| (2) Each seller must apply for a sales and use tax
permit. An individual or sole proprietor must be at least 18 years
of age unless the comptroller allows an exception from the age requirement.
The sales and use tax permit cannot be transferred from one seller
to another. The sales and use tax permit is valid only for the seller
to whom it was issued and for the transaction of business only at
the address that is shown on the sales and use tax permit. If a seller
operates two or more types of business at the same location, then
only one sales and use tax permit is required.
(3) The sales and use tax permit must be conspicuously
displayed at the place of business for which it is issued. A permit
holder that has traveling sales persons who operate from a central
office needs only one sales and use tax permit, which must be displayed
at that office.
(4) All sales and use tax permits of the seller will
have the same taxpayer account number; however, each place of business
will have a different outlet number. The outlet numbers assigned may
not necessarily correspond to the number of business locations operated
by the seller.
(d) Collecting sales and use tax due.
(1) Bracket system.
(A) Each seller must collect sales or use tax on each
separate retail sale in accordance with the statutory bracket system
in Tax Code, §151.053. The practice of rounding off the amount
of sales or use tax that is due on the sale of a taxable item is prohibited.
Copies of the bracket system should be displayed in each place of
business so both the seller and the purchaser may easily use them.
(B) The sales and use tax applies to each total sale,
not to each item of each sale. For example, if two items are purchased
at the same time and each item is sold for $.07, then the seller must
collect the tax on the total sum of $.14. Sales and use tax must be
reported and remitted to the comptroller as provided by Tax Code, §151.410.
When sales and use tax is collected properly under the bracket system,
the seller is not required to remit any amount that is collected in
excess of the sales and use tax due. Conversely, when the sales and
use tax collected under the bracket system is less than the sales
and use tax due on the seller's total receipts, the seller is required
to remit sales and use tax on the total receipts even though the seller
did not collect sales and use tax from the purchasers.
(2) Sales and use tax due is debt of the purchaser;
document requirements.
(A) The sales and use tax due is a debt of the purchaser
to the seller until collected. Unpaid sales or use tax is recoverable
by the seller in the same manner as the original sales price of the
taxable item itself, if unpaid, would be recoverable. The comptroller
may proceed against either the seller or purchaser, or against both,
until all applicable tax, penalty, and interest due has been paid.
(B) The amount of sales and use tax due must be separately
stated on the bill, contract, or invoice to the purchaser or there
must be a written statement to the purchaser that the stated price
includes sales or use tax. Contracts, bills, or invoices that merely
state that "all taxes" are included are not specific enough to relieve
either party to the transaction of its sales and use tax responsibilities.
The total amount that is shown on such documents is presumed to be
the taxable item's sales price, without sales and use tax included.
The seller or purchaser may overcome the presumption by using the
seller's records to show that sales or use tax was included in the
sales price.
(3) Direct sales organizations. A direct sales organization
is responsible for the collection and remittance of the sales and
use tax on all sales of taxable items in this state by the independent
salespersons who sell the organization's product or service as explained
in this paragraph. See subsection (b)(3) of this section for information
about sales and use tax permits required to be held by direct sales
organizations.
(A) If an independent salesperson purchases a taxable
item from a direct sales organization after taking the purchaser's
order, then the direct sales organization must collect from the independent
salesperson, and remit to the comptroller, the sales and use tax on
the actual sales price for which the independent salesperson sold
the taxable item to the purchaser.
(B) If an independent salesperson purchases a taxable
item from a direct sales organization before the purchaser's order
is taken, then the direct sales organization must collect from the
independent salesperson, and remit to the comptroller, the sales and
use tax based on the organization's suggested retail sales price of
the taxable item.
(C) Taxable items that are sold to an independent salesperson
for the salesperson's use are taxed based on the actual sales price
for which the item was sold to the salesperson at the tax rate in
effect for the salesperson's location.
(D) Incentives, including rewards, gifts, and prizes.
(i) Direct sales organizations owe sales and use tax
on the cost of all taxable items used as incentives that are transferred
to a recipient in this state, including purchasers, independent salespersons,
and persons who host a direct sales event.
(ii) Direct sales organizations must collect sales
or use tax on the total amount of consideration received in exchange
for taxable items, including items purchased with hostess points or
similar forms of compensation paid to a person for hosting a direct
sales event and items that are earned by the host based on the volume
of purchases. The redemption of reward points in exchange for taxable
items is subject to sales tax under Tax Code, §151.005(2). See
also §3.283 of this title (relating to Bartering Clubs and Exchanges).
(4) Printers. A printer is a seller of printed materials
and is required to collect sales and use tax on sales of those materials
in this state. A printer who is engaged in business in this state,
however, is not required to collect the sales and use tax if:
(A) the printed materials are produced by a web offset
or rotogravure printing process;
(B) the printer delivers those materials to a fulfillment
house or to the United States Postal Service for distribution to third
parties who are located both inside and outside of this state; and
(C) the purchaser issues a properly completed exemption
certificate that contains the statement that the printed materials
are for multistate use and the purchaser agrees to pay to this state
all the sales and use taxes that are or may become due to the state
on the taxable items that are purchased under the exemption certificate.
See subsection (g)(4) of this section for additional reporting requirements.
(5) Fundraisers by exempt entities. Regardless of the
contractual terms between a for-profit entity and a non-profit exempt
entity relating to the sale of taxable items, other than amusement
services, as part of any fundraiser, the for-profit entity will be
considered the seller of the items under Tax Code, §151.024,
must be a permit holder, and is responsible for the proper collection
and remittance of any sales or use tax due. The exempt entity and
its representatives will be considered as representatives of the for-profit
entity. The for-profit entity may advertise in a sales catalog or
state on each invoice that sales and use tax is included, as provided
under paragraph (2) of this subsection, or may require that the sales
and use tax be calculated and collected by its representatives based
on the sales price of each taxable item. Fundraisers conducted by
exempt entities in this manner do not qualify as a tax-free sale day.
For more information on exempt entities and tax-free sales days, see §3.322
of this title (relating to Exempt Organizations). For more information
on amusement services, see §3.298 of this title (relating to
Amusement Services).
(6) Local sales and use tax. A seller who has nexus
with this state and is engaged in business in this state is required
to properly collect and remit local sales and use tax even if no sales
and use tax permit is required at the location where taxable items
are sold. For more information on the proper collection of local taxes,
see §3.334 of this title.
(e) Sales and use tax returns and remitting tax due.
(1) Forms prescribed by the comptroller. Sales and
use tax returns must be filed on forms that the comptroller prescribes.
The fact that a person does not receive or obtain the correct forms
from the comptroller does not relieve a person of the responsibility
to file a sales and use tax return and to remit the required sales
and use tax.
(2) Signatures. Sales and use tax returns must be signed
by the person who is required to file the sales and use tax return
or by the person's duly authorized agent, but need not be verified
by oath.
(3) Permit holders.
(A) Each permit holder is required to file a sales
and use tax return for each reporting period, even if the permit holder
has no sales or use tax to report for the reporting period.
Cont'd... |
