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TITLE 34PUBLIC FINANCE
PART 1COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 3TAX ADMINISTRATION
SUBCHAPTER NCOUNTY SALES AND USE TAX
RULE §3.253County Use 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) 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.


Source Note: The provisions of this §3.253 adopted to be effective September 10, 1991, 16 TexReg 4681; amended to be effective July 20, 2000, 25 TexReg 6775

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