| (5) To the extent the use of the service cannot be assigned
to an identifiable segment of a customer's business, the service is presumed
to be used to support the administration or operation of the customer's business
generally. The service is presumed to be used at the customer's principal
place of business. The principal place of business means the place from which
the trade or business is directed or managed.
(g) Local taxes.
(1) For local sales tax purposes, city, county, transit authority,
and/or special purpose district sales taxes are due if the data processing
service provider has only one place of business (the location where clients
request service) within the boundaries of a local taxing entity. Local sales
tax must be collected based upon the tax rate at that location, except that
no MTA or CTD sales tax is due on services provided at a location outside
the boundaries of the transit area. In the case of multiple locations, if
an order for service is placed at one location but the service is provided
at another location, the place of business from which the service is provided
will determine to which local taxing entity the tax is allocated.
(2) For the purposes of the local use tax, if a place
of business is outside the boundaries of a local taxing entity, the data processing
service provider will be required to collect local use tax if the client is
within the local taxing entity and the service provider has representation
in the local taxing entity as outlined in §3.286 of this title (relating
to Seller's and Purchaser's Responsibilities). Even if the service provider
is not required to collect local use tax, the client is still liable for the
tax if the service is performed or a benefit is derived from the service within
the boundaries of a local taxing entity.
(A) An in-state customer purchasing data processing services
for the benefit of locations in more than one local taxing entity is responsible
for issuing to the data processing service provider an exemption certificate
claiming a multi-city benefit and for determining the extent of benefit for
each entity. The local use tax for each entity must be reported, allocated,
and paid by the customer. A data processing service provider that accepts
in good faith an exemption certificate claiming a multi-city benefit is relieved
of responsibility for collecting and remitting local tax on transactions to
which the certificate relates.
(B) A multi-state customer purchasing data processing services
for the benefit of both in-state and out-of-state locations is responsible
for issuing an exemption certificate and for reporting and paying local tax
as provided by subsection (f)(3) and (4) of this section.
(h) Use tax. If a provider of a data processing service is
not doing business in Texas or in a specific local taxing jurisdiction and
is not required to collect Texas tax, it is the Texas customer's responsibility
to report and pay the state and local use tax directly to this office.
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| Source Note: The provisions of this §3.330 adopted to be effective June 16, 1988, 13 TexReg 2753; amended to be effective November 13, 1989, 14 TexReg 5786; amended to be effective February 28, 1991, 16 TexReg 987; amended to be effective March 23, 1995, 20 TexReg 1749; amended to be effective August 24, 2000, 25 TexReg 8048 |
