor advertising firm, advertising
distributor, or publisher that broadcasts, publishes, displays, or
distributes paid commercial advertising in this state that is
intended to be disseminated primarily to consumers located in this
state and is only secondarily disseminated to bordering
jurisdictions, including advertising appearing exclusively in a
Texas edition or section of a national publication, is considered
for purposes of this section to be the agent of the person placing
the advertisement and that person placing the advertisement is
considered a retailer engaged in business in this state. The agency
relationship recognized by this subsection is for the sole purpose
of providing a presence in this state for the imposition of a tax on
out-of-state advertisers or sellers. The agent has no
responsibility to report, or liability to pay, a tax for the
out-of-state advertiser or seller and is not restricted by this
subchapter from accepting ads from out-of-state advertisers or
sellers.
Subsection (c) effective contingent upon federal legislation as
provided in Acts 1989, 71st Leg., ch. 291, § 5; see Historical
and Statutory Notes following text.
(c) Nonresident persons shall collect the tax imposed by
this chapter with respect to the sale of tangible personal property
to the extent authorized by federal law. Such taxes shall be
remitted quarterly to the comptroller pursuant to rules adopted by
the comptroller in conformance with federal law. This subsection
does not apply to nonresident persons whose activities would
subject them to a duty to pay, collect, or remit a sales or use tax
under this chapter or Title 3 of this code in the absence of federal
legislation.
Acts 1981, 67th Leg., p. 1553, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
19; Acts 1989, 71st Leg., ch. 291, § 2; Acts 1991, 72nd Leg.,
1st C.S., ch. 5, § 14.14.
SUBCHAPTER E. RESALE AND EXEMPTION CERTIFICATES
§ 151.151. RESALE CERTIFICATE. A purchaser may give a
resale certificate for the acquisition of a taxable item if the
purchaser intends to sell, lease, or rent it in the regular course
of business or transfer it as an integral part of a taxable service
performed in the regular course of business.
Acts 1981, 67th Leg., p. 1553, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
20.
§ 151.152. RESALE CERTIFICATE: FORM. (a) A resale
certificate must be substantially in the form prescribed by the
comptroller.
(b) A resale certificate must:
(1) be signed by the purchaser or contain an
electronic form of the purchaser's signature authorized by the
comptroller and contain the purchaser's name and address;
(2) state the purchaser's tax permit number or that the
purchaser's application for a tax permit is pending before the
comptroller; and
(3) contain a description of the tangible personal
property sold, leased, or rented by the purchaser in the regular
course of business or transferred as an integral part of a taxable
service performed in the regular course of business.
(c) A resale certificate from a person engaged in business
in the United Mexican States reselling the taxable item in the
United Mexican States, in addition to the information required in
Subsection (b), must provide:
(1) the purchaser's United Mexican States federal
identification number; and
(2) any other information required by the comptroller.
Acts 1981, 67th Leg., p. 1553, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1995, 74th Leg., ch. 351, § 2, eff. Sept. 1,
1995; Acts 2003, 78th Leg., ch. 1310, § 101, eff. Oct. 1, 2003.
§ 151.153. RESALE CERTIFICATE: COMMINGLED FUNGIBLE
GOODS. If a purchaser gives a resale certificate with respect to
the purchase of fungible goods and then commingles the goods with
other similar fungible goods for which a resale certificate was not
given, sales from the mass of commingled fungible goods are deemed
to be sales of goods covered by the resale certificate until the
quantity of goods covered by the certificate equals the quantity of
goods sold.
Acts 1981, 67th Leg., p. 1554, ch. 389, § 1, eff. Jan. 1, 1982.
§ 151.154. RESALE CERTIFICATE: LIABILITY OF
PURCHASER. (a) If a purchaser who gives a resale certificate
makes any use of the taxable item other than retention,
demonstration, or display while holding it for sale, lease, or
rental in the regular course of business or for transfer as an
integral part of a taxable service in the regular course of
business, the purchaser shall be liable for payment of the sales tax
on the value of the taxable item for any period during which the
taxable item is used other than for retention, demonstration, or
display.
(b) The value of an item of tangible personal property is
the fair market rental value of the tangible personal property,
which is the amount that a purchaser would pay on the open market to
rent or lease the tangible personal property for his use. The value
of a taxable service is the fair market value of the taxable
service, which is the amount that a purchaser would pay on the open
market to obtain the service for the use of the purchaser.
(c) If an item of tangible personal property has no fair
market rental value or if a taxable service has no fair market
value, the original purchase price shall be the measure of the tax.
(d) At any time, the person making the divergent use may
cease paying tax on the fair market rental value or fair market
value and may pay sales tax on the original purchase price without
credit for taxes previously paid.
(e) A purchaser of a taxable item who gives a resale
certificate is not liable for the tax imposed by this chapter if he
donates the item to an organization exempted under Section 151.309
or 151.310(a)(1) or (2) of this code; except that any use by the
purchaser of the taxable item other than retention, demonstration,
or display shall be subject to taxes imposed by this section.
(f) A purchaser who issues a resale certificate for the
purchase of a taxable item is liable for payment of the sales tax on
the purchase price of the taxable item if the purchaser uses the
item as a part of the excludable consideration on the purchase of
another taxable item.
Acts 1981, 67th Leg., p. 1554, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1995, 74th Leg., ch. 1000, § 8, eff. Oct. 1,
1995; Acts 1997, 75th Leg., ch. 1040, § 19, eff. Sept. 1, 1997.
§ 151.155. EXEMPTION CERTIFICATE. (a) Except as
provided by Section 151.3181 for property used in manufacturing, if
a purchaser certifies in writing to a seller that a taxable item
sold, leased, or rented to the purchaser will be used in a manner or
for a purpose that qualifies the sale of the item for an exemption
from the taxes imposed by this chapter, and if the purchaser then
uses the item in some other manner or for some other purpose, the
purchaser is liable for the payment of the sales tax on the value of
the taxable item for any period during which the item is used in the
divergent manner or for the divergent purpose.
(b) The value of an item of tangible personal property is
the fair market rental value of tangible personal property, which
is the amount that a purchaser would pay on the open market to rent
or lease the property for his use. The value of a taxable service is
the fair market value of the taxable service, which is the amount
that a purchaser would pay on the open market to obtain the service
for the use of the purchaser.
(c) If an item of tangible personal property has no fair
market rental value or if a taxable service has no fair market
value, the original purchase price shall be the measure of tax.
(d) At any time, the person making the divergent use may
cease paying tax on the fair market rental value or fair market
value and may pay sales tax on the original purchase price without
credit for taxes previously paid.
(e) A purchaser of a taxable item who gives an exemption
certificate is not liable for the tax imposed by this chapter if he
donates the taxable item to an organization exempted under Section
151.309 or 151.310(a)(1) or (2) of this code; except that any use
by the purchaser of the taxable item other than retention,
demonstration, or display shall be subject to taxes imposed by this
section.
Acts 1981, 67th Leg., p. 1554, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1995, 74th Leg., ch. 1000, § 9, eff. Oct. 1,
1995; Acts 2001, 77th Leg., ch. 1263, § 15, eff. Oct. 1, 2001.
§ 151.156. TAX-FREE PURCHASES OF CERTAIN EXPORTED
ITEMS. (a) The comptroller by rule may establish procedures by
which a maquiladora enterprise or its agent may make tax-free
purchases in this state of tangible personal property that is
exempted from the taxes imposed by this chapter because the
property is immediately exported beyond the territorial limits of
the United States.
(b) The comptroller may issue a permit to an enterprise that
the comptroller authorizes to make tax-free purchases under this
section and the comptroller's rules and may allow an authorized
maquiladora enterprise to make a tax-free purchase by executing an
exemption certificate or in any other manner the comptroller
provides.
(c) To qualify to make tax-free purchases under this
section, a maquiladora enterprise must apply to the comptroller and
comply with any requirements the comptroller requires to administer
this section and to prevent the evasion of state and local sales and
use taxes. The comptroller may require a maquiladora enterprise to
post a bond or other security in the amount the comptroller
considers reasonable to ensure the payment of state and local sales
and use taxes. The comptroller shall require a maquiladora
enterprise authorized to make tax-free purchases under this section
to make available to the comptroller on request its books and
records relating to its maquiladora status, operations, and
purchases.
(d) The comptroller shall require a maquiladora enterprise
authorized to make tax-free purchases under this section to make a
report of its tax-free purchases at least quarterly and may require
the enterprise to include in a report any other information the
comptroller requires.
(e) The comptroller may suspend or revoke the permit or
other authorization of an enterprise to make tax-free purchases
under this section without notice for good cause. In that event,
the comptroller shall notify the enterprise as soon as practicable
of the comptroller's action and shall provide the enterprise with
an opportunity for a hearing on whether the enterprise qualifies to
make tax-free purchases under this section.
(f) In this section, "maquiladora enterprise" means a
business entity chartered by the government of the United Mexican
States and authorized by that government to make duty-free imports
of raw materials, component parts, or other property into Mexico to
be used in manufacturing, processing, or assembling items by the
business entity in Mexico primarily for export from Mexico.
Added by Acts 1989, 71st Leg., ch. 903, § 2, eff. June 14, 1989.
§ 151.157. CUSTOMS BROKERS. (a) A customs broker, or
an authorized employee of a customs broker, licensed by the
comptroller under this section may issue documentation for the
purpose of showing the exemption of tangible personal property
under Section 151.307(b)(2) only under procedures established by
this section, Section 151.1575, and by the comptroller by rule.
(a-1) The comptroller shall maintain a password-protected
website that a customs broker, or an authorized employee of a
customs broker, licensed under this section must use to prepare
documentation to show the exemption of tangible personal property
under Section 151.307(b)(2). The comptroller shall require a
customs broker or authorized employee to use the website to
actually produce the documentation after providing all necessary
information. The comptroller shall use the information provided by
a customs broker or authorized employee under this subsection as
necessary to enforce this section and Section 151.307. The
comptroller shall provide an alternate method to prepare
documentation to show the exemption of tangible personal property
under Section 151.307(b)(2) in those instances when the
password-protected website is unavailable due to technical or
communication problems.
(b) The comptroller may issue a license to a customs broker
for the purpose described by Subsection (a) for each place of
business of the broker if the broker:
(1) applies to the comptroller for the license;
(2) pays the license fee to the comptroller in the
amount required by Subsection (c);
(3) posts the bond or security in the amount required
by Subsection (d); and
(4) complies with any rules of the comptroller to
administer this section and to prevent the evasion of the tax under
this chapter and local sales and use taxes.
(c) A customs broker must pay to the comptroller an annual
license fee of $300 for each place of business from which the
customs broker intends to issue a certificate of export. The
comptroller shall use the fees only for the administration of this
section, including costs of materials, labor, and overhead.
(d) The amount of the bond or security required by
Subsection (b)(3) is $5,000, plus an additional $1,000 for each
place of business from which the customs broker intends to issue
exemption certificates. The security may be in the form of cash, a
certificate of deposit, a letter of credit, or another instrument
of value.
(e) A customs broker licensed under this section shall make
available to the comptroller, on or after the 15th day after the
date the broker receives written notice from the comptroller, the
customs broker's books and records relating to the business of
issuing documentation certifying the export of tangible personal
property beyond the territorial limits of the United States for
purposes of exempting the property from the taxes imposed by this
chapter. The customs broker shall make available to the
comptroller, without notice from the comptroller, the customs
broker's books and records if the comptroller determines that the
comptroller's ability to administer and enforce effectively the
provisions of this chapter relating to documentation for the
purpose of showing the exemption of tangible personal property
under Section 151.307(b)(2) is jeopardized by providing notice.
The customs broker shall keep the books and records described by
this subsection for at least two years after the date of the last
entry that they contain. The customs broker shall report quarterly
to the comptroller:
(1) the total value of the tangible personal property
and the total amount of the corresponding tax for which the customs
broker issued certificates of export; and
(2) the total amount of tax refunded in accordance
with certificates of export.
(f) The comptroller may suspend or revoke a license issued
under this section if the customs broker does not comply with
Section 151.1575(c) or issues documentation that is false to obtain
a refund of taxes paid on tangible personal property not exported or
to assist another person in obtaining such a refund. The
comptroller may determine the length of suspension or revocation
necessary for the enforcement of this chapter and the comptroller's
rules. A proceeding to suspend or revoke a license under this
subsection is a contested case under Chapter 2001, Government Code.
Judicial review is by trial de novo. The district courts of Travis
County have exclusive original jurisdiction of a suit under this
section.
(f-1) In addition to any other penalty provided by law, the
comptroller may require a customs broker to pay to the comptroller
the amount of any tax refunded if the customs broker did not comply
with this section or the rules adopted by the comptroller under this
section in relation to the refunded tax.
(g) A customs broker may authorize a person to act as an
independent contractor to certify in accordance with Section
151.1575(a)(1) that tangible personal property has been exported
outside of the United States only if the authorization is part of
the written contract and the comptroller in writing approves the
authorization. A customs broker may not authorize a person under
this subsection to prepare documentation for the purpose of showing
the exemption for tangible personal property under Section
151.307(b)(2).
Text of subsec. (h) as added by Acts 1993, 73rd Leg., ch. 955, § 1
(h) In this section:
(1) "Customs broker" means a person licensed by the
United States Customs Service to act as a customs house broker.
(2) "Authorized employee" means an employee of a
customs broker:
(A) who is authorized by the broker to perform
customs transactions on behalf of the broker;
(B) who is compensated by the broker with a
regular salary or wages;
(C) who is under the direct control and
supervision of the broker; and
(D) from whose salary or wages the broker is
required to and actually does deduct and withhold a tax under
federal law.
Text of subsec. (h) as added by Acts 2003, 78th Leg., ch. 1001, §
1
(h) Notwithstanding any other law, the filing of a petition
to initiate judicial review does not vacate the comptroller
decision that is the subject of review and does not affect the
enforceability of that decision.
(i) The comptroller shall impose a penalty of $500 for each
occurrence on a customs broker who fails to file the report required
by this section.
Added by Acts 1993, 73rd Leg., ch. 955, § 1, eff. June 19, 1993.
Amended by Acts 2003, 78th Leg., ch. 1001, § 1, eff. Jan. 1,
2004.
§ 151.1575. REQUIREMENTS RELATING TO ISSUING
DOCUMENTATION SHOWING EXPORTATION OF PROPERTY. (a) A customs
broker licensed by the comptroller or an authorized employee of the
customs broker may issue documentation certifying that delivery of
tangible personal property was made to a point outside the
territorial limits of the United States as required by Section
151.307(b)(2)(B) only if the customs broker or authorized employee:
(1) watches the property cross the border of the
United States;
(2) watches the property being placed on a common
carrier for delivery outside the territorial limits of the United
States; or
(3) verifies that the purchaser is transporting the
property to a destination outside of the territorial limits of the
United States by:
(A) examining a passport, laser visa
identification card, or foreign voter registration picture
identification indicating that the purchaser of the property
resides in a foreign country;
(B) requiring the purchaser to produce the
property and the original receipt for the property;
(C) requiring the purchaser to state the foreign
country destination of the property which must be the foreign
country in which the purchaser resides;
(D) requiring the purchaser to state the date and
time the property is expected to arrive in the foreign country
destination;
(E) requiring the purchaser to state the date and
time the property was purchased, the name and address of the place
at which the property was purchased, the sales price and quantity of
the property, and a description of the property;
(F) requiring the purchaser to sign a form:
(i) stating that the purchaser has provided
the information and documentation required by this subdivision;
and
(ii) that contains a notice to the
purchaser that tangible personal property not exported is subject
to taxation under this chapter and the purchaser is liable, in
addition to other possible civil liabilities and criminal
penalties, for payment of an amount equal to the value of the
merchandise if the purchaser improperly obtained a refund of taxes
relating to the property; and
(G) requiring the purchaser to produce the
purchaser's:
(i) Form I-94, Arrival/Departure record, or
its successor, as issued by the United States Immigration and
Naturalization Service, for those purchasers in a county not
bordering the United Mexican States; or
(ii) air, land, or water travel
documentation if the customs broker is located in a county that does
not border the United Mexican States.
(b) A customs broker licensed by the comptroller or an
authorized employee of the customs broker may issue and deliver
documentation under Subsection (a) at any time after the tangible
personal property is purchased and the broker or employee completes
the process required by Subsection (a). The documentation must
include:
(1) the name and address of the customs broker;
(2) the license number of the customs broker;
(3) the name and address of the purchaser;
(4) the name and address of the place at which the
property was purchased;
(5) the date and time of the sale;
(6) a description and the quantity of the property;
(7) the sales price of the property;
(8) the foreign country destination of the property,
which may not be the place of export;
(9) the date and time:
