| (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 (c) 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 or at which the purchaser of the
item takes possession. The seller is responsible for collecting the
local use taxes due on the sale, regardless of the location of the
seller in Texas. 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.
(C) Sale consummated in any local taxing jurisdictions
imposing less than 2.0% in total local taxes - local sales taxes and
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 2.0% according to the provisions
of subsection (c) 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 or at which the purchaser of the item takes possession,
subject to the two percent cap. The seller is responsible for collecting
any additional local use taxes due on the sale, regardless of the
location of the seller in Texas. See subsection (i) 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.
(i) Example one - 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
(c)(1)(A) of this section, and the local sales tax due on the sale
does not meet the two percent cap, additional local use taxes are
due based on the location to which the order is shipped or delivered
or at which the purchaser of the item takes possession, subject to
the provisions in paragraph (1) of this subsection.
(ii) Example two - if a seller receives 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 of the seller where
the order is received. If the local sales tax due on the item does
not meet the two percent cap, use taxes, subject to the provisions
in paragraph (1) of this subsection, are due based upon the location
where the items are shipped or delivered or at which the purchaser
of the item takes possession.
(e) Effect of other law.
(1) Tax Code, Title 2, Subtitles A (General Provisions)
and B (Enforcement and Collection), Tax Code, Chapter 141 (Multistate
Tax Compact) and Tax Code, Chapter 151 (Limited Sales, Excise, and
Use Tax) apply to transactions involving local taxes. Related sections
of this title and comptroller rulings shall also apply with respect
to local taxes. This includes authorities such as court cases and
federal law that affect whether an item is taxable or is excluded
or exempt from taxation.
(2) Permits, exemption certificates, and resale certificates
required by Tax Code, Chapter 151, shall also satisfy the requirements
for collecting and remitting local taxes, unless otherwise indicated
by this section or other sections of this title. For example, see
subsection (n) of this section concerning prior contract exemptions.
(3) Any provisions in this section or other sections
of this title related to a seller's responsibilities for collecting
and remitting local taxes to the comptroller shall also apply to a
purchaser if the seller does not collect local taxes that are due.
The comptroller may proceed against the seller or purchaser for the
local tax owed by either.
(f) Tax rates. Except as otherwise provided by law,
no local governmental entity may adopt or increase a sales and use
tax if, as a result of the adoption or increase of the tax, the combined
rate of all sales and use taxes imposed by local taxing jurisdictions
having territory in the local governmental entity would exceed 2.0%
at any location within the boundaries of the local governmental entity's
jurisdiction. The following are the local tax rates that may be adopted.
(1) Cities. Cities may impose sales and use tax at
a rate of up to 2.0%.
(2) Counties. Counties may impose sales and use tax
at rates ranging from 0.5% to 1.5%.
(3) Special purpose districts. Special purpose districts
may impose sales and use tax at rates ranging from 0.125% to 2.0%.
(4) Transit authorities. Transit authorities may impose
sales and use tax at rates ranging from 0.25% to 1.0%.
(g) Jurisdictional boundaries, combined areas, and
city tax imposed through strategic partnership agreements.
(1) Jurisdictional boundaries.
(A) City boundaries. City taxing jurisdictional boundaries
cannot overlap one another and a city cannot impose a sales and use
tax in an area that is already within the jurisdiction of another
city.
(B) County boundaries. County tax applies to all locations
within that county.
(C) Special purpose district and transit authority
boundaries. Special purpose districts and transit authorities may
cross or share boundaries with other local taxing jurisdictions and
may encompass, in whole or in part, other local taxing jurisdictions,
including cities and counties. A geographic location or address in
this state may lie within the boundaries of more than one special
purpose district or more than one transit authority.
(D) Extraterritorial jurisdictions. Except as otherwise
provided by paragraph (3) of this subsection concerning strategic
partnership agreements and subsection (l)(5) of this section concerning
the City of El Paso and Fort Bliss, city sales and use tax does not
apply to taxable sales that are consummated outside the boundaries
of the city, including sales made in a city's extraterritorial jurisdiction.
However, an extraterritorial jurisdiction may lie within the boundaries
of a special purpose district, transit authority, county, or any combination
of the three, and the sales and use taxes for those jurisdictions
would apply to those sales.
(2) Combined areas. A combined area is an area where
the boundaries of a city overlap the boundaries of one or more other
local taxing jurisdictions as a result of an annexation of additional
territory by the city, and where, as the result of the imposition
of the city tax in the area in addition to the local taxes imposed
by the existing taxing jurisdictions, the combined local tax rate
would exceed 2.0%. The comptroller shall make accommodations to maintain
a 2.0% rate in any combined area by distributing the 2.0% tax revenue
generated in these combined areas to the local taxing jurisdictions
located in the combined areas as provided in Tax Code, §321.102
or Health and Safety Code, §775.0754. Combined areas are identified
on the comptroller's website. Sellers engaged in transactions on which
local sales or use taxes are due in a combined area, or persons who
must self-accrue and remit tax directly to the comptroller, must use
the combined area local code when reporting the tax rather than the
codes for the individual city, county, special purpose districts,
or transit authorities that make up the combined area.
(3) City tax imposed through strategic partnership
agreements.
(A) The governing bodies of a district, as defined
in Local Government Code, §43.0751, and a city may enter into
a limited-purpose annexation agreement known as a strategic partnership
agreement. Under this agreement, the city may impose sales and use
tax within all or part of the boundaries of a district. Areas within
a district that are annexed for this limited purpose are treated as
though they are within the boundaries of the city for purposes of
city sales and use tax.
(B) Counties, transit authorities, and special purpose
districts may not enter into strategic partnership agreements. Sales
and use taxes imposed by those taxing jurisdictions do not apply in
the limited-purpose annexed area as part of a strategic partnership
agreement between a city and an authorized district. However, a county,
special purpose district, or transit authority sales and use tax,
or any combination of these three types of taxes, may apply at locations
included in a strategic partnership agreement between a city and an
authorized district if the tax is imposed in that area by the applicable
jurisdiction as allowed under its own controlling authorities.
Cont'd... |
