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Texas Enacts Affiliate Nexus Bill


Nexus

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)

(05/20/2012)
(New)
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