| (C) Prior to September 1, 2011, the term "district"
was defined in Local Government Code, §43.0751 as a municipal
utility district or a water control and improvement district. The
definition was amended effective September 1, 2011, to mean a conservation
and reclamation district operating under Water Code, Chapter 49.
(h) Places of business of the seller and job sites
crossed by local taxing jurisdiction boundaries.
(1) Places of business of the seller crossed by local
taxing jurisdiction boundaries. If a place of business of the seller
is crossed by one or more local taxing jurisdiction boundaries so
that a portion of the place of business of the seller is located within
a taxing jurisdiction and the remainder of the place of business of
the seller lies outside of the taxing jurisdiction, tax is due to
the local taxing jurisdictions in which the sales office is located.
If there is no sales office, sales tax is due to the local taxing
jurisdictions in which any cash registers are located.
(2) Job sites.
(A) Residential repair and remodeling; new construction
of an improvement to realty. When a contractor is improving real property
under a separated contract, and the job site is crossed by the boundaries
of one or more local taxing jurisdictions, the local taxes due on
any separately stated charges for taxable items incorporated into
the real property must be allocated to the local taxing jurisdictions
based on the total square footage of the real property improvement
located within each jurisdiction, including the square footage of
any standalone structures that are part of the construction, repair,
or remodeling project. For more information about tax due on materials
used at residential and new construction job sites, refer to §3.291
of this title (relating to Contractors).
(B) Nonresidential real property repair and improvement.
When taxable services are performed to repair, remodel, or restore
nonresidential real property, including a pipeline, transmission line,
or parking lot, that is crossed by the boundaries of one or more local
taxing jurisdictions, the local taxes due on the taxable services,
including materials and any other charges connected to the services
performed, must be allocated among the local taxing jurisdictions
based upon the total mileage or square footage, as appropriate, of
the repair, remodeling, or restoration project located in each jurisdiction.
For more information about tax due on materials used at nonresidential
real property repair and remodeling job sites, refer to §3.357
of this title (relating to Nonresidential Real Property Repair, Remodeling,
and Restoration; Real Property Maintenance).
(i) Sellers' and purchasers' responsibilities for collecting
or accruing local taxes.
(1) Sale consummated in Texas; seller responsible for
collecting local sales taxes and applicable local use taxes. When
a sale of a taxable item is consummated at a location in Texas as
provided by subsection (c) of this section, the seller must collect
each local sales tax in effect at the location. If the total rate
of local sales tax due on the sale does not reach the two percent
cap, and the seller ships or delivers the item into another local
taxing jurisdiction, then the seller is required to collect additional
local use taxes due, if any, based on the location to which the item
is shipped or delivered or at which the purchaser of the item takes
possession, regardless of the location of the seller in Texas. For
more information regarding local use taxes, refer to subsection (d)
of this section.
(2) Out-of-state sale; seller engaged in business in
Texas. Except as provided in paragraph (3) of this subsection, when
a sale is not consummated in Texas, a seller who is engaged in business
in this state is required to collect and remit local use taxes due,
if any, on orders of taxable items shipped or delivered at the direction
of the purchaser into a local taxing jurisdiction in this state based
upon the location in this state to which the item is shipped or delivered
or at which the purchaser of the item takes possession as provided
in subsection (d) of this section.
(3) Local use tax rate for remote sellers.
(A) A remote seller required to collect and remit one
or more local use taxes in connection with a sale of a taxable item
must compute the amount using:
(i) the combined tax rate of all applicable local use
taxes based on the location to which the item is shipped or delivered
or at which the purchaser of the item takes possession; or
(ii) at the remote seller's election, the single local
use tax rate published in the Texas Register.
(B) A remote seller that is storing tangible personal
property in Texas to be used for fulfillment at a facility of a marketplace
provider that has certified that it will assume the rights and duties
of a seller with respect to the tangible personal property, as provided
for in §3.286 of this title, may elect the single local use tax
rate under subparagraph (A)(ii) of this paragraph.
(C) Notice to the comptroller of election and revocation
of election.
(i) Before using the single local use tax rate, a remote
seller must notify the comptroller of its election using a form prescribed
by the comptroller. A remote seller may also notify the comptroller
of the election on its use tax permit application form. The remote
seller must use the single local use tax rate for all of its sales
of taxable items until the election is revoked as provided in clause
(ii) of this subparagraph.
(ii) A remote seller may revoke its election by filing
a form prescribed by the comptroller. If the comptroller receives
the notice by October 1, the revocation will be effective January
1 of the following year. If the comptroller receives the notice after
October 1, the revocation will be effective January 1 of the year
after the following year. For example, a remote seller must notify
the comptroller by October 1, 2020, for the revocation to be effective
January 1, 2021. If the comptroller receives the revocation on November
1, 2020, the revocation will be effective January 1, 2022.
(D) Single local use tax rate.
(i) The single local use tax rate in effect for the
period beginning October 1, 2019, and ending December 31, 2019, is
1.75%.
(ii) The single local use tax rate in effect for the
period beginning January 1, 2020, and ending December 31, 2020, is
1.75%.
(E) Annual publication of single local use tax rate.
Before the beginning of a calendar year, the comptroller will publish
notice of the single local use tax rate in the Texas
Register that will be in effect for that calendar year.
(F) Calculating the single local use tax rate. The
single local use tax rate effective in a calendar year is equal to
the estimated average rate of local sales and use taxes imposed in
this state during the preceding state fiscal year. As soon as practicable
after the end of a state fiscal year, the comptroller must determine
the estimated average rate of local sales and use taxes imposed in
this state during the preceding state fiscal year by:
(i) dividing the total amount of net local sales and
use taxes remitted to the comptroller during the state fiscal year
by the total amount of net state sales and use tax remitted to the
comptroller during the state fiscal year;
(ii) multiplying the amount computed under clause (i)
of this subparagraph by the rate provided in Tax Code, §151.051;
and
(iii) rounding the amount computed under clause (ii)
of this subparagraph to the nearest .0025.
(G) Direct refund. A purchaser may request a refund
based on local use taxes paid in a calendar year for the difference
between the single local use tax rate paid by the purchaser and the
amount the purchaser would have paid based on the combined tax rate
for all applicable local use taxes. Notwithstanding the refund requirements
under §3.325(a)(1) of this title (relating to Refunds and Payments
Under Protest), a non-permitted purchaser may request a refund directly
from the comptroller for the tax paid in the previous calendar year,
no earlier than January 1 of the following calendar year within the
statute of limitation under Tax Code, 111.104 (Refunds).
(H) Marketplace providers. Notwithstanding subparagraph
(A) of this paragraph, marketplace providers may not use the single
local use tax rate and must compute the amount of local use tax to
collect and remit using the combined tax rate of all applicable local
use taxes.
(4) Purchaser responsible for accruing and remitting
local taxes if seller fails to collect.
(A) If a seller does not collect the state sales tax,
any applicable local sales taxes, or both, on a sale of a taxable
item that is consummated in Texas, then the purchaser is responsible
for filing a return and paying the tax. The local sales taxes due
are based on the location in this state where the sale is consummated
as provided in subsection (c) of this section.
Cont'd... |
