| (E) Collection or accrual of use tax for multiple transit
authorities. If more than one transit authority use tax is in effect
at the location where use of an item occurs, and the two percent cap
has not been met, the transit authority taxes are due in the order
of their effective dates, beginning with the earliest effective date,
until the two percent cap is met. The effective dates of all transit
authority taxes are available on the comptroller's website. However,
if the collection or accrual of use tax for the authority with the
earliest effective date would exceed the two percent cap, the tax
for that authority is not due and the seller or purchaser should determine,
following the criteria in subparagraphs (A) - (D) of this paragraph,
whether use tax is due for the authority that next became effective.
(i) If the competing transit authorities became effective
on the same date, the transit authority taxes are due in the order
of the earliest date for which the election in which the authority
residents authorized the imposition of sales and use tax by the authority
was held.
(ii) If the elections to impose local taxes were held
on the same date, the transit authority use taxes are due in the order
of the earliest date for which the enabling legislation under which
each authority was created became effective.
(2) General use tax rules applied to specific situations.
The following fact patterns explain how local use tax is to be collected
or accrued and remitted to the comptroller based on, and subject to,
the general rules in paragraph (1) of this subsection.
(A) Sale consummated outside the state, item delivered
from outside the state or from a location in Texas that is not operated
by the seller - local use tax due. If a sale is consummated outside
of this state according to the provisions of subsection (h) of this
section, and the item purchased is either shipped or delivered to
a location in this state as designated by the purchaser from a location
outside of the state, or if the order is drop shipped directly to
the purchaser from a third-party supplier, local use tax is owed based
upon the location in this state to which the order is shipped or delivered.
If the seller is engaged in business in the local taxing jurisdiction
into which the order is shipped or delivered, the seller is responsible
for collecting the local use tax due on the sale. If the seller does
not collect the local use taxes due on the sale, the purchaser is
responsible for accruing such taxes and remitting them directly to
the comptroller according to the provisions in paragraph (1) of this
subsection. For example, if an order for a taxable item is received
by a seller at a location outside of Texas, and the order is shipped
to the purchaser from a location outside of the state, local use tax
is due based upon the location to which the order is shipped or delivered.
(B) Sale consummated in Texas outside a local taxing
jurisdiction, item delivered into one or more local taxing jurisdictions
- local use tax due. If a sale is consummated at a location in Texas
that is outside of the boundaries of any local taxing jurisdiction
according to the provisions of subsection (h) of this section, and
the order is shipped or delivered to the purchaser at a location in
this state that is within the boundaries of one or more local taxing
jurisdictions, local use tax is due based on the location to which
the items are shipped or delivered. If the seller is engaged in business
in the local taxing jurisdiction where the items are shipped or delivered,
the seller is responsible for collecting the local use taxes due.
If the seller fails to collect any local use taxes due, the purchaser
is responsible for accruing such taxes and remitting them directly
to the comptroller. For example, if a seller uses its own delivery
vehicle to transport a taxable item from a place of business that
is outside the boundaries of a local taxing jurisdiction to a delivery
location designated by a purchaser that is inside the boundaries of
a local taxing jurisdiction, the seller is responsible for collecting
the local use taxes due based on the location to which the items are
delivered.
(C) Sale consummated in any local taxing jurisdictions
imposing less than 2.0% in total local taxes - local sales taxes,
and possibly use taxes, due. If a sale is consummated at a location
in Texas where the total local sales tax rate imposed by the taxing
jurisdictions in effect at that location does not equal or exceed
2.0% according to the provisions of subsection (h) of this section,
and the item is shipped or delivered to the purchaser at a location
in this state that is inside the boundaries of a different local taxing
jurisdiction, additional local use tax may be due based on the location
to which the order is shipped or delivered, subject to the two percent
cap. If the seller is engaged in business in the local taxing jurisdiction
into which the order is shipped or delivered, the seller is responsible
for collecting any additional local use taxes due. See subsection
(g) of this section. If the seller fails to collect the additional
local use taxes due, the purchaser is responsible for accruing such
taxes and remitting them directly to the comptroller. For example,
if an order is received in person at a place of business of the seller,
such that the sale is consummated at the location where the order
is received as provided under subsection (h)(3)(A) of this section,
and the local sales tax due on the sale does not meet the two percent
cap, additional local use taxes may be due based on the location to
which the order is shipped or delivered, subject to the provisions
in paragraph (1) of this subsection. Or, if a purchaser places an
order for a taxable item at a seller's place of business in Texas,
and the seller ships or delivers the item from an out-of-state location
to a location in this state as designated by the purchaser, local
sales tax is due based upon the location of the place of business
where the order is received. If the local sales tax due on the item
does not meet the two percent cap, use tax, subject to the provisions
in paragraph (1) of this subsection, is due based upon the location
where the items are shipped or delivered.
(j) Items purchased under a direct payment permit.
(1) When taxable items are purchased under a direct
payment permit, local use tax is due based upon the location where
the permit holder first stores the taxable items, except that if the
taxable items are not stored, then local use tax is due based upon
the location where the taxable items are first used or otherwise consumed
by the permit holder.
(2) If, in a local taxing jurisdiction, storage facilities
contain taxable items purchased under a direct payment exemption certificate
and at the time of storage it is not known whether the taxable items
will be used in Texas, then the taxpayer may elect to report the use
tax either when the taxable items are first stored in Texas or are
first removed from inventory for use in Texas, as long as use tax
is reported in a consistent manner. See also §3.288(i) of this
title (relating to Direct Payment Procedures and Qualifications) and §3.346(g)
of this title.
(3) If local use tax is paid on stored items that are
subsequently removed from Texas before they are used, the tax may
be recovered in accordance with the refund and credit provisions of §3.325
of this title (relating to Refunds and Payments Under Protest) and §3.338
of this title (relating to Multistate Tax Credits and Allowance of
Credit for Tax Paid to Suppliers).
(k) Special rules for certain taxable goods and services.
Sales of the following taxable goods and services are consummated
at, and local tax is due based upon, the location indicated in this
subsection.
(1) Amusement services. Local tax is due based upon
the location where the performance or event occurs. For more information
on amusement services, refer to §3.298 of this title (relating
to Amusement Services).
(2) Cable services. When a service provider uses a
cable system to provide cable television or bundled cable services
to customers, local tax is due as provided for in §3.313 of this
title. When a service provider uses a satellite system to provide
cable services to customers, no local tax is due on the service in
accordance with the Telecommunications Act of 1996, §602.
(3) Florists. Local sales tax is due on all taxable
items sold by a florist based upon the location where the order is
received, regardless of where or by whom delivery is made. Local use
tax is not due on deliveries of taxable items sold by florists. For
example, if the place of business of the florist where an order is
taken is not within the boundaries of any local taxing jurisdiction,
no local sales tax is due on the item and no local use tax is due
regardless of the location of delivery. If a Texas florist delivers
an order in a local taxing jurisdiction at the instruction of an unrelated
florist, and if the unrelated florist did not take the order within
the boundaries of a local taxing jurisdiction, local use tax is not
due on the delivery. For more information about florists' sales and
use tax obligations, refer to §3.307 of this title (relating
to Florists).
Cont'd... |
