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On July 19, 2011, Texas Governor Rick Perry signed a fiscal matters bill that includes affiliate nexus provisions for remote sellers. Effective January 1, 2012, the definition of a retailer considered to be engaged in business in Texas for use tax collection purposes is expanded. A retailer is engaged in business in Texas if the retailer holds a substantial ownership interest in, or is owned in whole or substantial part by, a person who maintains a location in Texas from which business is conducted and if the retailer sells the same or a substantially similar line of products as the in-state person and sells those products under a business name that is the same or substantially similar; or the facilities or employees of the in-state person are used to advertise, promote, or facilitate sales by the retailer to consumers or perform any other activity on behalf of the retailer intended to establish or maintain a marketplace for the retailer in Texas, including receiving or exchanging returned merchandise. Additionally, a retailer is engaged in business in Texas if the retailer holds a substantial ownership interest in, or is owned in whole or substantial part by, a person who maintains a distribution center, warehouse, or similar location in Texas and who delivers property sold by the retailer to consumers. In addition, the definition of “seller” and “retailer” is expanded to include a person who has been entrusted with the possession of property and has the power to sell, lease, or rent the property without further action by the owner. Click here for an update on Amazon's agreement to collect sales tax in Texas. (S.B. 1, Laws 2011, First Special Session, effective September 28, 2011, except as noted)


The Texas Comptroller of Public Accounts has enacted the Fresh Start tax amnesty program, which will run from June 12, 2012 through August 17, 2012. During the amnesty period, penalties and interest will be waived for businesses that file delinquent tax reports and pay all taxes due, or amend reports that underreported taxes and pay the taxes due. Only reports originally due before April 1, 2012 are eligible for the amnesty. The amnesty program applies to sales tax, franchise tax, and other state and local taxes and fees administered by the Comptroller’s office, with the exception of Public Utility Commission gross receipts assessments. The amnesty does not cover underpaid tax returns or taxes owed for filing periods that businesses have in audit. (Notice, Texas Comptroller of Public Accounts, March 15, 2012)


Daily deals offered through third parties, such as radio stations and social media networks, are treated as gift certificates for sales tax purposes. Sales tax is not due on the third-party sale of a deal. When the deal is redeemed for a taxable item, the deal is treated like cash given for the purchase. If the item that is purchased with the deal is taxable, sales tax is due on the full sales price, including any amount covered by the deal. Tax should not be calculated on the reduced price of the deal value but rather on the original selling price. (Tax Policy News, Texas Comptroller of Public Accounts, June 2011)


A Texas waste hauler that provides waste removal services for roofing contractors was denied a requested sales tax exemption based on receiving sale for resale certificates from the contractors. Texas law prohibits a contractor who performs a separated contract from issuing a sale for resale certificate for a taxable service that the contractor itself uses. The waste hauler delivered dumpsters at construction sites and subsequently hauled the waste to a landfill. The waste hauling service was clearly used by the contractors to clean up construction sites. The company’s contention that the end user of the services was the property owner and not the contractor was rejected. Exemption was provided for the waste removal services for residential new construction. (Decision, Hearing No. 102,792, Texas Comptroller of Public Accounts, December 6, 2010, released February 2011)


The Texas Comptroller of Public Accounts has announced that its annual sales tax holiday will take place on August 19-21, 2011. During the tax holiday, most clothing and footwear priced under $100 are exempt from sales and use tax. In addition, backpacks and qualified school supplies under $100 and used by elementary and secondary school students are exempt from sales and use tax. Ten or fewer backpacks can be purchased tax-free at one time without providing an exemption certificate to the seller. No exemption certificate is required for the purchase of school supplies unless the purchaser is buying the supplies under a business account. In that case, an exemption certificate certifying that the items are purchased for use by an elementary and secondary school student must be provided. Lay-away plans can be used to take advantage of the sales tax holiday. (Publication 98-490 (Sales Tax Holiday), Texas Comptroller of Public Accounts, revised January 2011)



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