(27)Single member limited liability company (SMLLC).
For purposes of this section, the sale of a SMLLC by its sole owner
is the sale of a membership interest in the SMLLC. The membership
interest is an intangible asset, and receipts from the sale of a SMLLC
are sourced to the location of payor. [Services procurement.
Revenue for the procurement of services are apportioned to the place
where the service procurement is performed.]
(28)Subsidies or grants. Proceeds of subsidies or
grants that a taxable entity receives from a governmental agency are
gross receipts, except when the funds are required to be expended
dollar-for-dollar (i.e., passed through) to third parties on behalf
of the agency. Receipts from a governmental subsidy or grant are sourced
[apportioned] in the same manner as the item to
which the subsidy or grant was attributed. For example, receipts
from [if a taxable entity qualifies for] a grant
to conduct research for the government[, then the receipts from
that grant] are receipts from a service and are sourced [
apportioned] to the location where the research is performed.
(29)Tangible personal property. Examples of transactions
that involve the sale of tangible personal property and result in
Texas gross receipts include, but are not limited to, the
following:
(A)the sale of tangible personal property that is
delivered in Texas to a purchaser. Delivery is complete upon transfer
of possession or control of the property to the purchaser, an employee
of the purchaser, or transportation vehicles that the purchaser leases
or owns. FOB point, location of title passage, and other conditions
of the sale are not relevant to the determination of Texas gross receipts;
(B)the sale of tangible personal property that is
delivered in Texas to an employee or transportation agent of an out-of-state
purchaser. A carrier is an employee or agent of the purchaser if the
carrier is under the supervision and control of the purchaser with
respect to the manner in which goods are transported;
(C)the sale and delivery in Texas of tangible personal
property that is loaded into a barge, truck, airplane, vessel, tanker,
or any other means of conveyance that the purchaser of the property
leases and controls or owns. The sale of tangible personal property
that is delivered in Texas to an independent contract carrier, common
carrier, or freight forwarder that a purchaser of the property hires
results only in gross receipts everywhere if the carrier transports
or forwards the property to the purchaser outside this state;
(D)the sale of tangible personal property with delivery
to a common carrier outside Texas, and shipment by that common carrier
to a purchaser in Texas;
(E)the sale of oil or gas to an interstate pipeline
company, with delivery in Texas;
(F)the sale of tangible personal property that is
delivered in Texas to a warehouse or other storage facility that the
purchaser owns or leases;
(G)the sale of tangible personal property that is
delivered to and stored in a warehouse or other storage facility in
Texas at the purchaser's request, as opposed to a necessary delay
in transit, even though the property is subsequently shipped outside
Texas;
(H)the drop shipment of tangible personal property
in Texas. A drop shipment is a shipment of tangible personal property
from a seller directly to a purchaser's customer, at the request of
the purchaser, without passing through the hands of the purchaser.
This results in Texas gross receipts for the seller and the purchaser.
(30)Telecommunication services [Telephone
companies].
(A)Gross receipts [Revenues]
from telephone calls that both originate and terminate in Texas are
sourced to Texas [receipts].
(B)Gross receipts [Revenues]
from telephone calls that originate in Texas but terminate outside
of Texas or that originate outside of Texas but terminate in Texas
are not sourced to [excluded from] Texas [receipts
].
(C)Gross receipts [Revenues]
from telecommunication services other than those services in subparagraph
(A) or (B) of this paragraph are sourced to Texas [receipts
] if the services are performed in Texas. For example, a telephone
company that provides a long distance carrier access to the telephone
company's local exchange network in Texas is performing a service
in Texas. Any fee that the telephone company charges the long distance
carrier for access to the local exchange network in Texas is a Texas
receipt regardless of whether the access is related to an interstate
call. A fee that is charged to obtain access to a local exchange network
in Texas and that is based on the duration of an interstate telephone
call are not sourced to [may be excluded
from] Texas [receipts].
(31)Television broadcaster licensing
income. For reports originally due on or after January 1, 2018, a
broadcaster's gross receipts from licensing income from broadcasting
or otherwise distributing film programming by any means are sourced
to Texas if the legal domicile of the broadcaster's customer is in
this state. In this subparagraph, the following words and terms shall
have the following meaning:
(A)Broadcaster--A taxable entity, not including a
cable service provider or a direct broadcast satellite service, that
is a television station licensed by the Federal Communications Commission,
television broadcast network, cable television network, or television
distribution company.
(B)Customer--A person, including a licensee, who has
a direct connection or contractual relationship with a broadcaster
under which the broadcaster derives revenue.
(C)Film programming--All or part of a live or recorded
performance, event, or production intended to be distributed for visual
and auditory perception by an audience.
(D)Programming--Includes news, entertainment,
sporting events, plays, stories, or other literary, commercial, educational,
or artistic works.
(32)[(31)] Texas waters. Gross
receipts [Revenues] from transactions that occur
in Texas waters are sourced to Texas [receipts].
Texas waters are considered to extend to 10.359 statute miles, or
nine nautical miles, from the Texas coastline.
(33)[(32)] Transportation services.
[companies. Transportation companies must report Texas
receipts from transportation services in intrastate commerce by:]
(A)Gross receipts from the transportation of
goods or passengers are sourced to Texas by including gross receipts
from the transportation of goods or passengers that both originates
and terminates in Texas. [the inclusion of revenues that
are derived from the transportation of goods or passengers in intrastate
commerce within Texas; or]
(B) For reports originally due prior to January
1, 2021, Texas gross receipts may also be calculated by the
multiplication of total transportation receipts by total mileage in
the transportation of goods and passengers that move in intrastate
commerce within Texas divided by total mileage everywhere.
(f)Natural gas production.
(1)Gross receipts [Revenues]
that a gas producer realizes from the contract price of gas that the
gas producer produces and that the purchaser takes pursuant to the
terms of sales [are gross receipts and] are sourced [
apportioned] to Texas, if the gas is delivered in Texas.
(2)Gross receipts [Revenues]
that a gas producer realizes from a purchaser's payment under a sale
or purchase contract for gas to be produced even if no gas is produced
and delivered to the purchaser, [are gross receipts and]
are sourced [apportioned] to the location [
legal domicile] of the payor.
(3)Gross receipts [Revenues]
that a gas producer realizes from a purchaser's payments to terminate
a gas purchase contract [are gross receipts and] are sourced
[apportioned] to the location [legal
domicile] of the payor.
(4)Gross receipts [Revenues]
that a gas producer realizes from a contract amendment that relates
to the price of the gas sold are treated as gross receipts
from the sales of gas and are sourced [apportioned]
to Texas if delivery is made to a location in Texas. Gross receipts [
Revenues] that the gas producer realizes from a contract amendment
that relates to a provision other than the price of gas sold [are
gross receipts and] are sourced [apportioned]
to the location [legal domicile] of the payor.
(5)Gross receipts [Revenues]
that a gas producer realizes from litigation awards for a breach of
contract, reimbursements for litigation-related expenses (e.g., documented
attorney's fees or court costs), or interest (upon which the parties
have agreed, that the records of the producer reflects, or in an amount
that a court has ordered) [are gross receipts and] are sourced
[apportioned] to the location [legal
domicile] of the payor.
(6)Gross receipts [Revenues]
that a gas producer realizes from a judgment, compromise, or settlement
relating to the recovery of a contract price of gas produced [are
gross receipts and] are sourced [apportioned]
to Texas to the extent the contract specified delivery to a location
in Texas. Gross receipts [Revenues] that a gas
producer realizes from a judgment, compromise, or settlement that
relates to several claims or causes of action shall be prorated based
upon the documented amounts due under the contract for each claim
or cause of action according to the records of the producer. For example,
a settlement sum of $100,000 for a pricing dispute of $25,000 and
for failure to pay for gas not taken in the amount of $225,000, would
result in receipts of $10,000 from gas sales (100,000 X 25,000/250,000)
and receipts from other business of $90,000 (100,000 X 225,000/250,000).
Records of the producer shall include, but are not limited to the
following: contracts, settlement agreements, accounting records and
entries, court pleadings and worksheets, including calculations reflecting
settlement amounts.
The agency certifies that legal counsel has
reviewed the proposal and found it to be within the state agency's
legal authority to adopt.
Filed with the Office
of the Secretary of State on November 2, 2020
TRD-202004585 William Hamner
Special Counsel for Tax Administration
Comptroller of Public Accounts
Earliest possible date of adoption: December 13, 2020
For further information, please call: (512) 475-0387
|
