(D) A person engaged in business in this state who
sells, leases, or rents tangible personal property owned by another
person by means of a consignment sale is a seller responsible for
the collection and remittance of the sales tax on the consignment
sale.
(E) An auctioneer who owns tangible personal property
or to whom tangible personal property has been consigned is a seller
responsible for the collection and remittance of the sales and use
tax on tangible personal property sold at auction. For more information,
auctioneers should refer to §3.311 of this title (relating to
Auctioneers, Brokers, and Factors).
(11) Taxable item--Tangible personal property and taxable
services. Except as otherwise provided in Tax Code, Chapter 151, the
sale or use of a taxable item in electronic form instead of on physical
media does not alter the item's tax status.
(A) Tangible personal property means property that
can be seen, weighed, measured, felt, or touched or that is perceptible
to the senses in any other manner, including a computer program as
defined in §3.308 of this title (relating to Computers--Hardware,
Computer Programs, Services, and Sales) and a telephone prepaid calling
card, as defined in §3.344 of this title.
(B) Taxable services are those identified in Tax Code,
§151.0101 (Taxable Services).
(b) Who must have a sales and use tax permit.
(1) Sellers. Except as provided in paragraph (2) of
this subsection, each seller who is engaged in business in this state,
including itinerant vendors, persons who own or operate a kiosk, and
sellers operating temporarily in this state, must apply to the comptroller
and obtain a sales and use tax permit for each place of business
operated in this state and a single permit for its out-of-state places
of business.
(2) Safe harbor for remote sellers.
(A) Remote seller defined. For purposes of this paragraph,
a remote seller is a seller engaged in business in this state whose
only activity in the state is described in subsection (a)(4)(I) or
(J) of this section.
(B) Safe harbor. The comptroller will not enforce the
permit requirement of this subsection or the collection obligation
of subsection (d) of this section on a remote seller whose total Texas
revenue in the preceding twelve calendar months is less than $500,000.
If a remote seller's total Texas revenue exceeds that amount, the
remote seller shall obtain a permit and begin collecting as provided
in subparagraph (E) of this paragraph and shall continue to collect
unless it terminates its collection obligation under subparagraph
(F) of this paragraph.
(C) Total Texas revenue defined. For purposes of this
paragraph, total Texas revenue means the gross revenue from the sale
of tangible personal property and services for storage, use, or other
consumption in this state recognized under the accounting method used
by the seller, and includes separately stated handling, transportation,
installation, and other similar fees collected by the seller in connection
with the sale. Total Texas revenue includes taxable, nontaxable, and
tax-exempt sales. A sale of an item for delivery in this state is
presumed to be a sale for storage, use, or other consumption in this
state. With respect to a service, "use" means the derivation in this
state of direct or indirect benefit from the service.
(D) Consolidation of total Texas revenue. The comptroller
may consolidate the total Texas revenue of sellers engaged in conduct
that circumvents the safe harbor amount in subparagraph (B) of this
paragraph.
(E) When to obtain a permit and begin collecting. No
later than the first day of the fourth month after the month in which
a remote seller exceeds the safe harbor amount in subparagraph (B)
of this paragraph, the remote seller shall obtain a permit and begin
collecting use tax. For example, if during the period of July 1, 2018,
through June 30, 2019, a remote seller's total Texas revenue exceeds
the safe harbor amount in subparagraph (B) of this paragraph, the
remote seller shall obtain a permit by October 1, 2019, and begin
collecting use tax no later than October 1, 2019.
(F) Terminating collection obligation. A remote seller
that is required to be permitted may terminate its collection obligation
under this paragraph after twelve consecutive months in which the
remote seller's total Texas revenue for the preceding twelve calendar
months is below the safe harbor amount in subparagraph (B) of this
paragraph. In order to terminate its collection obligation, a remote
seller must submit a form prescribed by the comptroller. Thereafter,
the remote seller shall resume collection on the first day of the
second month following any twelve calendar months in which the remote
seller's total Texas revenue exceeds the safe harbor amount in subparagraph
(B) of this paragraph. For example, if the total Texas revenue of
a remote seller that previously terminated its collection obligation
exceeds the safe harbor amount in subparagraph (B) of this paragraph
during the period of January 1, 2020, through December 31, 2020, the
remote seller shall resume collection on February 1, 2021.
(G) Records retention required. A remote seller that
terminates its collection obligation shall comply with the record
retention requirement of §3.281 of this title (relating to Records
Required; Information Required) and §3.282 of this title (relating
to Auditing Taxpayer Records). The remote seller must maintain sufficient
documentation to verify the date on which the remote seller terminated
its collection obligation under subparagraph (F) of this paragraph
or ceases to engage in business in this state.
(H) Transition rule. Remote sellers will be subject
to the permit requirement of this subsection and the collection obligation
of subsection (d) of this section beginning on October 1, 2019. The
initial twelve calendar months for determining a remote seller's total
Texas revenue will be July 1, 2018, through June 30, 2019. If a remote
seller's total Texas revenue during that period exceeds the safe harbor
amount in subparagraph (B) of this paragraph, the seller shall obtain
a permit by October 1, 2019, and begin collecting use tax no later
than October 1, 2019.
(3) A seller that no longer intends to engage in business
and make sales of taxable items in the state shall submit a form prescribed
by the comptroller to terminate its permit and must obtain a new permit
before it commences sales of taxable items in the state thereafter.
The seller must maintain sufficient documentation to verify the date
on which the seller ceases to engage in business in this state.
(4) Direct sales organizations. Independent salespersons
of direct sales organizations are not required to hold sales and use
tax permits to sell taxable items for direct sales organizations.
Direct sales organizations engaged in business in this state are sellers
responsible for holding sales and use tax permits and for the collection
and remittance of sales and use tax on all sales of taxable items
by their independent salespersons. See subsection (d)(3) of this section
for more information about the collection and remittance of sales
and use tax by direct sales organizations.
(5) Non-permitted purchasers. Persons who are not required
to have a sales and use tax permit or who do not have a direct payment
permit are still responsible for paying to the comptroller sales or
use tax due on purchases of taxable items from sellers who do not
collect and remit tax. See subsection (g)(9) of this section for return
and payment information and §3.346 of this title (relating to
Use Tax).
(6) Non-permitted sellers. Failure to obtain a sales
and use tax permit does not relieve a seller required by this section
or other applicable law to have a sales and use tax permit from the
obligation to properly collect and remit sales and use taxes. Sellers
whose sales and use tax permits are suspended, pursuant to subsection
(l) of this section, or cancelled, pursuant to subsection (n) of this
section, and sellers who have not received sales and use tax permits
due to unsigned or incomplete applications, are still responsible
for properly collecting and remitting sales and use taxes. See subsection
(g) of this section for return and payment information.
(c) Obtaining a sales and use tax permit.
(1) A seller must complete an application that the
comptroller furnishes and must return that application to the comptroller,
together with bond or other security that may be required by §3.327
of this title (relating to Taxpayer's Bond or Other Security). A seller
who files an electronic application furnished by the comptroller is
deemed to have signed the application and is not required to print
and mail a signed application to the comptroller. A separate sales
and use tax permit under the same taxpayer account number is issued
to the applicant for each place of business. Sales and use tax permits
are issued without charge.
Cont'd... |