| (D) Order fulfilled within the state at a location
that is not a place of business. When an order is received by a seller
at any location other than a place of business of the seller in this
state, and the seller fulfills the order at a location in Texas that
is not a place of business of the seller, then the sale is consummated
at the location in Texas to which the order is shipped or delivered,
or the location where it is transferred to the purchaser.
(E) Order received outside of the state, fulfilled
outside of the state. When an order is received by a seller at a location
outside of Texas, and the order is shipped or delivered into a local
taxing jurisdiction from a location outside of the state, the sale
is not consummated at a location in Texas. However, local use tax
is due based upon the location in this state to which the item is
shipped or delivered or at which possession of the item is taken by
the purchaser as provided in subsection (i) of this section.
(F) Exception for qualifying economic development agreements
entered into before January 1, 2009, pursuant to Tax Code, §321.203(c-4)
- (c-5) or §323.203(c-4) - (c-5). This subparagraph is effective
until September 1, 2024. If applicable, the local sales tax due on
the sale of a taxable item is based on the location of the qualifying
warehouse, which is a place of business of the seller, from which
the item is shipped or delivered or at which the purchaser takes possession
of the item.
(4) Orders received by traveling salespersons. Orders
taken by traveling salespersons are received by the seller at the
administrative office or other place of business from which the traveling
salesperson operates, and such sales are consummated at the location
indicated in paragraph (3) of this subsection. For example, if a traveling
salesperson who operates out of a place of business of a seller in
Texas takes an order for a taxable item, and the order is fulfilled
at a location that is not a place of business of the seller in this
state, the sale is consummated at the place of business from which
the salesperson operates, in accordance with paragraph (3)(B) of this
subsection. Similarly, if a traveling salesperson takes an order for
a taxable item, and the order is fulfilled at a place of business
of the seller in this state, the sale is consummated at the location
of the place of business where the order is fulfilled, in accordance
with paragraph (3)(C) of this subsection.
(5) Drop shipments.
(A) When an order for a taxable item is received at
a seller's place of business in Texas, or by a traveling salesperson
operating out of a place of business in this state, and the item is
drop-shipped directly to the purchaser from a third-party supplier,
the sale is consummated at, and local sales tax is due based upon,
the location of the place of business where the order is received.
When an order for a taxable item is received by a seller at one location,
but shipped by the seller to the purchaser from a different location,
the sale is consummated at, and local sales tax is due based upon,
the location designated in paragraph (3) of this subsection. If the
local sales taxes due based on the location of the seller's place
of business at which the sale is consummated equal less than 2.0%,
additional local use tax may be due based upon the location in this
state to which the purchased item is shipped or delivered or at which
possession of the item is taken by the purchaser as provided in subsection
(i) of this section.
(B) When an order for a taxable item is received by
the seller at a location outside of Texas, or by a traveling salesperson
operating from a location outside of this state, and the item is drop-shipped
directly to the purchaser from a third-party supplier, the item is
subject to use tax. See subsection (i) of this section concerning
use tax.
(6) Itinerant vendors; vending machines; temporary
places of business.
(A) Itinerant vendors. Sales made by itinerant vendors
are consummated at, and itinerant vendors must collect sales tax based
upon, the location where the item is delivered or where the purchaser
takes possession of the item. Itinerant vendors do not have any responsibility
to collect use tax.
(B) Vending machines. Sales of taxable items made from
a vending machine are consummated at the location of the vending machine.
See §3.293 of this title (relating to Food; Food Products; Meals;
Food Service) for more information about vending machine sales.
(C) Temporary places of business.
(i) Item transferred to purchaser at time of sale.
When a seller operates a temporary place of business, and items purchased
are transferred to the purchasers at the time of sale, the sales are
consummated at, and local sales tax is due based upon, the location
of the temporary place of business.
(ii) Order accepted at temporary place of business
prior to June 19, 2009. If a seller received an order at a temporary
place of business prior to June 19, 2009, and the order was fulfilled
at another place of business of the seller in this state, the sale
was consummated at, and local sales taxes are due based upon, the
location of the place of business where the order was fulfilled and
not the temporary location where the order was received.
(iii) Order accepted at temporary place of business
on or after June 19, 2009. When a seller receives an order in person
at a temporary place of business and the order is fulfilled at another
location, the sale is consummated at, and local sales taxes are due
based upon, the location of the temporary place of business where
the order was received.
(i) Use tax. The provisions addressing the imposition
of state use tax in §3.346 of this title also apply to the imposition
of local use tax. For example, consistent with §3.346(e) of this
title, all taxable items that are shipped or delivered to a location
in this state that is within the boundaries of a local taxing jurisdiction
are presumed to have been purchased for use in that local taxing jurisdiction
as well as presumed to have been purchased for use in the state.
(1) General rules.
(A) When local use taxes are due in addition to local
sales taxes as provided by subsection (h) of this section, all applicable
use taxes must be collected or accrued in the following order until
the two percent cap is reached: city, county, special purpose district,
and transit authority. If more than one special purpose district use
tax is due, all such taxes are to be collected or accrued before any
transit authority use tax is collected or accrued. See subparagraphs
(D) and (E) of this paragraph.
(B) If a local use tax cannot be collected or accrued
at its full rate without exceeding the two percent cap, the seller
cannot collect it, or any portion of it, and the purchaser is not
responsible for accruing it.
(C) If a seller collects a local sales tax on an item,
or a purchaser accrues a local sales tax on an item, a use tax for
the same type of jurisdiction is not due on the same item. For example,
once a city sales tax has been collected or accrued for an item, no
use tax is due to that same or a different city on that item, but
use tax may be due to a county, special purpose district, or transit
authority. Similarly, if one or more special purpose district sales
taxes have been collected or accrued for an item, no special purpose
district use tax is due on that item, and if one or more transit authority
sales taxes have been collected or accrued for an item, no transit
authority use tax is due on that item.
(D) Collection or accrual of use tax for multiple special
purpose districts. If more than one special purpose district use tax
is in effect at the location where use of an item occurs, the special
purpose district taxes are due in the order of their effective dates,
beginning with the earliest effective date, until the two percent
cap is met. The effective dates of all special purpose district taxes
are available on the comptroller's website. However, if the collection
or accrual of use tax for the district with the earliest effective
date would exceed the two percent cap, the tax for that district is
not due and the seller or purchaser should determine, following the
criteria in subparagraphs (A) - (C) of this paragraph, whether use
tax is due for the district that next became effective.
(i) If the competing special purpose districts became
effective on the same date, the special purpose district taxes are
due in the order of the earliest date for which the election in which
the district residents authorized the imposition of sales and use
tax by the district was held.
(ii) If the elections to impose the local taxes were
held on the same date, the special purpose district taxes are due
in the order of the earliest date for which the enabling legislation
under which each district was created became effective.
Cont'd... |
