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TITLE 34PUBLIC FINANCE
PART 1COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 3TAX ADMINISTRATION
SUBCHAPTER PMUNICIPAL SALES AND USE TAX
RULE §3.374Collection and Allocation of the City Sales Tax

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

  (1) Itinerant vendor--A retailer who does not operate any "place of business" as defined in this section.

  (2) Place of business--Place of business of a retailer means an established outlet, office, or location operated by a retailer, the retailer's agent, or the retailer's employee for the purpose of receiving orders for taxable items. The term "place of business" includes any location at which three or more orders are received by the retailer in a calendar year. A location such as a warehouse, storage yard, or manufacturing plant is not a "place of business," unless at least three orders for taxable items are received by the retailer at the location during a calendar year.

  (3) Taxing city--Any city in Texas that has adopted the city sales and use tax imposed by the Tax Code, Chapter 321. City sales and use tax includes any local sales and use tax imposed by a city for industrial and economic development under the Development Corporation Act of 1979 (Texas Civil Statutes, Article 5190).

(b) Allocating city sales tax when taxable items are picked up, delivered, or shipped from a Texas retailer's place of business inside a taxing city.

  (1) One place of business. If a retailer has only one place of business and the place of business is in a taxing city, all sales, leases, and rentals by the retailer are subject to city sales tax based upon the location of the place of business. See the exceptions in subsections (e) and (g) of this section.

  (2) Multiple places of business. If a retailer has more than one place of business in this state, city sales tax is due and is allocated to the city in which the retailer's place of business is located:

    (A) where the customer takes possession of the item sold, leased, or rented; or

    (B) from which the item is shipped or delivered.

(c) Allocating city sales tax when delivery or shipment is from a location in Texas other than the retailer's place of business.

  (1) If an order is received at the place of business of a retailer in Texas, but delivery or shipment is made from a location within the state other than the retailer's place of business, city sales tax is due and is allocated to the city where the order was received.

  (2) If an order is received by a traveling salesperson, and delivery or shipment is made from a location within the state which is not a place of business of the Texas retailer, city sales tax is due and is allocated to the city where the retailer's place of business is located from which the salesperson operates.

(d) Allocating city sales tax when an order is placed with a retailer located outside Texas.

  (1) If an order is initially received at a retailer's place of business outside the state, but delivery or shipment is made from a location within the state other than a place of business of that retailer, city sales or use tax is due and is allocated to the city where delivery is made or possession is taken by the purchaser.

  (2) If an order is received by a salesperson assigned to a place of business located outside Texas and delivery or shipment is made from a location within this state other than a place of business of that retailer, city sales tax is due and is allocated to the city where delivery is made or possession is taken by the purchaser.

(e) Drop shipment by supplier receiving order. If a purchaser places an order directly with a retailer's supplier, and the items are shipped or delivered directly to the purchaser by the supplier, city sales tax is due and is allocated to the city where delivery is made or possession is taken by the purchaser.

(f) Itinerant vendor. If a retailer is an itinerant vendor, city sales tax is due and is allocated to the city where delivery is made or possession is taken by the purchaser.

(g) Shipments from outside a taxing city or outside Texas. Notwithstanding any of the foregoing provisions, if the retailer makes deliveries of taxable items from a location not in a taxing city or from outside the State of Texas to a Texas purchaser located inside a taxing city, the city use tax is applicable. Reference should be made to §3.375 of this title (relating to City Use Tax).

(h) Gas and electricity. City sales tax is due on the sale of natural gas or electricity and is allocated to the city into which delivery is made to the consumer.

(i) Telecommunications services. If a city imposes city tax on telecommunications services, city sales tax is due on the sale of intrastate telecommunications services and is allocated to the city in which the telephone or other telecommunications device from which the call or other transmission originates, unless the point of origin cannot be determined. If the point of origin cannot be determined, city sales tax is allocated to the city where the address to which the call is billed is located. No city tax is due on interstate telecommunications services.

(j) Amusement, garbage, and cable television services. City sales tax is due on the sale of amusement, garbage, and cable television service and is allocated to the city where the service is delivered to the consumer.


Source Note: The provisions of this §3.374 adopted to be effective January 1, 1976; amended to be effective October 19, 1979, 4 TexReg 3621; amended to be effective December 6, 1991, 16 TexReg 6763.

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