Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 3 - TAX ADMINISTRATION › Subchapter O - STATE AND LOCAL SALES AND USE TAXES › Section 3.334 - Local Sales and Use Taxes

Current through Reg. 49, No. 28; July 12, 2024
(a) Definitions.
				  The following words and terms, when used in this section, shall have the
				  following meanings, unless the context clearly indicates otherwise.
(1) Cable system--The system through which a
				  cable service provider delivers cable television or bundled cable service, as
				  those terms are defined in §
											3.313 of this title (relating to
				  Cable Television Service and Bundled Cable Service).
(2) City--An incorporated city, municipality,
				  town, or village.
(3) City sales
				  and use tax--The tax authorized under Tax Code, §
											321.101(a),
				  including the additional municipal sales and use tax authorized under Tax Code,
				  §
											321.101(b),
				  the municipal sales and use tax for street maintenance authorized under Tax
				  Code, §
											327.003, the Type A
				  Development Corporation sales and use tax authorized under Local Government
				  Code, §
											504.251, the
				  Type B Development Corporation sales and use tax authorized under Local
				  Government Code, §
											505.251, a
				  sports and community venue project sales and use tax adopted by a city under
				  Local Government Code, §
											334.081, and a
				  municipal development corporation sales and use tax adopted by a city under
				  Local Government Code, §
											379A.081. The
				  term does not include the fire control, prevention, and emergency medical
				  services district sales and use tax authorized under Tax Code, §
											321.106, or the municipal
				  crime control and prevention district sales and use tax authorized under Tax
				  Code, §
											321.108.
(4) Comptroller's website--The comptroller's
				  website concerning local taxes located at:
https://comptroller.texas.gov/taxes/sales/
.
(5) County sales and use tax--The tax
				  authorized under Tax Code, §
											323.101, including a sports
				  and community venue project sales and use tax adopted by a county under Local
				  Government Code, §
											334.081. The
				  term does not include the county health services sales and use tax authorized
				  under Tax Code, §
											324.021, the county landfill
				  and criminal detention center sales and use tax authorized under Tax Code,
				  §
											325.021, or the crime
				  control and prevention district sales and use tax authorized under Tax Code,
				  §
											323.105.
(6) Drop shipment--A transaction in which an
				  order is received by a seller at one location, but the item purchased is
				  shipped by the seller from another location, or is shipped by the seller's
				  third-party supplier, directly to a location designated by the
				  purchaser.
(7) Engaged in
				  business--This term has the meaning given in §
											3.286 of this title (relating to
				  Seller's and Purchaser's Responsibilities).
(8) Extraterritorial jurisdiction--An
				  unincorporated area that is contiguous to the corporate boundaries of a city as
				  defined in Local Government Code, §
											42.021.
(9) Fulfill--To complete an order by
				  transferring possession of a taxable item to a purchaser, or to ship or deliver
				  a taxable item to a location designated by the purchaser. The term does not
				  include receiving or tracking an order, determining shipping costs, managing
				  inventory, or other activities that do not involve the transfer, shipment, or
				  delivery of a taxable item to the purchaser or a location designated by the
				  purchaser.
(10) Independently owned
				  and operated business--A self-controlling entity that is not a subsidiary of
				  another entity or otherwise subject to control by another entity, and that is
				  not publicly traded.
(11) Itinerant
				  vendor--A seller who travels to various locations for the purpose of receiving
				  orders and making sales of taxable items and who has no place of business in
				  this state. A person who sells items through vending machines is also an
				  itinerant vendor. A salesperson that operates out of a place of business in
				  this state is not an itinerant vendor.
(12) Kiosk--A small stand-alone area or
				  structure:
(A) that is used solely to display
				  merchandise or to submit orders for taxable items from a data entry device, or
				  both;
(B) that is located entirely
				  within a location that is a place of business of another seller, such as a
				  department store or shopping mall; and
(C) at which taxable items are not available
				  for immediate delivery to a purchaser.
(13) Local taxes--Sales and use taxes imposed
				  by any local taxing jurisdiction.
(14) Local taxing jurisdiction--Any of the
				  following:
(A) a city that imposes sales and
				  use tax as provided under paragraph (3) of this subsection;
(B) a county that imposes sales and use tax
				  as provided under paragraph (5) of this subsection;
(C) a special purpose district created under
				  the Special District Local Laws Code or other provisions of Texas law that is
				  authorized to impose sales and use tax by the Tax Code or other provisions of
				  Texas law and as governed by the provisions of Tax Code, Chapters 321 or 323
				  and other provisions of Texas law; or
(D) a transit authority that imposes sales
				  and use tax as authorized by Transportation Code, Chapters, 451, 452, 453, 457,
				  or 460 and governed by the provisions of Tax Code, Chapter, 322.
(15) Marketplace provider--This
				  term has the meaning given in §
											3.286 of this title.
(16) Micro-business--A legal entity,
				  including a corporation, partnership, or sole proprietorship, that:
(A) is formed for the purpose of making a
				  profit;
(B) is independently owned
				  and operated; and
(C) has not more
				  than 20 employees.
(17)
				  Order placed in person--An order placed by a purchaser with the seller while
				  physically present at the seller's place of business regardless of how the
				  seller subsequently enters the order.
(18) Place of business of the seller -
				  general definition--A place of business of the seller must be an established
				  outlet, office, or location operated by a seller for the purpose of receiving
				  orders for taxable items from persons other than employees, independent
				  contractors, and natural persons affiliated with the seller. An "established
				  outlet, office, or location" usually requires staffing by one or more sales
				  personnel. The term does not include a computer server, Internet protocol
				  address, domain name, website, or software application. The "purpose" element
				  of the definition may be established by proof that the sales personnel of the
				  seller receive three or more orders for taxable items at the facility during
				  the calendar year. Additional criteria for determining when a location is a
				  place of business of the seller are provided in subsection (b) of this section
				  for distribution centers, manufacturing plants, storage yards, warehouses and
				  similar facilities; kiosks; and purchasing offices. An outlet, office,
				  facility, or any location that contracts with a retail or commercial business
				  to process for that business invoices, purchase orders, bills of lading, or
				  other equivalent records onto which sales tax is added, including an office
				  operated for the purpose of buying and selling taxable goods to be used or
				  consumed by the retail or commercial business, is not a place of business of
				  the seller if the comptroller determines that the outlet, office, facility, or
				  location functions or exists to avoid the tax legally due under Tax Code,
				  Chapters 321, 322, and 323 or exists solely to rebate a portion of the tax
				  imposed by those chapters to the contracting business. An outlet, office,
				  facility, or location does not exist to avoid the tax legally due under Tax
				  Code, Chapters 321, 322, and 323 or solely to rebate a portion of the tax
				  imposed by those chapters if the outlet, office, facility, or location provides
				  significant business services, beyond processing invoices, to the contracting
				  business, including logistics management, purchasing, inventory control, or
				  other vital business services.
(19)
				  Purchasing office--An outlet, office, facility, or any location that contracts
				  with a retail or commercial business to process for that business invoices,
				  purchase orders, bills of lading, or other equivalent records onto which sales
				  tax is added, including an office operated for the purpose of buying and
				  selling taxable goods to be used or consumed by the retail or commercial
				  business.
(20) Remote Seller--As
				  defined in §
											3.286 of this title, a remote
				  seller is a seller engaged in business in this state whose only activity in the
				  state is:
(A) engaging in regular or
				  systematic solicitation of sales of taxable items in this state by the
				  distribution of catalogs, periodicals, advertising flyers, or other
				  advertising, by means of print, radio, or television media, or by mail,
				  telegraphy, telephone, computer data base, cable, optic, microwave, or other
				  communication system for the purpose of effecting sales of taxable items;
				  or
(B) soliciting orders for
				  taxable items by mail or through other media including the Internet or other
				  media that may be developed in the future.
(21) Seller--This term has the meaning given
				  in §
											3.286 of this title and also
				  refers to any agent or employee of the seller.
(22) Small business--A legal entity,
				  including a corporation, partnership, or sole proprietorship, that:
(A) is formed for the purpose of making a
				  profit;
(B) is independently owned
				  and operated; and
(C) has fewer
				  than 100 employees or less than $6 million in annual gross receipts.
(23) Special purpose district--A
				  local governmental entity authorized by the Texas legislature for a specific
				  purpose, such as crime control, a local library, emergency services, county
				  health services, or a county landfill and criminal detention center.
(24) Storage--This term has the meaning given
				  in §
											3.346 of this title (relating to
				  Use Tax).
(25) Temporary place of
				  business of the seller--A location operated by a seller for a limited period of
				  time for the purpose of selling and receiving orders for taxable items and
				  where the seller has inventory available for immediate delivery to a purchaser.
				  For example, a person who rents a booth at a weekend craft fair or art show to
				  sell and take orders for jewelry, or a person who maintains a facility at a job
				  site to rent tools and equipment to a contractor during the construction of
				  real property, has established a temporary place of business. A temporary place
				  of business of the seller includes a sale outside of a distribution center,
				  manufacturing plant, storage yard, warehouse, or similar facility of the seller
				  in a parking lot or similar space sharing the same physical address as the
				  facility but not within the walls of the facility.
(26) Transit authority--A metropolitan rapid
				  transit authority (MTA), advanced transportation district (ATD), regional or
				  subregional transportation authority (RTA), city transit department (CTD),
				  county transit authority (CTA), regional mobility authority (RMA) or
				  coordinated county transportation authority created under Transportation Code,
				  Chapters 370, 451, 452, 453, 457, or 460.
(27) Two percent cap--A reference to the
				  general rule that, except as otherwise provided by Texas law and as explained
				  in this section, a seller cannot collect, and a purchaser is not obligated to
				  pay, more than 2.0% of the sales price of a taxable item in total local sales
				  and use taxes for all local taxing jurisdictions.
(28) Use--This term has the meaning given in
				  §
											3.346 of this title.
(29) Use tax--A tax imposed on the storage,
				  use or other consumption of a taxable item in this state.