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In a recent hearing involving a debt collection company Texas upheld that a company can create nexus through contract sales people soliciting business in the state. Furthermore, it was ruled that sales made by these contract sales people qualified the debt collection company as doing business in Texas regardless of the fact that the company is based outside of Texas. Another issue raised in the hearing involved the taxability of debt collection services. It was upheld according to the laws of the state that debt collection services are taxable and the debt collection company is liable for collecting and remitting taxes even when debtor are instructed to send their payments to the creditor instead of the debt collection company. (Texas Comptroller of Public Accounts, Hearing No. 39,829, February 24, 2004.)


Regardless of other activity or lack there of, if a company is domiciled in Texas it has substantial nexus and must collect and remit sales and use tax accordingly. The only way to change this status is by dissolution and then incorporating in another state. (Letter, Texas Comptroller of Public Accounts, No. 200209447L, Sept. 19, 2002.)


In a ruling by the Texas Comptroller’s office, an out of state business whose only presence in Texas was software licensed to customers, was deemed to maintain a sufficient presence or nexus such that it is required to collect Texas use tax on it license fees. The state argued that the software is tangible personal property and the licenses are akin to leases and therefore the software company maintained property within the state. The number of licenses and the fact that they were not perpetual "shrink-wrap" licenses provided a sufficient presence in the Comptroller’s opinion. (Texas Comptroller of Public Accounts, Hearing No. 36,237, July 21, 1998)



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