| (3) Charges for services or expenses directly related
to and incurred while providing the taxable service are taxable and may not
be separated for the purpose of excluding these charges from the tax base.
Examples would be charges for meals, telephone calls, hotel rooms, or airplane
tickets.
(f) Service benefit location. If both the information service
provider and the customer are located in Texas, Texas tax is due.
(g) Service benefit location - multistate customer.
(1) To the extent information service is used to support a
separate, identifiable segment of a customer's business (other than general
administration or operation of the business) the service is presumed to be
used at the location where that part of the business is conducted.
(2) If that part of the business is conducted at locations
both within and outside the state, the service is not taxable to the extent
it is used outside Texas. A multistate customer may use any reasonable method
for allocation which is supported by business records.
(3) A multistate customer purchasing information services
for the benefit of both in-state and out-of-state locations is responsible
for issuing to the information service provider an exemption certificate asserting
a multistate benefit, and for reporting and paying the tax on that portion
of the charge for information which will benefit the Texas location. An information
provider that accepts such a certificate in good faith is relieved of responsibility
for collecting and remitting tax on transactions to which the certificate
relates.
(4) The customer's books must support the assignment of
the service to an identifiable segment of the business, the determination
of the location or locations of the use of the service, and the allocation
of the taxable charge to Texas.
(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.
(h) Local taxes.
(1) For local sales tax purposes, city, county, transit authority,
and special purpose district sales taxes are due if an information 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 on 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) If a place of business is outside the boundaries of
a local taxing entity, the information provider will be required to collect
local use tax if the client is within the local taxing entity and the information
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 information 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 information services for
the benefit of locations in more than one local taxing entity is responsible
for issuing to the information provider an exemption certificate asserting
a multi-city benefit and for determining the extent of benefit for each entity.
The local tax for each entity must be reported, allocated, and paid by the
customer. An information 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 multistate customer purchasing information 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.
(i) Use tax. If an information provider is not doing business
in Texas or in specific local taxing jurisdictions and is not required to
collect Texas state or local tax, it is the Texas customer's responsibility
to report the state and local use tax directly to this office.
|
| Source Note: The provisions of this §3.342 adopted to be effective March 25, 1988, 13 TexReg 1192; amended to be effective November 13, 1989, 14 TexReg 5787; amended to be effective March 23, 1995, 20 TexReg 1749; amended to be effective August 24, 2000, 25 TexReg 8049 |
