| (a) Definitions. The following words and terms, when
used in this section, shall have the following meanings, unless the
context clearly indicates otherwise.
(1) Consignment sale--The sale, lease, or rental of
tangible personal property by a seller who, under an agreement with
another person, is entrusted with possession of tangible personal
property with respect to which the other person has title or another
ownership interest, and is authorized to sell, lease, or rent the
tangible personal property without additional action by the person
having title to or another ownership interest in the tangible personal
property.
(2) Direct sales organization--A person that typically
sells taxable items directly to purchasers through independent salespersons
and not in or through a place of business of the seller. The term
"independent salespersons" includes, but is not limited to, distributors,
representatives, and consultants. Items are typically sold person-to-person
through in-home product demonstrations, parties, catalogs, and one-on-one
selling. The term includes, but is not limited to, direct marketing
and multilevel marketing organizations.
(3) Disaster- or emergency-related work--Repairing,
renovating, installing, building, rendering services, or performing
other business activities relating to the repair or replacement of
equipment and property, including buildings, offices, structures,
lines, poles, and pipes, that:
(A) is owned or used by or for:
(i) a telecommunications provider or cable operator;
(ii) communications networks;
(iii) electric generation;
(iv) electric transmissions and distribution systems;
(v) natural gas and natural gas liquids gathering,
processing, and storage, transmission and distribution systems; or
(vi) water pipelines and related support facilities,
equipment, and property that serve multiple persons; and
(B) is damaged, impaired, or destroyed by a declared
state disaster or emergency.
(4) Engaged in business--Except as provided in subparagraphs
(L) and (M) of this paragraph, a seller is engaged in business in
this state if the seller:
(A) maintains, occupies, or uses in this state, permanently
or temporarily, directly or indirectly, or through an agent by whatever
name called, a kiosk, office, distribution center, sales or sample
room or place, warehouse or storage place, or any other physical location
where business is conducted;
(B) has any representative, agent, salesperson, canvasser,
or solicitor who operates under the authority of the seller to conduct
business in this state, including selling, delivering, or taking orders
for taxable items;
(C) promotes a flea market, arts and crafts show, trade
day, festival, or other event in this state that involves sales of
taxable items;
(D) uses independent salespersons, who may include,
but are not limited to, distributors, representatives, or consultants,
in this state to make direct sales of taxable items;
(E) derives receipts from the sale, lease, or rental
of tangible personal property that is located in this state or owns
or uses tangible personal property that is located in this state,
including a computer server or software to solicit orders for taxable
items, unless the seller uses the server or software as a purchaser
of an Internet hosting service;
(F) allows a franchisee or licensee to operate under
its trade name in this state if the franchisee or licensee is required
to collect sales or use tax in this state;
(G) otherwise conducts business in this state;
(H) is formed, organized, or incorporated under the
laws of this state and the seller's internal affairs are governed
by the laws of this state, notwithstanding the fact that the seller
may not be otherwise engaged in business in this state pursuant to
this section;
(I) engages in regular or systematic solicitation of
sales of taxable items in this state by the distribution of catalogs,
periodicals, advertising flyers, or other advertising, by means of
print, radio, or television media, or by mail, telegraphy, telephone,
computer data base, cable, optic, microwave, or other communication
system for the purpose of effecting sales of taxable items;
(J) solicits orders for taxable items by mail or through
other media including the Internet or other media that may be developed
in the future; or
(K) holds a substantial ownership interest in, or is
owned in whole or substantial part by, another person who:
(i) maintains a distribution center, warehouse, or
similar location in this state and delivers property sold by the seller
to purchasers in this state;
(ii) maintains a location in this state from which
business is conducted, sells the same or substantially similar lines
of products as the seller, and sells such products under a business
name that is the same or substantially similar to the business name
of the seller; or
(iii) maintains a location in this state from which
business is conducted if the person with the location in this state
uses its facilities or employees:
(I) to advertise, promote, or facilitate sales by the
seller to purchasers; or
(II) to otherwise perform any activity on behalf of
the seller that is intended to establish or maintain a marketplace
for the seller in this state, including receiving or exchanging returned
merchandise.
(iv) For purposes of this subparagraph only, "ownership"
includes direct ownership, common ownership, or indirect ownership
through a parent entity, subsidiary, or affiliate, and "substantial,"
with respect to ownership, constitutes an interest, whether direct
or indirect, of at least 50% of:
(I) the total combined voting power of all classes
of stock of a corporation;
(II) the beneficial ownership interest in the voting
stock of the corporation;
(III) the current beneficial interest in the corpus
or income of a trust;
(IV) the total membership interest of a limited liability
company;
(V) the beneficial ownership interest in the membership
interest of a limited liability company; or
(VI) the profits or capital interest of any other entity,
including, but not limited to, a partnership, joint venture, or association.
(L) Effective June 16, 2015, a seller is not engaged
in business in this state if the seller is an out-of-state business
entity whose physical presence in this state is solely from the entity's
performance of disaster- or emergency-related work during a disaster
response period. An out-of-state business entity that remains in this
state after a disaster response period has ended is engaged in business
in this state if the entity conducts any of the activities described
in subparagraphs (A) - (K) of this paragraph.
(i) For purposes of this subparagraph only, an "affiliate"
is a member of a combined group as that term is described by Tax Code, §171.1014
(Combined Reporting; Affiliated Group Engaged in Unitary Business).
(ii) For purposes of this subparagraph only, a "disaster
response period" is:
(I) the period that:
(-a-) begins on the 10th day before the date of the
earliest event establishing a declared state of disaster or emergency
by the issuance of an executive order or proclamation by the governor
or a declaration of the president of the United States; and
(-b-) ends on the earlier of the 120th day after the
start date or the 60th day after the ending date of the disaster or
emergency period established by the executive order or proclamation
or declaration, or on a later date as determined by an executive order
or proclamation by the governor; or
(II) the period that, with respect to an out-of-state
business entity:
(-a-) begins on the date that the out-of-state business
entity enters this state in good faith under a mutual assistance agreement
and in anticipation of a state of disaster or emergency, regardless
of whether a state of disaster or emergency is actually declared;
and
(-b-) ends on the earlier of the date that the work
is concluded or the seventh day after the out-of-state business entity
enters this state.
(iii) For purposes of this subparagraph only, a "mutual
assistance agreement" is an agreement to which one or more business
entities are parties and under which a public utility, municipally
owned utility, or joint agency owning, operating, or owning and operating
critical infrastructure used for electric generation, transmission,
or distribution in this state may request that an out-of-state business
entity perform work in this state in anticipation of a state of disaster
or emergency.
(iv) For purposes of this subparagraph only, an "out-of-state
business entity" is a foreign entity that:
Cont'd... |
