| (a) Definitions. The following words and terms, when used in
this section, shall have the following meanings, unless the context clearly
indicates otherwise.
(1) Engaged in business--A retailer that has been engaged in
business in a county continues to be responsible for collecting county use
tax on sales made into the county for 12 months after the retailer ceases
to be engaged in business in the county. A retailer is engaged in business
in the county if the retailer:
(A) maintains, occupies, or uses, permanently or temporarily,
directly or indirectly, or through an agent, by whatever name called, an office,
place of distribution, sales or sample room, warehouse or storage place, or
other place of business;
(B) has any representative, agent, salesperson, canvasser,
or solicitor operating in the county under the authority of the seller for
the purpose of selling, delivering, or taking orders for any taxable items;
(C) promotes a flea market, trade day, or other event involving
the sale of taxable items;
(D) uses independent salespersons in direct sales of taxable
items;
(E) derives receipts from a lease of tangible personal property
located in the county;
(F) allows a franchisee or licensee to operate under its trade
name if the franchisee or licensee is required to collect county sales or
use tax; or
(G) conducts business in the county through employees, agents,
or independent contractors.
(2) Interstate or intrastate transit--Interstate
or intrastate transit has ceased when the journey is interrupted for reasons
of convenience or business needs of the owner but does not include a temporary
interruption necessary and incidental to the transit.
(3) Storage--Includes any retention of taxable items in
the county for any purpose other than sale, lease, or rental in the regular
course of business.
(4) Taxing county--Any county in Texas that has adopted
the county sales and use tax imposed by the Tax Code, Chapter 323.
(5) Use--The exercise of any right or power over taxable
items except sale, lease, or rental of the items in the regular course of
business. With respect to a taxable service, use means the derivation in the
county of a direct or indirect benefit from the service.
(6) Use tax--A tax that is imposed on the exercise or
enjoyment of any right or power over taxable items incident to the ownership,
possession, or custody of those items.
(b) Imposition of county use tax.
(1) If taxable items are purchased outside the state or within
Texas but not within a taxing county and those items are shipped or delivered
by the retailer directly into or brought by the purchaser or lessee directly
into a taxing county for storage, use, or other consumption, county use tax
is due.
(2) County use tax does not apply to taxable items in
interstate or intrastate transit.
(3) County use tax is due on the purchase or lease price
of taxable items and is reported in the period in which the taxable items
are first stored, used, or otherwise consumed in a taxing county.
(4) County use tax does not apply when the taxable items
are transferred from some other county in Texas or from a point outside a
county where they were first stored, used, or otherwise consumed.
(5) If, in a taxing county, storage facilities contain
taxable items purchased outside Texas and at the time of storage it is not
known whether the items will be used in or removed from Texas, a taxpayer
may elect to report county use tax when the items are first stored or when
the items are first removed from storage for use in Texas. Once an election
is made, the county use tax must be reported in a consistent manner. If county
use tax is paid on stored items that are subsequently removed from Texas before
use, the tax may be recovered in accordance with the refund and credit provisions
of §3.325 of this title (relating to Refunds, Interest, and Payments
under Protest) and §3.338 of this title (relating to Multistate Tax Credits
and Allowance of Credit for Tax Paid to Suppliers).
(c) Collection and allocation of county use tax by a retailer
located in Texas. A retailer located in Texas but outside a taxing county
is required to collect county use tax if the retailer:
(1) is engaged in business in the taxing county;
(2) sells, leases, or rents taxable items for storage,
use, or other consumption in that county; and
(3) ships or delivers those items into the county to the
purchaser.
(d) Collection and allocation of county use tax by a retailer
located outside Texas. A retailer located in another state is required to
collect county use tax if the provisions of subsection (c)(1)-(3) of this
section apply.
(e) Purchaser's liability for use tax. If a seller is not required
to collect county use tax, the purchaser is responsible for filing reports
and paying the tax.
(f) Exceptions.
(1) Both county sales tax and county use tax cannot apply to
the same transaction. County use tax is not applicable if the purchaser paid
county sales tax to a Texas retailer or owes county sales tax to a Texas retailer
who failed to collect it. The comptroller may proceed against the seller or
purchaser for the county tax owed by either.
(2) County use tax does not apply to the storage, use,
or other consumption of taxable items in this state if the sale or use of
the items would be exempt from the state sales and use tax were it purchased
within the state.
(3) Credit will be allowed against county use tax liability
to the extent sales or use tax is legally due and paid to another state.
(4) If taxable items are purchased outside Texas, temporarily
stored in Texas in a taxing county, and then removed and used solely outside
Texas, county use tax does not apply.
(5) The purchase of taxable items will not be presumed
to have been for use in a taxing county if the items were purchased and used
outside Texas for more than one year before the date of entry into a taxing
county. Transactions covered by the provisions of the Tax Code, §151.330(a),
are also subject to the one-year presumption if the items covered by the transactions
are returned to a taxing county. The use outside Texas must be substantial
and constitute a primary use for which the property was purchased. Either
the comptroller or the purchaser may introduce evidence to establish the intent
or absence of intent to use the taxable items in a taxing county at the time
of purchase.
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