HB134 - Relating to the location at which certain sales are consummated for purposes of local sales and use taxes.

  89R20653 CJC-D     By: Meyer H.B. No. 134     Substitute the following for H.B. No. 134:     By:  Vasut C.S.H.B. No. 134       A BILL TO BE ENTITLED   AN ACT   relating to the location at which certain sales are consummated for   purposes of local sales and use taxes.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 321.002(a)(3)(A), Tax Code, is amended   to read as follows:                (3)(A)  "Place of business of the retailer" means an   established outlet, office, or location operated by the retailer or   the retailer's agent or employee for the purpose of receiving   orders for taxable items and includes any location at which three or   more orders are received by the retailer during a calendar year.     The term does not include a computer server, Internet protocol   address, domain name, website, or software application.  A   warehouse, storage yard, or manufacturing plant is not a "place of   business of the retailer" unless at least three orders are received   by the retailer during the calendar year at the warehouse, storage   yard, or manufacturing plant.          SECTION 2.  Section 321.002(a), Tax Code, is amended by   amending Subdivision (1) and adding Subdivisions (1-a), (1-b), (4),   and (5) to read as follows:                (1)   "Active economic development agreement" means an   agreement under Chapter 380, 381, 504, or 505, Local Government   Code, under which the local government made payments on or before   January 1, 2025, based on local sales and use tax collections.                 (1-a)   "Additional municipal sales and use tax" means   only the additional tax authorized by Section 321.101(b).                 (1-b)     "Affiliated group" has the meaning assigned by   Section 171.0001.                 (4)     "Principal business location" means the business   location where the decision makers of a business conduct the daily   affairs of the organization.                 (5)     "Small business" means a sales tax permit holder   that has:                       (A)     its principal business location in this   state;                       (B)     not more than 100 employees, including all   employees of each member of an affiliated group that includes the   permit holder; and                       (C)     total combined gross receipts from the sale   of tangible personal property and services in the preceding 12   calendar months of less than $2 million, including the gross   receipts of each member of an affiliated group that includes the   permit holder.          SECTION 3.  Section 321.203, Tax Code, is amended by   amending Subsections (b), (c), (c-1), (d), and (e-1) and adding   Subsections (o), (p), and (q) to read as follows:          (b)   Except as otherwise provided by this section, the sale   of a taxable item by a small business is consummated at the   principal business location of the small business [ If a retailer   has only one place of business in this state, all of the retailer's   retail sales of taxable items are consummated at that place of   business except as provided by Subsection (e) ].          (c)   Each [ If a retailer has more than one place of business   in this state, each ] sale of each taxable item by a [ the ] retailer   other than a small business is consummated at the place of business   of the retailer in this state where the retailer [ first ] receives   the order, provided that the order is placed in person by the   purchaser or lessee of the taxable item at the place of business of   the retailer in this state where the retailer [ first ] receives the   order.          (c-1)  If Subsections (b) and (c) do [ the retailer has more   than one place of business in this state and Subsection (c) does ]   not apply, the sale is consummated at the location in this state to   which the item is shipped or delivered or at which possession is   taken by the purchaser [ place of business of the retailer in this   state:                [ (1)     from which the retailer ships or delivers the   item, if the retailer ships or delivers the item to a point   designated by the purchaser or lessee; or                [ (2)     where the purchaser or lessee takes possession of   and removes the item, if the purchaser or lessee takes possession of   and removes the item from a place of business of the retailer ].          (d)  If [ the retailer has more than one place of business in   this state and ] Subsections (b), (c) , and (c-1) do not apply, the   sale is consummated at:                (1)  the place of business of the retailer in this state   where the order is received; or                (2)  if the order is not received at a place of business   of the retailer, the place of business from which the retailer's   agent or employee who took the order operates.          (e-1)  Except as otherwise provided by Subsection (f), (g),   (g-1), (g-2), (g-3), (h), (i), (j), (k), (m), [ or ] (n), (p), or (q),   a sale of a taxable item made by a marketplace seller through a   marketplace as provided by Section 151.0242 is consummated at the   location in this state to which the item is shipped or delivered or   at which possession is taken by the purchaser.           (o)     An order is received at the location where all of the   information from the purchaser necessary to determine whether the   order can be accepted has been received by or on behalf of the   seller.   The order is not received at a location where the order is   subsequently accepted, completed, or fulfilled.           (p)     A retailer that has an active economic development   agreement with a municipality and has a single place of business in   this state that is within the municipality may elect to collect and   report the sales tax authorized by this chapter based on the   location of the retailer's single place of business. An election   under this subsection is binding on the retailer and the purchaser.     This subsection expires December 31, 2030.           (q)     A retailer that has an active economic development   agreement with a municipality may elect to collect and report the   sales tax authorized by this chapter based on the location of the   retailer within the municipality from which an item is shipped   directly to the purchaser or the purchaser's designee.   An election   under this subsection is binding on the retailer and the purchaser.     This subsection expires December 31, 2030.          SECTION 4.  The heading to Section 323.203, Tax Code, is   amended to read as follows:          Sec. 323.203.  CONSUMMATION OF SALE : CERTAIN PROVISIONS OF   MUNICIPAL SALES AND USE TAX APPLICABLE .          SECTION 5.  Section 323.203(a), Tax Code, is amended to read   as follows:          (a)   Sections 321.002 and 321.203 apply to the taxes   authorized by this chapter in the same manner as those sections   apply to the taxes authorized under Chapter 321 [ A sale of a taxable   item occurs within the county in which the sale is consummated.     A   sale is consummated as provided by this section regardless of the   place where transfer of title or possession occurs ].          SECTION 6.  The following laws are repealed:                (1)  Section 3853.202(d), Special District Local Laws   Code; and                (2)  Sections 323.203(b), (c), (c-1), (d), (e), (e-1),   (f), (g), (g-1), (g-2), (g-3), (h), (i), (j), (k), and (m), Tax   Code.          SECTION 7.  The changes in law made by this Act do not affect   tax liability accruing before the effective date of this Act.  That   liability continues in effect as if this Act had not been enacted,   and the former law is continued in effect for the collection of   taxes due and for civil and criminal enforcement of the liability   for those taxes.          SECTION 8.  This Act takes effect January 1, 2026.