| (a) Persons who must keep records.
(1) Sellers of taxable items and purchasers who store,
use, or consume taxable items in this state shall keep books, papers,
and records in the form that the comptroller requires.
(2) Examples of persons who are required to keep records
include the following:
(A) a person who sells, leases, or rents tangible personal
property;
(B) a person who performs taxable labor, such as fabricating,
processing, and producing tangible personal property;
(C) a person who performs taxable services that are
listed in Tax Code, §151.0101; or
(D) a person who purchases taxable items.
(b) Records required.
(1) Records must reflect the total gross receipts from
all sales, rentals, leases, taxable services, and taxable labor. Examples
include, but are not limited to, receipts, shipping manifests, invoices,
and other pertinent papers from each rental, lease, taxable service,
and each taxable labor transaction that occurs during each reporting
period.
(2) Records must reflect total purchases of taxable
items. Examples include, but are not limited to, receipts, shipping
manifests, invoices, and other pertinent papers of all purchases of
taxable items from every source that are made during each reporting
period.
(3) Additional records must be kept to substantiate
any claimed deductions or exclusions authorized by law. Examples include,
but are not limited to, receipts, shipping manifests, invoices, exemption
certificates, resale certificates, and other pertinent papers that
substantiate each claimed deduction or exclusion.
(4) Records must reflect all sales and use tax, and
any money represented to be sales and use tax, received or collected
on each sale, rental, lease, or service transaction. Examples include,
but are not limited to, sales receipts, invoices, or other equivalent
records, including electronically stored images of such documents,
showing all sales and use tax received or collected during each reporting
period.
(5) Records may be written, kept on microfilm, stored
on data processing equipment, or may be in any form that the comptroller
may readily examine.
(c) Failure to keep or to provide accurate records.
If a person who is required to keep records under subsection (a) of
this section fails to keep accurate contemporaneous records of gross
receipts, gross purchases, deductions, exclusions, and taxes received
or collected, or if a person fails to produce such records when requested
by the comptroller during an audit or investigation, the comptroller
may take actions that include, but are not limited to, the following:
(1) estimate the person's tax liability based on any
available information that includes, but is not limited to, records
of suppliers;
(2) use a sample and projection auditing method to
calculate the person's tax liability. For further information, see §3.282
of this title (relating to Auditing Taxpayer Records);
(3) suspend the person's permit;
(4) file criminal charges as provided in §3.305
of this title (relating to Criminal Offenses and Penalties); and
(5) take other action as authorized by law to enforce
compliance with the Tax Code.
(d) Information required.
(1) The comptroller may require any person subject
to the Limited Sales and Use Tax Act to furnish information necessary
to:
(A) identify any person applying for a permit or any
person required to file a return;
(B) determine the amount of bond required to commence
or continue business;
(C) determine possible successor liability; and
(D) determine the amount of tax the person is required
to remit.
(2) The information required may include, but is not
limited to, the following:
(A) name of the actual owner of the business;
(B) name of each partner in a partnership;
(C) names of officers and directors of corporations
and other organizations;
(D) all trade names under which the owner operates;
(E) mailing address and actual locations of all business
outlets;
(F) license numbers, title numbers, and other identification
of business vehicles;
(G) identification numbers assigned by other governmental
agencies, including social security numbers, federal employers identification
numbers, and drivers license numbers;
(H) names of suppliers, banks, and other persons with
whom the taxpayer transacts business;
(I) names and last known addresses of former owners
of the business.
(e) Retention. A person who is required to keep records
under subsection (a) of this section must keep those records for a
minimum of four years from the date on which the record is made, and
throughout any period in which any tax, penalty, or interest may be
assessed, collected, or refunded by the comptroller or in which an
administrative hearing or judicial proceeding is pending, unless the
comptroller authorizes in writing a shorter retention period. A person
must keep exemption and resale certificates for a minimum of four
years following the completion of the last sale that is covered by
the certificate.
(f) The comptroller, the attorney general, or the authorized
representative of either of them may examine, copy, and photograph
any records of any person who is required to keep records under subsection
(a) of this section, to verify the accuracy of any return or to determine
any tax liability. However, during an audit, an auditor for the comptroller
should obtain permission from a taxpayer to copy or photograph records
that are proprietary in nature, unless the comptroller reasonably
believes that the taxpayer may have committed fraud or taken action
to evade taxes. If the taxpayer does not grant the auditor permission
to copy or photograph records, and the comptroller believes that the
records are necessary to determine the tax liability of the taxpayer,
then the comptroller may obtain records through other means under
authority granted by Tax Code, §111.0043.
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