TAX CODE
CHAPTER 322. SALES AND USE TAXES FOR SPECIAL PURPOSE TAXING
AUTHORITIES
SUBCHAPTER A. GENERAL PROVISIONS
§ 322.001. APPLICATION OF CHAPTER. (a) This chapter
applies to the imposition, assessment, collection, administration,
and enforcement of a sales and use tax imposed under Chapter 451,
452, 453, or 460, Transportation Code.
(b) The effective dates and rates of the taxes imposed by a
taxing entity are determined under the laws authorizing the
adoption of the taxes.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1997, 75th Leg., ch. 165, § 30.266, eff. Sept. 1,
1997; Acts 2003, 78th Leg., ch. 209, § 56, eff. Oct. 1, 2003.
§ 322.002. DEFINITIONS. In this chapter:
(1) "Taxing entity" means a rapid transit authority, a
regional transit authority, including a subregional transportation
authority, or a municipal mass transit department created under
Chapter 451, 452, or 453, Transportation Code, or a coordinated
county transportation authority created under Chapter 460,
Transportation Code, that has adopted a sales and use tax under the
law authorizing the creation of the entity.
(2) "Entity area" means the geographical limits of a
taxing entity.
(3) "Municipal sales and use tax" means a sales and use
tax imposed by a municipality under the Municipal Sales and Use Tax
Act (Chapter 321) within an entity area.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1997, 75th Leg., ch. 165, § 30.267, eff. Sept. 1,
1997; Acts 2003, 78th Leg., ch. 209, § 57, eff. Oct. 1, 2003.
SUBCHAPTER B. ASSESSMENT AND COMPUTATION OF TAXES
§ 322.101. SALES TAX. There is imposed in a taxing
entity a sales tax at the rate authorized and set as provided by the
law authorizing the creation of the taxing entity and applied to the
receipts from the sale within the entity area of all taxable items
that are subject to the sales tax under Chapter 151.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.102. USE TAX. In a taxing entity, there is
imposed an excise tax on the use, storage, and other consumption
within the entity area of taxable items purchased, leased, or
rented from a retailer during the period that the sales tax is
effective within the entity area. The rate of the excise tax is the
same rate as the rate of the sales tax imposed by the taxing entity
and is applied to the sales price of the taxable item.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.103. COMPUTATION OF SALES TAXES. (a) Each
retailer in an entity area shall add the sales tax imposed under
this chapter, the sales taxes imposed under Chapter 151, and, if
applicable, any sales taxes imposed under Chapter 321 or 323 to the
sales price, and the sum of the taxes is a part of the price, a debt
of the purchaser to the retailer until paid, and recoverable at law
in the same manner as the purchase price.
(b) The amount of the total tax is computed by multiplying
the combined applicable tax rates by the amount of the sales price.
If the product results in a fraction of a cent less than one-half of
one cent, the fraction of a cent is not collected. If the fraction
is one-half of one cent or more, the fraction shall be collected as
one cent.
(c) The exclusion provided by Section 151.411 applies to a
retailer under this chapter 50 percent of whose receipts from the
sales of taxable items comes from individual transactions in which
the sales price is an amount on which no tax is produced from the
combined applicable tax rates.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.104. COMPUTATION OF USE TAX. (a) In each taxing
entity the tax imposed by Subchapter D, Chapter 151, the tax imposed
under Section 321.104(a), if applicable, and the tax imposed under
Section 322.102 are added together to form a single combined tax
rate, except in a situation described by Section 322.105(b).
(b) The formula prescribed by Section 322.103(b) applies to
the computation of the amount of the tax under this section.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.105. USE TAX: WHERE USE OCCURS. (a) In
determining the incidence of the use tax of a taxing entity, the
name of the taxing entity is substituted in Subchapter D, Chapter
151, for "this state" where those words are used to designate the
taxing entity or delimit the tax imposed. However, the excise tax
of a taxing entity on the use, storage, or other consumption of a
taxable item does not apply if the item is first used, stored, or
consumed in an area other than an entity area.
(b) If a sale of a taxable item is consummated within this
state but not within an entity area and the item is shipped directly
or brought by the purchaser or lessee directly into an entity area,
the item is subject to the entity's use tax. The use is considered
to be consummated at the location where the item is first used,
stored, or consumed after the intrastate transit has ceased.
(c) If a taxable item is shipped from outside this state to a
customer within this state, the item is subject to the use tax of
the taxing entity and not its sales tax. A use is considered to be
consummated at the first point in this state where the item is
stored, used, or consumed after the interstate transit has ceased.
A taxable item delivered to a point in this state is presumed to be
for storage, use, or consumption at that point until the contrary is
established.
(d) If a taxable item that is exempt under Section 322.107
is shipped or delivered directly to a purchaser in another taxing
entity, the item is subject to the use tax of the entity in which the
purchaser takes delivery or shipment.
(e) With respect to a taxable service, "use" means the
derivation in the taxing entity of direct or indirect benefit from
the service.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 2, § 14.21(a), eff. Aug. 28,
1989; Acts 1991, 72nd Leg., ch. 705, § 29, eff. Sept. 1, 1991.
§ 322.106. TAX INAPPLICABLE WHEN NO STATE TAX;
EXCEPTIONS. (a) The sales tax of a taxing entity does not apply
to the sale of a taxable item unless the sales tax imposed under
Subchapter C, Chapter 151, also applies to the sale.
(b) The excise tax of a taxing entity on the use, storage, or
consumption of a taxable item does not apply to the use, storage, or
consumption of an item unless the tax imposed by Subchapter D,
Chapter 151, also applies to the use, storage, or consumption of the
item.
(c) Subsection (b) does not apply to the application of the
tax in a situation described by Section 322.105(b).
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1991, 72nd Leg., ch. 705, § 30, eff. Sept. 1,
1991.
§ 322.107. EXEMPTION: SALES TAX ON ITEMS LEAVING
ENTITY. There are exempted from the sales tax of a taxing entity
the receipts of the sale of a taxable item that, under a sales
contract, is shipped to a point outside the entity by means of:
(1) facilities operated by the retailer;
(2) delivery by the retailer to a carrier for shipment
to a consignee at that point; or
(3) delivery by the retailer to a forwarding agent for
shipment outside the entity.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1991, 72nd Leg., ch. 705, § 31, eff. Sept. 1,
1991; Acts 2003, 78th Leg., ch. 1310, § 116, eff. Oct. 1, 2003.
§ 322.108. CERTAIN PROVISIONS OF MUNICIPAL SALES AND USE
TAX APPLICABLE. (a) Except as provided by Subsection (b), the
following apply to the taxes imposed by this chapter in the same
manner as applicable to a municipality under Chapter 321:
(1) Section 321.002(a)(3);
(2) Section 321.003;
(3) Section 321.203;
(4) Section 321.205(d);
(5) Section 321.208;
(6) Section 321.209;
(7) Section 321.303;
(8) Section 321.304; and
(9) Section 321.305.
(b) The provisions of this chapter applicable to a taxing
entity created under Chapter 453, Transportation Code, prevail over
any inconsistent provision in a statute listed in Subsection (a).
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 2, § 14.20(a), eff. Aug. 28,
1989; Acts 1997, 75th Leg., ch. 165, § 30.268, eff. Sept. 1,
1997.
§ 322.109. TELECOMMUNICATIONS EXEMPTION. (a) There
are exempted from the taxes imposed by a taxing entity under this
chapter the sales within the entity area of telecommunications
services unless the application of the exemption is repealed under
this section. A taxing entity may not repeal the application of
this exemption as it applies to interstate long-distance
telecommunications services, but if a taxing entity has repealed
the exemption before the effective date of Part 4, Article 1, H.B.
No. 61, Acts of the 70th Legislature, 2nd Called Session, 1987 ,
interstate long-distance telecommunications services in that
taxing entity are not subject to taxes imposed under this chapter.
(b) Except as provided by Subsection (d), the board of a
taxing entity may, by a majority vote of the board in the manner
required for the adoption of other orders, repeal the application
of the exemption provided by Subsection (a) for telecommunications
services sold within the city.
(c) A taxing entity board that has repealed the application
of the exemption may in the same manner reinstate the exemption.
(d) The governing board of a taxing entity created under
Chapter 451, Transportation Code, may not repeal the application of
the exemption provided by Subsection (a) unless the repeal is first
approved by a majority of the members of the governing body of each
municipality that created the taxing entity. A reinstatement of
the exemption must be approved in the same manner.
(e) A vote of a taxing entity board repealing the
application of or reinstating the exemption must be entered in the
minutes of the entity. The entity board chairman or secretary shall
send to the comptroller by United States certified or registered
mail a copy of each order adopted under this section. The repeal of
the application of the exemption or a reinstated exemption takes
effect within the entity on the first day of the first calendar
quarter after the expiration of the first complete calendar quarter
after the date on which the comptroller receives a copy of the
order.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
34; Acts 1999, 76th Leg., ch. 1008, § 1, eff. June 18, 1999.
§ 322.110. TRANSITION EXEMPTION IN CERTAIN TAXING
ENTITIES. (a) The receipts from the sale, use, or rental of and
the storage, use, or consumption of taxable items in this state are
exempt from the tax imposed under this chapter by a taxing entity
created under Chapter 453, Transportation Code, if the items are
used:
(1) for the performance of a written contract entered
into before the date the tax takes effect in the taxing entity, if
the contract is not subject to change or modification by reason of
the tax; or
(2) pursuant to an obligation of a bid or bids
submitted before the date the tax takes effect in the taxing entity,
if the bid or bids may not be withdrawn, modified, or changed by
reason of the tax.
(b) The exemptions provided by this section have no effect
after three years from the date the tax takes effect in the taxing
entity.
Added by Acts 1989, 71st Leg., ch. 2, § 14.19(a), eff. Aug. 28,
1989. Amended by Acts 1997, 75th Leg., ch. 165, § 30.269, eff.
Sept. 1, 1997.
SUBCHAPTER C. ADMINISTRATION OF TAXES
§ 322.201. COMPTROLLER TO COLLECT AND ADMINISTER
TAXES. (a) The comptroller shall administer, collect, and
enforce the sales and use tax of a taxing entity.
(b) The sales and use taxes imposed under this chapter, the
taxes imposed under Chapters 321 and 323, and the taxes imposed
under Chapter 151 shall be collected together to the extent that
each is imposed in an entity area.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.202. COMPTROLLER'S REPORTING DUTIES. (a) The
comptroller shall report to a taxing entity on the entity's sales
and use taxes by making substantially the same reports that are
required to be made by the comptroller to a municipality under
Sections 321.302(a), (b), and (c).
(b) The comptroller shall send to a taxing entity by United
States certified or registered mail a notice of each person who is
delinquent in the payment of the entity's sales and use taxes and
shall send to the attorney general a copy of the notice. A notice
sent under this subsection is a certification of the amount of tax
owed and is prima facie evidence of a determination of that amount
and of its delinquency.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.203. COMPTROLLER'S RULES. The comptroller may
adopt reasonable rules and prescribe forms that are consistent with
this chapter for the administration, collection, and enforcement of
this chapter and for the reporting of the taxes imposed under this
chapter.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.204. DELINQUENT TAXES: LIMITATIONS. The
limitations for the bringing of a suit for the collection of a sales
and use tax imposed by a taxing entity or a penalty due on the tax
after the tax and penalty are delinquent or after a determination
against a taxpayer are the same as the limitations provided by
Chapter 151.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.205. SEIZURE AND SALE OF PROPERTY. (a) If the
comptroller lawfully seizes property for the payment of the taxes
imposed under Chapter 151 and the property owner is delinquent in
the payment of taxes under this chapter, the comptroller shall sell
sufficient property to pay the delinquent taxes and penalties under
this chapter, Chapter 151, and Chapter 321.
(b) The proceeds of the sale of seized property shall first
be applied to the payment of amounts due the state, then to the
payments of amounts due a municipality under Chapter 321, and the
remainder, if any, to the payment of amounts due to the taxing
entity to which the taxes are due.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.206. SUITS FOR TAX COLLECTION. (a) A taxing
entity acting through its attorney may join as a plaintiff in any
suit brought by the attorney general to seek a judgment for
delinquent taxes and penalties due to the taxing entity under this
chapter.
(b) A taxing entity may bring suit for the collection of
taxes owed to the taxing entity under this chapter if:
(1) the taxes are certified by the comptroller in the
notice required by Section 322.202(b);
(2) a written notice of the tax delinquency and the
entity's intention to bring suit is given by certified mail to the
taxpayer, the attorney general, and the comptroller at least 60
days before the suit is filed; and
(3) neither the comptroller nor the attorney general
disapproves of the suit.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.207. DISAPPROVAL OF SUIT. (a) The comptroller
or the attorney general may disapprove of the institution of a suit
by a taxing entity under Section 322.206(b) if:
(1) negotiations between the state and the taxpayer
are being conducted for the purpose of the collection of delinquent
taxes owed to the state and the taxing entity seeking to bring suit;
(2) the taxpayer owes substantial taxes to the state
and there is a reasonable possibility that the taxpayer may be
unable to pay the total amount owed;
(3) the state will bring suit against the taxpayer for
all taxes due under Chapter 151 and this chapter; or
(4) the suit involves a critical legal question
relating to the interpretation of state law or a provision of the
Texas or United States constitution in which the state has an
overriding interest.
(b) A notice of disapproval to a taxing entity must be in
writing and give the reason for the determination by the
comptroller or attorney general.
(c) A disapproval is final and not subject to review.
(d) Not earlier than one year after the date of a
disapproval of the institution of a taxing entity collection suit,
the taxing entity may again proceed as provided by Section
322.206(b) even though the liability of the taxpayer includes taxes
for which the entity has previously given notice and the
comptroller or attorney general has disapproved of the suit.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.208. JUDGMENTS IN SUIT. (a) A judgment in a suit
under Section 322.206(b) for or against a taxpayer does not affect a
claim against the taxpayer by a municipality or the state unless the
state is party to the suit.
(b) A taxing entity shall abstract a copy of each final
judgment for taxes imposed under this chapter in a case in which the
state is not a party and shall send to the comptroller a copy of the
judgment and the abstract.
(c) A taxing entity shall by execution collect the taxes
awarded to it in each judgment received by it and is responsible for
the renewal of the judgment before its expiration.
(d) The taxing entity shall notify the comptroller by
certified mail of the amount of any taxes collected on the judgment.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
SUBCHAPTER D. REVENUE DEPOSIT, DISTRIBUTION, AND USE
§ 322.301. COLLECTIONS HELD BY COMPTROLLER. The
comptroller shall deposit, hold, account for, and transmit sales
and use taxes collected under this chapter for each taxing entity in
the same manner as required under Section 321.501 for each
municipality.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.302. DISTRIBUTION OF TRUST FUNDS. At least
quarterly during each state fiscal year and as often as feasible,
the comptroller shall send to the person at each taxing entity who
performs the function of entity treasurer, payable to the taxing
entity, the entity's share of the taxes collected by the
comptroller under this chapter.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 16, § 5, eff. Aug. 31, 1989;
Acts 1997, 75th Leg., ch. 165, § 30.270, eff. Sept. 1, 1997;
Acts 1999, 76th Leg., ch. 1467, § 2.68, eff. Oct. 1, 1999.
§ 322.303. STATE'S SHARE. Before sending any money to a
taxing entity under this subchapter, the comptroller shall deduct
two percent of the amount of the taxes collected within the entity
area during the period for which a distribution is made as the
state's charge for its services under this chapter and shall credit
the money deducted to the general revenue fund.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 322.304. AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
comptroller may retain in the suspense account of a taxing entity a
portion of the entity's share of the tax collected for the entity
under this chapter, not to exceed five percent of the amount
remitted to the entity. If the entity has abolished the tax, the
amount that may be retained may not exceed five percent of the final
remittance to the entity at the time of the termination of the
collection of the tax.
(b) From the amounts retained in an entity's suspense
account, the comptroller may make refunds for overpayments to the
account and to redeem dishonored checks and drafts deposited to the
credit of the account.
(c) Before the expiration of one year after the effective
date of the abolition of an entity's tax under this chapter other
than a department under Chapter 453, Transportation Code, the
comptroller shall send to the entity the remainder of the money in
the entity's account and shall close the account.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1997, 75th Leg., ch. 165, § 30.271, eff. Sept. 1,
1997.
§ 322.305. INTEREST ON TRUST ACCOUNTS. Interest earned
on all deposits made with the comptroller under this chapter,
including interest earned on retained accounts, shall be credited
to the general revenue fund.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1997, 75th Leg., ch. 1423, § 19.125, eff. Sept.
1, 1997.
§ 322.306. RETENTION OF CERTAIN SPECIAL PURPOSE DISTRICT
SALES TAXES. A taxing entity that holds a sales and use tax permit
issued by the comptroller and that imposes a sales and use tax may
retain the portion of the tax that the taxing entity collects and
that constitutes the entity's own tax. The taxing entity shall
remit to the comptroller all other applicable local sales and use
taxes and the state sales and use tax.
Added by Acts 2001, 77th Leg., ch. 1263, § 76, eff. Oct. 1, 2001.
