TAX CODETITLE 2. STATE TAXATIONSUBTITLE E. SALES, EXCISE, AND USE TAXESCHAPTER 151. LIMITED SALES, EXCISE, AND USE TAXSUBCHAPTER A. GENERAL PROVISIONSSec. 151.001. SHORT TITLE. This chapter may be cited as the Limited Sales, Excise, and Use Tax Act.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.002. APPLICABILITY OF DEFINITIONS, ETC. The definitions and other provisions of this chapter relating to the collection, administration, and enforcement of the taxes imposed by this chapter, including the requirements for sales tax permits, apply to the parties to a sale of a taxable item that is exempted from the taxes imposed by this chapter but that is subject to the taxes imposed by a city under Chapter 321 of this code.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.27(b)(1), eff. Aug. 28, 1989.
Sec. 151.0028. "AMUSEMENT SERVICES". (a) "Amusement services" means the provision of amusement, entertainment, or recreation, but does not include the provision of educational or health services if prescribed by a licensed practitioner of the healing arts for the primary purpose of education or health maintenance or improvement.(b) "Amusement services" includes membership in a private club or organization that provides entertainment, recreational, sports, dining, or social facilities to its members.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 3, eff. Oct. 2, 1984. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 1.
Sec. 151.003. "BUSINESS". "Business" means an activity of or caused by a person for the purpose of a direct or indirect gain, benefit, or advantage.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.0031. "COMPUTER PROGRAM". "Computer program" means a series of instructions that are coded for acceptance or use by a computer system and that are designed to permit the computer system to process data and provide results and information. The series of instructions may be contained in or on magnetic tapes, punched cards, printed instructions, or other tangible or electronic media.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, Sec. 1, eff. Oct. 2, 1984.
Sec. 151.0033. "CABLE TELEVISION SERVICE". "Cable television service" means the distribution of video programming with or without use of wires to subscribing or paying customers.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 4, eff. Oct. 2, 1984.
Sec. 151.0034. "CREDIT REPORTING SERVICE". "Credit reporting service" means assembling or furnishing credit history or credit information relating to any person.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 2.
Sec. 151.0035. "DATA PROCESSING SERVICE". "Data processing service" includes word processing, data entry, data retrieval, data search, information compilation, payroll and business accounting data production, the performance of a totalisator service with the use of computational equipment required by the Texas Racing Act (Article 179e, Vernon's Texas Civil Statutes), and other computerized data and information storage or manipulation. "Data processing service" also includes the use of a computer or computer time for data processing whether the processing is performed by the provider of the computer or computer time or by the purchaser or other beneficiary of the service. "Data processing service" does not include the transcription of medical dictation by a medical transcriptionist. "Data storage," as used in this section, does not include a classified advertisement, banner advertisement, vertical advertisement, or link when the item is displayed on an Internet website owned by another person.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 3. Amended by Acts 1997, 75th Leg., ch. 1275, Sec. 53, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1040, Sec. 11, eff. Sept. 1, 1997; Acts 2003, 78th Leg., ch. 209, Sec. 16, eff. Oct. 1, 2003.
Sec. 151.0036. "DEBT COLLECTION SERVICE". (a) "Debt collection service" means activity to collect or adjust a delinquent debt, to collect or adjust a claim, or to repossess property subject to a claim.(b) "Debt collection service" does not include:(1) the collection of:(A) a judgment by an attorney or by a partnership or professional corporation of attorneys if the attorney, partnership, or corporation represented the person in the suit from which the judgment arose; or(B) court-ordered child support or medical child support; or(2) a service provided by a person acting as a trustee in connection with the foreclosure sale of real property under a lien created by a mortgage, deed of trust, or security instrument.(c) "Debt collection service" includes the service performed for which a fee is collected under Section 3.506, Business & Commerce Code. The person collecting the check shall add the amount of the tax to the fee in accordance with Section 151.052 and shall collect the fee from the drawer or endorser of the check.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 4. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 9, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 341, Sec. 3.06, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1000, Sec. 5, eff. Oct. 1, 1995; Acts 2001, 77th Leg., ch. 1151, Sec. 1, 2(b), eff. July 1, 2001; Acts 2001, 77th Leg., ch. 1420, Sec. 2.001(d), eff. Sept. 1, 2001.
Sec. 151.0038. "INFORMATION SERVICE". (a) "Information service" means:(1) furnishing general or specialized news or other current information, including financial information, unless furnished to:(A) a newspaper or to a radio or television station licensed by the Federal Communications Commission; or(B) a member of a homeowners association of a residential subdivision or condominium development, and is furnished by the association or on behalf of the association; or(2) electronic data retrieval or research.(b) In this section, "newspaper" has the meaning assigned by Section 151.319(f).
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 5. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 10, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 6, eff. Oct. 1, 1995.
Sec. 151.0039. "INSURANCE SERVICE". (a) "Insurance service" means insurance loss or damage appraisal, insurance inspection, insurance investigation, insurance actuarial analysis or research, insurance claims adjustment or claims processing, or insurance loss prevention service.(b) "Insurance service" does not include insurance coverage for which a premium is paid or commissions paid to insurance agents for the sale of insurance or annuities.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 6.
Sec. 151.00393. INTERNET. "Internet" means collectively the myriad of computer and telecommunications facilities, including equipment and operating software, that comprise the interconnected worldwide network of networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor or successor protocols to the protocol, to communicate information of all kinds by wire or radio.
Added by Acts 1999, 76th Leg., ch. 394, Sec. 1, eff. Oct. 1, 1999.
Sec. 151.00394. INTERNET ACCESS SERVICE. (a) "Internet access service" means a service that enables users to access content, information, electronic mail, or other services offered over the Internet and may also include access to proprietary content, information, and other services as part of a package of services offered to consumers. The term does not include telecommunications services.(b) "Internet access service" does not include and the exemption under Section 151.325 does not apply to any other taxable service listed in Section 151.0101(a), unless the taxable service is provided in conjunction with and is merely incidental to the provision of Internet access service.(c) On and after October 1, 1999, "Internet access service" is not included in the definitions of "data processing service" and "information service."
Added by Acts 1999, 76th Leg., ch. 394, Sec. 1, eff. Oct. 1, 1999.
Sec. 151.004. "IN THIS STATE". "In this state" means within the exterior limits of Texas and includes all territory within these limits ceded to or owned by the United States.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.0045. "PERSONAL SERVICES". "Personal services" means those personal services listed as personal services under Group 721, Major Group 72 of the Standard Industrial Classification Manual, 1972, and includes massage parlors, escort services, and Turkish baths under Group 729 of said manual but does not include any other services listed under Group 729 unless otherwise covered under this Act, prepared by the statistical policy division of the office on management and budget, office of the president of the United States.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 5, eff. Oct. 2, 1984.
Sec. 151.0047. "REAL PROPERTY REPAIR AND REMODELING". (a) "Real property repair and remodeling" means the repair, restoration, remodeling, or modification of an improvement to real property other than:(1) a structure or separate part of a structure used as a residence;(2) an improvement immediately adjacent to a structure described by Subdivision (1) of this section and used in the residential occupancy of the structure or separate part of the structure by the person using the structure or part as a residence; or(3) an improvement to a manufacturing or processing production unit in a petrochemical refinery or chemical plant that provides increased capacity in the production unit.(b) In this section:(1) "Increased capacity" means the capability to produce:(A) additional products or services as measured by units per hour or units per year; or(B) a new product or service.(2) "Production unit" means a group of manufacturing and processing machines and ancillary equipment that together are necessary to create or produce a physical or chemical change beginning with the first processing of the raw material and ending with the finished product.(3) "New product" means a product that:(A) has different product properties and a different commercial application than the product previously manufactured or processed by the production unit that produced the previous product; and(B) is not created by straining or purifying an existing product or by making cosmetic changes, such as adding or removing color or odor, to or from an existing product.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 7. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 11, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 7, eff. Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1040, Sec. 12, eff. Sept. 1, 1997.
Sec. 151.0048. REAL PROPERTY SERVICE. (a) Except as provided by Subsection (b), "real property service" means:(1) landscaping;(2) the care and maintenance of lawns, yards, or ornamental trees or other plants;(3) the removal or collection of garbage, rubbish, or other solid waste other than:(A) hazardous waste;(B) industrial solid waste;(C) waste material that results from an activity associated with the exploration, development, or production of oil, gas, geothermal resources, or any other substance or material regulated by the Railroad Commission of Texas under Section 91.101, Natural Resources Code;(D) domestic sewage or an irrigation return flow, to the extent the sewage or return flow does not constitute garbage or rubbish; and(E) industrial discharges subject to regulation by permit issued pursuant to Chapter 26, Water Code;(4) building or grounds cleaning, janitorial, or custodial services;(5) a structural pest control service covered by Section 1951.003, Occupations Code; or(6) the surveying of real property.(b) "Real property service" does not include a service listed under Subsection (a) if the service is purchased by a contractor as part of the improvement of real property with a new structure to be used as a residence or other improvement immediately adjacent to the new structure and used in the residential occupancy of the structure.(b-1) "Real property service" does not include a service listed under Subsection (a) if the service is performed by a landman and is necessary to negotiate or secure land or mineral rights for acquisition or trade, including:(1) determining ownership;(2) negotiating a trade or agreement regarding land or mineral rights;(3) drafting and administering contractual agreements;(4) ensuring that all governmental regulations are complied with; and(5) any other action necessary to complete the transaction related to a service described by this subsection, other than an information service described by Section 151.0038.(c) In this section, "contractor" means a person who makes an improvement on real estate and who, as a necessary or incidental part of the service, incorporates tangible personal property into the property improved. The term includes a builder, developer, speculative builder, or other person acting as a builder to improve residential real property.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 8. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 12, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 1031, Sec. 19, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 1000, Sec. 7, eff. Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1040, Sec. 13, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1114, Sec. 1.01, eff. Oct. 1, 1999; Acts 1999, 76th Leg., ch. 1114, Sec. 2.01, eff. Oct. 1, 2001; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.815, eff. Sept. 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1266, Sec. 1, eff. September 1, 2007.
Sec. 151.005. "SALE" OR "PURCHASE". "Sale" or "purchase" means any of the following when done or performed for consideration:(1) a transfer of title or possession of tangible personal property;(2) the exchange, barter, lease, or rental of tangible personal property;(3) the performance of a taxable service, the charge for an extended warranty or service contract for the performance of a taxable service, or, in the case of an amusement service, a transfer of title to or possession of a ticket or other admission document, the collection of an admission fee, whether by individual performance, subscription series, or membership privilege, the collection of dues or a fee, charge, or assessment, including an initiation fee, by a club or organization for membership or a special privilege, status, or membership classification in the club or organization, or the use of a coin-operated machine;(4) the production, fabrication, processing, printing, or imprinting of tangible personal property for consumers who directly or indirectly furnish the materials used in the production, fabrication, processing, printing, or imprinting;(5) the furnishing and distribution of tangible personal property by a social club or fraternal organization to anyone;(6) the furnishing, preparation, or service of food, meals, or drinks;(7) a transfer of the possession of tangible personal property if the title to the property is retained by the seller as security for the payment of the price; or(8) a transfer of the title or possession of tangible personal property that has been produced, fabricated, or printed to the special order of the customer.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 6, eff. Oct. 2, 1984; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 15; Acts 2003, 78th Leg., ch. 209, Sec. 17, eff. Oct. 1, 2003.
Sec. 151.006. "SALE FOR RESALE." (a) "Sale for resale" means a sale of:(1) tangible personal property or a taxable service to a purchaser who acquires the property or service for the purpose of reselling it in the United States of America or a possession or territory of the United States of America or in the United Mexican States in the normal course of business in the form or condition in which it is acquired or as an attachment to or integral part of other tangible personal property or taxable service;(2) tangible personal property to a purchaser for the sole purpose of the purchaser's leasing or renting it in the United States of America or a possession or territory of the United States of America or in the United Mexican States in the normal course of business to another person, but not if incidental to the leasing or renting of real estate;(3) tangible personal property to a purchaser who acquires the property for the purpose of transferring it in the United States of America or a possession or territory of the United States of America or in the United Mexican States as an integral part of a taxable service; or(4) a taxable service performed on tangible personal property that is held for sale by the purchaser of the taxable service.(b) Subsection (a)(3) applies to a transfer of a wireless voice communication device as an integral part of a taxable service, regardless of whether there is a separate charge for the wireless voice communication device or whether the purchaser is the provider of the taxable service, if payment for the service is a condition for receiving the wireless voice communication device.
Acts 1981, 67th Leg., p. 1546, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 7, eff. Oct. 2, 1984; Acts 1995, 74th Leg., ch. 351, Sec. 1, eff. Sept. 1, 1995.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1266, Sec. 2, eff. September 1, 2007.
Sec. 151.007. "SALES PRICE" OR "RECEIPTS". (a) Except as provided by Subsections (c) and (d), "sales price" or "receipts" means the total amount for which a taxable item is sold, leased, or rented, valued in money, without a deduction for the cost of:(1) the taxable item sold, leased, or rented;(2) the materials used, labor or service employed, interest, losses, or other expenses;(3) the transportation or installation of tangible personal property; or(4) transportation incident to the performance of a taxable service.(b) The total amount for which a taxable item is sold, leased, or rented includes a service that is a part of the sale and the amount of credit given to the purchaser by the seller.(c) "Sales price" or "receipts" does not include any of the following if separately identified to the customer by such means as an invoice, billing, sales slip or ticket, or contract:(1) a cash discount allowed on the sale;(2) the amount charged for tangible personal property returned by a customer if the total amount charged is refunded by cash or credit;(3) a refund of the charges for the performance of a taxable service;(4) finance, carrying and service charges, or interest from credit extended on sales of taxable items under a conditional sales contract or other contract providing for the deferred payment of the purchase price;(5) the value of tangible personal property that:(A) is taken by a seller in trade as all or part of the consideration for a sale of a taxable item; and(B) is of a type of property sold by the seller in the regular course of business;(6) the face value of United States coin or currency in a sale of that coin or currency in which the total consideration given by the purchaser exceeds the face value of the coin or currency; or(7) a voluntary gratuity or a reasonable mandatory charge for the service of a meal or food products, including soft drinks and candy, for immediate human consumption when the service charge is separated from the sales price of the meal or food product and identified as a gratuity or tip and when the total amount of the service charge is disbursed by the employer to employees who customarily and regularly provide the service.(d) "Sales price" or "receipts" of items sold as edible products for human consumption through the use or operation of a money-operated vending machine is 50 percent of the total gross receipts of the vendor from sales of those items, except for sales of soft drinks and candy, for which the "sales price" or "receipts" are the total gross receipts from those sales.(e) The sales price of membership in a private club or organization consists of the dues, fees, and other charges and assessments, including initiation fees, required for membership or a special privilege, status, or membership classification in the club or organization.
Acts 1981, 67th Leg., p. 1546, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 8, eff. Oct. 2, 1984; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 9; Acts 1997, 75th Leg., ch. 1040, Sec. 14, eff. Oct. 1, 1997; Acts 2001, 77th Leg., ch. 1263, Sec. 12, eff. Oct. 1, 2001.
Sec. 151.0075. "SECURITY SERVICE". "Security service" means service for which a license is required under Section 1702.101 or 1702.102, Occupations Code.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 10. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 14.837, eff. Sept. 1, 2001.
Sec. 151.008. "SELLER" OR "RETAILER". (a) "Seller" or "retailer" means a person engaged in the business of making sales of taxable items of a kind the receipts from the sale of which are included in the measure of the sales or use tax imposed by this chapter.(b) "Seller" and "retailer" include:(1) a person in the business of making sales at auction of tangible personal property owned by the person or by another;(2) a person who makes more than two sales of taxable items during a 12-month period, including sales made in the capacity of an assignee for the benefit of creditors or receiver or trustee in bankruptcy;(3) a person regarded by the comptroller as a seller or retailer under Section 151.024 of this code;(4) a hotel, motel, or owner or lessor of an office or residential building or development that contracts and pays for telecommunications services for resale to guests or tenants; and(5) a person who engages 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.
Acts 1981, 67th Leg., p. 1547, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1985, 69th Leg., ch. 206, Sec. 2, eff. Oct. 1, 1985; Acts 1991, 72nd Leg., 1st C.S., ch. 5, Sec. 14.13.
Sec. 151.009. "TANGIBLE PERSONAL PROPERTY". "Tangible personal property" means personal property that can be seen, weighed, measured, felt, or touched or that is perceptible to the senses in any other manner, and, for the purposes of this chapter, the term includes a computer program and a telephone prepaid calling card.
Acts 1981, 67th Leg., p. 1547, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, Sec. 2, eff. Oct. 2, 1984; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 11; Acts 1997, 75th Leg., ch. 1040, Sec. 16, eff. Sept. 1, 1997.
Sec. 151.010. TAXABLE ITEM. "Taxable item" means tangible personal property and taxable services. Except as otherwise provided by this chapter, the sale or use of a taxable item in electronic form instead of on physical media does not alter the item's tax status.
Acts 1981, 67th Leg., p. 1547, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 1, eff. Oct. 2, 1984; Acts 2001, 77th Leg., ch. 1263, Sec. 13, eff. Oct. 1, 2001.
Sec. 151.0101. "TAXABLE SERVICES". (a) "Taxable services" means:(1) amusement services;(2) cable television services;(3) personal services;(4) motor vehicle parking and storage services;(5) the repair, remodeling, maintenance, and restoration of tangible personal property, except:(A) aircraft;(B) a ship, boat, or other vessel, other than:(i) a taxable boat or motor as defined by Section 160.001;(ii) a sports fishing boat; or(iii) any other vessel used for pleasure;(C) the repair, maintenance, and restoration of a motor vehicle; and(D) the repair, maintenance, creation, and restoration of a computer program, including its development and modification, not sold by the person performing the repair, maintenance, creation, or restoration service;(6) telecommunications services;(7) credit reporting services;(8) debt collection services;(9) insurance services;(10) information services;(11) real property services;(12) data processing services;(13) real property repair and remodeling;(14) security services;(15) telephone answering services;(16) Internet access service; and(17) a sale by a transmission and distribution utility, as defined in Section 31.002, Utilities Code, of transmission or delivery of service directly to an electricity end-use customer whose consumption of electricity is subject to taxation under this chapter.(b) The comptroller shall have exclusive jurisdiction to interpret Subsection (a) of this section.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 2, eff. Oct. 2, 1984. Amended by Acts 1985, 69th Leg., ch. 206, Sec. 3, eff. Oct. 1, 1985; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 12; Acts 1989, 71st Leg., ch. 1249, Sec. 1, eff. Oct. 1, 1989; Acts 1991, 72nd Leg., 1st C.S., ch. 5, Sec. 14.021(a); Acts 1999, 76th Leg., ch. 394, Sec. 2, eff. Oct. 1, 1999; Acts 1999, 76th Leg., ch. 405, Sec. 54, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1420, Sec. 18.008, eff. Sept. 1, 2001.
Sec. 151.0102. "TELEPHONE ANSWERING SERVICES". "Telephone answering services" means the receiving and relaying of telephone messages by a human operator. The term does not include the automated receiving and relaying of telephone messages included within the definition of "telecommunications services" under Section 151.0103.
Added by Acts 1991, 72nd Leg., 1st C.S., ch. 5, Sec. 14.031.
Sec. 151.0103. TELECOMMUNICATIONS SERVICES. (a) For the purposes of this title only, "telecommunications services" means the electronic or electrical transmission, conveyance, routing, or reception of sounds, signals, data, or information utilizing wires, cable, radio waves, microwaves, satellites, fiber optics, or any other method now in existence or that may be devised, including but not limited to long-distance telephone service. The term does not include:(1) the storage of data or information for subsequent retrieval or the processing, or reception and processing, of data or information intended to change its form or content;(2) the sale or use of a telephone prepaid calling card;(3) Internet access service; or(4) a pay telephone coin sent-paid telephone call.(b) The exemption provided by Subsection (a)(4) applies only to the portion of the sales price of the telecommunications service that is paid by coin.
Added by Acts 1985, 69th Leg., ch. 206, Sec. 4, eff. Oct. 1, 1985. Amended by Acts 1997, 75th Leg., ch. 1040, Sec. 17, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 394, Sec. 3, eff. Oct. 1, 1999.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1199, Sec. 1, eff. September 1, 2007.
Sec. 151.01032. "TELEPHONE PREPAID CALLING CARD". "Telephone prepaid calling card" means a card or other item, including an access code, that represents the right to make one or more telephone calls for which payment is made in incremental amounts and before the call is initiated. The term "telephone prepaid calling card" does not include a card sold by mechanical means for consideration of one dollar or less.
Added by Acts 1997, 75th Leg., ch. 1040, Sec. 15, eff. Sept. 1, 1997.
Sec. 151.0104. TELEPHONE COMPANY. For the purposes of this chapter, "telephone company" means a person that owns or operates a telephone line or telephone in this state and charges for its use.
Added by Acts 1985, 69th Leg., ch. 206, Sec. 4, eff. Oct. 1, 1985. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 13.
Sec. 151.011. "USE" AND "STORAGE". (a) Except as provided by Subsection (c) of this section, "use" means the exercise of a right or power incidental to the ownership of tangible personal property over tangible personal property, including tangible personal property other than printed material that has been processed, fabricated, or manufactured into other property or attached to or incorporated into other property transported into this state, and, except as provided by Section 151.056(b) of this code, includes the incorporation of tangible personal property into real estate or into improvements of real estate whether or not the real estate is subsequently sold.(b) With respect to a taxable service, "use" means the derivation in this state of direct or indirect benefit from the service.(c) "Use" does not include the sale of tangible personal property or a taxable service in the regular course of business, the transfer of a taxable service as an integral part of the transfer of tangible personal property in the regular course of business, or the transfer of tangible personal property as an integral part of the transfer of a taxable service in the regular course of business.(d) Except as provided by Subsection (e) of this section, "storage" means the keeping or retaining for any purpose in this state of tangible personal property sold by a retailer.(e) "Storage" does not include the keeping or retaining of tangible personal property for sale in the regular course of business.(f) Neither "use" nor "storage" includes the exercise of a right or power over or the keeping or retaining of tangible personal property for the purpose of:(1) transporting the property outside the state for use solely outside the state; or(2) processing, fabricating, or manufacturing the property into other property or attaching the property to or incorporating the property into other property to be transported outside the state for use solely outside the state.
Acts 1981, 67th Leg., p. 1547, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 14; Acts 1989, 71st Leg., ch. 323, Sec. 1, eff. Oct. 1, 1989; Acts 2003, 78th Leg., ch. 1310, Sec. 97, eff. Oct. 1, 2003.
Sec. 151.012. EFFECTIVE DATE OF TAX RATE CHANGES. (a) A change in the rate of the tax imposed under Sections 151.051 and 151.101 must take effect on the first day of a calendar quarter.(b) If the performance of a taxable service begins before the effective date of a change in the tax rate and the performance will not be completed until after that effective date, the change in the tax rate applies to the first billing period for the service performed on or after that effective date.
Added by Acts 2003, 78th Leg., ch. 1310, Sec. 98, eff. Oct. 1, 2003.
SUBCHAPTER B. ADMINISTRATION AND RECORDSSec. 151.021. EMPLOYEES. The comptroller may employ accountants, auditors, investigators, assistants, and clerks for the administration of this chapter and may delegate to employees the authority to conduct hearings, prescribe rules, and perform other duties required by this chapter.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.022. RETROACTIVE EFFECT OF RULES. The comptroller may prescribe the extent to which a rule or ruling shall be applied without retroactive effect.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.023. INVESTIGATIONS AND AUDITS. (a) The comptroller, or another person authorized by the comptroller in writing, may examine, copy, and photograph the books, records, papers, and equipment of a person who sells taxable items or of a person liable for the use tax and may investigate the character of the business of the person to verify the accuracy of the person's report or to determine the amount of tax that may be required to be paid if no report has been filed.(b) For the purpose of determining the amount of tax collected and payable to the state, the amount of tax accruing and due, and whether a tax liability has been incurred under this chapter, the comptroller or a person authorized by the comptroller may:(1) inspect at any time during business hours any business premises where a taxable event has occurred and examine, copy, and photograph the books, returns, records, papers, and equipment relating to the conduct in question; and(2) require by delivery of written notice to the taxpayer or to an employee, representative, or agent of the taxpayer that, not later than the 10th working day after the date the notice is delivered, the taxpayer produce to an agent or designated representative of the comptroller for inspection the books, records, papers, and returns relating to the taxable activity stated in the notice.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 2001, 77th Leg., ch. 442, Sec. 9, eff. Sept. 1, 2001.
Sec. 151.0231. MANAGED AUDITS. (a) In this section, "managed audit" means a review and analysis of invoices, checks, accounting records, or other documents or information to determine a taxpayer's liability for tax under this chapter.(b) A managed audit may be limited to certain categories of liability under this chapter, including tax on:(1) sales of one or more types of taxable items;(2) purchases of assets;(3) purchases of expense items;(4) purchases under a direct payment permit; or(5) any other category specified in an agreement authorized by this section.(c) The comptroller may, in a written agreement, authorize a taxpayer to conduct a managed audit under this section. The agreement must:(1) be signed by an authorized representative of the comptroller and the taxpayer; and(2) specify the period to be audited and the procedure to be followed.(d) In determining whether to authorize a managed audit, the comptroller may consider, in addition to other factors the comptroller considers relevant:(1) the taxpayer's history of tax compliance;(2) the amount of time and resources the taxpayer has available to dedicate to the audit;(3) the extent and availability of the taxpayer's records; and(4) the taxpayer's ability to pay any expected liability.(e) The decision to authorize or not authorize a managed audit rests solely with the comptroller.(f) The comptroller may examine records and perform reviews that the comptroller determines are necessary before the audit is finalized to verify the results of the audit.(g) Unless the audit or information reviewed by the comptroller under Subsection (f) discloses fraud or wilful evasion of the tax, the comptroller may not assess a penalty and may waive all or part of the interest that would otherwise accrue on any amount identified to be due in a managed audit. This subsection does not apply to any amount collected by the taxpayer that was a tax or represented to be a tax but that was not remitted to this state.(h) Except as provided by Section 111.104(f), the taxpayer is entitled to a refund of any tax overpayment disclosed by a managed audit under this section.
Added by Acts 1999, 76th Leg., ch. 457, Sec. 1, eff. Oct. 1, 1999.
Sec. 151.024. PERSONS WHO MAY BE REGARDED AS RETAILERS. If the comptroller determines that it is necessary for the efficient administration of this chapter to regard a salesman, representative, peddler, or canvasser as the agent of a dealer, distributor, supervisor, or employer under whom he operates or from whom he obtains the tangible personal property that he sells, whether or not the sale is made in his own behalf or for the dealer, distributor, supervisor, or employer, the comptroller may so regard the salesman, representative, peddler, or canvasser, and may regard the dealer, distributor, supervisor, or employer as a retailer or seller for the purpose of this chapter.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.025. RECORDS REQUIRED TO BE KEPT. (a) All sellers and all other persons storing, using, or consuming in this state a taxable item purchased from a retailer shall keep the following records in the form the comptroller requires:(1) records of gross receipts, including documentation in the form of receipts, shipping manifests, invoices, and other pertinent papers, from each rental, lease, taxable service, and taxable labor transaction occurring during each reporting period;(2) records in the form of receipts, shipping manifests, invoices, and other pertinent papers of all purchases of taxable items from every source made during each reporting period; and(3) records in the form of receipts, shipping manifests, invoices, and other pertinent papers that substantiate each claimed deduction or exclusion authorized by law.(b) A record required by Subsection (a) of this section shall be kept for not less than four years from the day that it is made unless the comptroller authorizes its destruction at an earlier date.(c) Repealed by Acts 2003, 78th Leg., ch. 1310, Sec. 121(26) and Acts 2003, 78th Leg., ch. 209, Sec. 86(b).(d) If any nontaxable charges are combined with and not separately stated from taxable telecommunications service charges on the customer bill or invoice of a provider of telecommunications services, the combined charge is subject to tax unless the provider can identify the portion of the charges that are nontaxable through the provider's books and records kept in the regular course of business. If the nontaxable charges cannot reasonably be identified, the charges from the sale of both nontaxable services and taxable telecommunications services are attributable to taxable telecommunications services. The provider of telecommunications services has the burden of proving nontaxable charges.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1985, 69th Leg., ch. 206, Sec. 5, eff. Oct. 1, 1985; Acts 2001, 77th Leg., ch. 442, Sec. 10, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1310, Sec. 99, 121(26), eff. July 1, 2003; Acts 2003, 78th Leg., ch. 209, Sec. 86(a), (b), eff. Oct. 1, 2003.
Sec. 151.026. OUT-OF-STATE RECORDS. A taxpayer is entitled to keep or store the taxpayer's records outside this state. If the comptroller requests to examine a record kept or stored outside this state, the taxpayer shall bring the record into this state for the examination or permit the comptroller to examine the record at the out-of-state location.
Acts 1981, 67th Leg., p. 1549, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.027. CONFIDENTIALITY OF TAX INFORMATION. (a) Information in or derived from a record, report, or other instrument required to be furnished under this chapter is confidential and not open to public inspection, except for information set forth in a lien filed under this title or a permit issued under this chapter to a seller and except as provided by Subsection (c) of this section.(b) Information secured, derived, or obtained during the course of an examination of a taxpayer's books, records, papers, officers, or employees, including the business affairs, operations, profits, losses, and expenditures of the taxpayer, is confidential and not open to public inspection except as provided by Subsection (c) of this section.(c) This section does not prohibit:(1) the examination of information, if authorized by the comptroller, by another state officer or law enforcement officer, by a tax official of another state, by a tax official of the United Mexican States, or by an official of the United States if a reciprocal agreement exists;(2) the delivery to a taxpayer, or a taxpayer's authorized representative, of a copy of a report or other paper filed by the taxpayer under this chapter;(3) the publication of statistics classified to prevent the identification of a particular report or items in a particular report;(4) the use of records, reports, or information secured, derived, or obtained by the attorney general or the comptroller in an action under this chapter against the same taxpayer who furnished the information;(5) the delivery to a successor, receiver, executor, administrator, assignee, or guarantor of a taxpayer of information about items included in the measure and amounts of any unpaid tax or amounts of tax, penalties, and interest required to be collected;(6) the delivery of information to a municipality, county, or other local governmental entity in accordance with Section 321.3022, 322.2022, or 323.3022; or(7) the release of information in or derived from a record, report, or other instrument required to be furnished under this chapter by a governmental body, as that term is defined in Section 552.003, Government Code.
Acts 1981, 67th Leg., p. 1549, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1995, 74th Leg., ch. 351, Sec. 3, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1000, Sec. 69, eff. Oct. 1, 1995; Acts 1999, 76th Leg., ch. 1218, Sec. 3, eff. Sept. 1, 1999.Amended by: Acts 2009, 81st Leg., R.S., Ch. 1360, Sec. 1, eff. September 1, 2009.
Sec. 151.029. REMEDIES NOT EXCLUSIVE. An action taken by the comptroller or the attorney general under this chapter is not an election to pursue one remedy to the exclusion of any other remedy authorized by this chapter.
Acts 1981, 67th Leg., p. 1549, ch. 389, Sec. 1, eff. Jan. 1, 1982.
SUBCHAPTER C. IMPOSITION AND COLLECTION OF SALES TAXSec. 151.051. SALES TAX IMPOSED. (a) A tax is imposed on each sale of a taxable item in this state.(b) The sales tax rate is 6-1/4 percent of the sales price of the taxable item sold.
Added by Acts 1981, 67th Leg., p. 1550, ch. 389, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 13, Sec. 1, eff. Oct. 2, 1984; Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1, Sec. 1, eff. Jan. 1, 1987; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 1, Sec. 1; Acts 1990, 71st Leg., 6th C.S., ch. 5, Sec. 1.01, eff. July 1, 1990.
For expiration of this section, see Subsection (d).Sec. 151.0515. TEXAS EMISSIONS REDUCTION PLAN SURCHARGE. (a) In this section, "equipment" includes all off-road, heavy-duty diesel equipment, other than implements of husbandry used solely for agricultural purposes, including:(1) pavers;(2) tampers/rammers;(3) plate compactors;(4) concrete pavers;(5) rollers;(6) scrapers;(7) paving equipment;(8) surface equipment;(9) signal boards/light plants;(10) trenchers;(11) bore/drill rigs;(12) excavators;(13) concrete/industrial saws;(14) cement and mortar mixers;(15) cranes;(16) graders;(17) off-highway trucks;(18) crushing/processing equipment;(19) rough terrain forklifts;(20) rubber tire loaders;(21) rubber tire tractors/dozers;(22) tractors/loaders/backhoes;(23) crawler tractors/dozers;(24) skid steer loaders;(25) off-highway tractors;(26) Dumpsters/tenders; and(27) mining equipment.(b) In each county in this state, a surcharge is imposed on the retail sale, lease, or rental of new or used equipment in an amount equal to two percent of the sale price or the lease or rental amount.(b-1) In each county in this state, a surcharge is imposed on the storage, use, or other consumption in this state of new or used equipment. The surcharge is at the same percentage rate as is provided by Subsection (b) on the sales price or the lease or rental amount of the equipment.(c) The surcharge shall be collected at the same time and in the same manner and shall be administered and enforced in the same manner as the tax imposed under this chapter. The comptroller shall adopt any additional procedures needed for the collection, administration, and enforcement of the surcharge authorized by this section and shall deposit all remitted surcharges to the credit of the Texas emissions reduction plan fund.(d) This section expires August 31, 2019.
Added by Acts 2001, 77th Leg., ch. 967, Sec. 2, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 1331, Sec. 21, eff. July 1, 2003.Amended by: Acts 2005, 79th Leg., Ch. 1125, Sec. 17, eff. September 1, 2005.Acts 2007, 80th Leg., R.S., Ch. 262, Sec. 2.13, eff. June 8, 2007.Acts 2009, 81st Leg., R.S., Ch. 1125, Sec. 18, eff. September 1, 2009.
Sec. 151.052. COLLECTION BY RETAILER. (a) Except as provided by Subsection (d), a seller who makes a sale subject to the sales tax imposed by this chapter shall add the amount of the tax to the sales price, and when the amount of the tax is added:(1) it becomes a part of the sales price;(2) it is a debt of the purchaser to the seller until paid; and(3) if unpaid, it is recoverable at law in the same manner as the original sales price.(b) The owner or former owner of tangible personal property, a factor of the owner or former owner, or an agent of the owner, former owner, or factor shall collect the sales tax and add the amount of the tax to the sales price of the tangible personal property if the person delivers the property to a consumer in this state or to another person for redelivery to a consumer in this state under a sale of the property that is not a sale for resale and that is made by a seller not engaged in business in this state.(c) When several taxable items are sold together and at the same time, the sales tax is determined on the sum of the sales prices of the items sold exclusive of any item the sale of which is exempted by this chapter.(d) For purposes of the printer's tax collection duty, it is presumed that printed materials that are distributed by the United States Postal Service singly or in sets addressed to individual recipients, other than the purchaser, and that are either produced at a printer's facility in this state or purchased in this state are for use in Texas and the printer must collect the tax imposed under this chapter. In order to overcome this presumption a purchaser of printed materials that are distributed by the United States Postal Service singly or in sets addressed to individual recipients, other than the purchaser, is required to issue an exemption certificate to the printer if the printed materials are for distribution to both in-state and out-of-state recipients. The certificate must contain the statement that the printed materials are for multistate use and that the purchaser agrees to pay to this state all taxes that are or may become due to the state on the taxable items purchased under the exemption certificate. In this subsection, "printed materials" is defined to be materials that are produced by web offset or rotogravure printing processes. A printer is relieved of the obligation of collecting the taxes imposed by this chapter on printed materials that are distributed by the United States Postal Service singly or in sets addressed to individual recipients, other than the purchaser, but is required to file a report as provided by Section 151.407.
Acts 1981, 67th Leg., p. 1550, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 2001, 77th Leg., ch. 397, Sec. 1, eff. Sept. 1, 2001.
Sec. 151.053. SALES TAX BRACKETS. (a) If the sales price involves a fraction of a dollar, the sales tax to be added to the sales price shall be computed by multiplying the percentage rate of the sales tax times the amount of the sale. A fraction of one cent that is less than one-half of one cent is not collected and a fraction of one cent that is equal to one-half of one cent or more is collected as one cent of tax.(b) The comptroller may publish schedules and brackets of amounts of taxes based on the formula provided by Subsection (a) of this section for use in the collection of the taxes imposed by this chapter.
Acts 1981, 67th Leg., p. 1550, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 13, Sec. 2, eff. Oct. 2, 1984; Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1, Sec. 2, eff. Jan. 1, 1987; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 3, Sec. 1.
Sec. 151.054. GROSS RECEIPTS PRESUMED SUBJECT TO TAX. (a) Except as provided by Subsection (d) of this section, all gross receipts of a seller are presumed to have been subject to the sales tax unless a properly completed resale or exemption certificate is accepted by the seller.(b) A sale is exempt if the seller receives in good faith from a purchaser, who is in the business of selling, leasing, or renting taxable items, a resale certificate stating that the tangible personal property or service is acquired for the purpose of selling, leasing, or renting it in the regular course of business or for the purpose of transferring it as an integral part of a taxable service performed in the regular course of business.(c) A sale is exempt if the seller receives in good faith from a purchaser an exemption certificate stating qualifications for an exemption provided in Subchapter H of this chapter.(d) A sale of liquor, wine, beer, or malt liquor by the holder of a manufacturer's license, wholesaler's permit, general class B wholesaler's permit, local class B wholesaler's permit, local distributor's permit, or a general, local, or branch distributor's license issued under the Alcoholic Beverage Code to the holder of a retail license or permit issued under the Alcoholic Beverage Code is presumed to be a sale for resale. In a sale to which this section applies, the seller is not required to receive a resale certificate from the purchaser.(e) Properly completed resale or exemption certificates should be in the possession of the seller at the time the nontaxable transaction occurs. If the seller is not in possession of these certificates within 60 days from the date written notice requiring possession of them is given to the seller by the comptroller, deductions claimed by the seller that require delivery of the certificates shall be disallowed. If the seller delivers the certificates to the comptroller within the 60-day period, the comptroller may verify the reason or basis for exemption claimed in the certificates before allowing any deductions. A deduction may not be granted on the basis of certificates delivered to the comptroller after the 60-day period.
Acts 1981, 67th Leg., p. 1550, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 15, Sec. 2, eff. Oct. 2, 1984; Acts 1985, 69th Leg., ch. 206, Sec. 6, eff. Oct. 1, 1985; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 16.
Sec. 151.055. SALES OF ITEMS ACQUIRED FOR LEASE OR RENTAL. (a) If a person purchases tangible personal property by means of a sale for resale for the purpose of renting or leasing the property for use but subsequently sells the property in an occasional sale before the person has collected and paid to the state an amount of sales tax on rental or lease charges equal to the amount of sales tax that would have been due if the person had not acquired the property at a sale for resale, the person at the time of the occasional sale shall include in his receipts from taxable sales the amount by which the purchase price of the item at the occasional sale exceeds the amount received from renting or leasing the property.(b) If tangible personal property is rented or leased under an agreement that provides that all or a portion of the rental or lease payments may be credited against the purchase price of the item, the lessor shall collect the sales tax on the sales price, including the sum of all lease or rental payments for the term of the lease or rental, at the time the purchaser takes possession of the property or when the first payment is due, whichever period is the earlier. If the purchaser-lessee returns the taxable item to the seller-lessor before the end of the lease or rental period without having acquired title to the property, the seller-lessor may take a credit against other taxes due under this chapter or claim a refund as provided by this code for an amount equal to the amount of the taxes paid on the unpaid portion of the sales price.
Acts 1981, 67th Leg., p. 1551, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 9, Sec. 2, eff. Oct. 2, 1984.
Sec. 151.056. PROPERTY CONSUMED IN CONTRACTS TO IMPROVE REAL PROPERTY. (a) A contractor is the consumer of tangible personal property furnished by him and incorporated into the property of his customer if the contract between the contractor and his customer contains a lump-sum price covering both the performance of the service and the furnishing of the necessary incidental material.(b) A contractor is the seller of tangible personal property furnished by him and incorporated into the property of his customer, from whom he shall collect the tax, if the contract between the contractor and his customer contains separate amounts for the performance of the service and for the furnishing of the necessary incidental material. The tax rate is applied to the price of the materials as agreed in the contract or the price of the materials to the contractor, whichever is the greater.(c) If a contractor has paid the sales tax to his supplier when the tangible personal property is purchased, the contractor may credit the amount of the tax paid to the supplier against the tax imposed as provided in Subsection (b) of this section with respect to a subsequent sale of the property.(d) In this section, "contractor" means a person who makes an improvement on real estate and who, as a necessary or incidental part of the service, incorporates tangible personal property into the property improved.(e) This section does not apply to the use or consumption of tangible personal property as a necessary or incidental part of a taxable service.(f) A contractor is not eligible for the exemption provided by Section 151.318 on items used in the performance of a contract to improve real property.(g) In this subsection, "ready mix concrete contractor" means a person who manufactures or produces ready mixed concrete for construction purposes and incorporates the ready mixed concrete in the property improved. A ready mix concrete contractor performing a contract must separate and individually invoice the customer for each yard of ready mixed concrete produced and consumed for the improvement of real property and collect and remit the tax imposed under this chapter on the ready mixed concrete produced and consumed. The tax rate is applied to the price of the materials determined by the greater of the invoice price or fair market value of ready mixed concrete incorporated into the project. This subsection does not apply to an invoice submitted by a ready mix concrete contractor for a public works project.
Acts 1981, 67th Leg., p. 1551, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 17; Acts 2003, 78th Leg., ch. 209, Sec. 18, eff. Oct. 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1266, Sec. 3, eff. September 1, 2007.
Sec. 151.0565. TAXABLE ITEMS SOLD OR PROVIDED UNDER DESTINATION MANAGEMENT SERVICES CONTRACTS. (a) In this section:(1) "Destination management services" means the following services when provided under a qualified destination management services contract:(A) transportation management;(B) booking and managing entertainers;(C) coordination of tours or recreational activities;(D) meeting, conference, or event registration;(E) meeting, conference, or event staffing;(F) event management; and(G) meal coordination.(2) "Qualified destination management company" means a business entity that:(A) is incorporated or is a limited liability company;(B) receives at least 80 percent of the entity's annual total revenue from providing or arranging for the provision of destination management services;(C) maintains a permanent nonresidential office from which the destination management services are provided or arranged;(D) has at least three full-time employees;(E) spends at least one percent of the entity's annual gross receipts to market the destinations with respect to which destination management services are provided;(F) has at least 80 percent of the entity's clients described by Subdivision (3)(A) located outside this state;(G) other than office equipment used in the conduct of the entity's business, does not own equipment used to directly provide destination management services, including motor coaches, limousines, sedans, dance floors, decorative props, lighting, podiums, sound or video equipment, or equipment for catered meals;(H) is not doing business as a caterer;(I) does not provide services for weddings;(J) does not own a venue at which events or activities for which destination management services are provided occur; and(K) is not a subsidiary of another entity that, and is not a member of an affiliated group, as that term is defined by Section 171.0001, another member of which:(i) is doing business as, or owns or operates another entity doing business as, a caterer; or(ii) owns or operates a venue described by Paragraph (J).(3) "Qualified destination management services contract" means a contract under which at least three of the destination management services listed in Subdivision (1) are provided:(A) in this state to a client that is not an individual and that:(i) is a corporation, partnership, limited liability company, trade association, or other business entity, other than a social club or fraternal organization;(ii) has its principal place of business outside the county where the destination management services are to be provided; and(iii) agrees to pay the qualified destination management company for all destination management services provided to the client under the terms of the contract; and(B) by a qualified destination management company that pays or accrues liability for the payment of taxes imposed by this chapter on purchases of taxable items that will be consumed or used by the company in performing the contract.(b) A qualified destination management company is the consumer of taxable items sold or otherwise provided under a qualified destination management services contract, and the destination management services provided under the contract are not considered taxable services, as that term is defined by Section 151.0101.
Added by Acts 2009, 81st Leg., R.S., Ch. 1360, Sec. 2, eff. September 1, 2009.
Sec. 151.057. SERVICES BY EMPLOYEES. The following services are not taxable under this chapter:(1) a service performed by an employee for his employer in the regular course of business, within the scope of the employee's duties, and for which the employee is paid his regular wages or salary;(2) a service performed by an employee of a temporary employment service as defined by Section 93.001, Labor Code, for an employer to supplement the employer's existing work force on a temporary basis, when the service is normally performed by the employer's own employees, the employer provides all supplies and equipment necessary, and the help is under the direct or general supervision of the employer to whom the help is furnished; or(3) a service performed by assigned employees of a staff leasing company, either licensed under Chapter 91, Labor Code, or exempt from the licensing requirements of that chapter, for a client company under a written contract that provides for shared employment responsibilities between the staff leasing company and the client company for the assigned employees, most of whom must have been previously employed by the client company. The comptroller shall prescribe by rule the minimum percentage of assigned employees that must have been previously employed by the client company, the minimum time period the assigned employees must have been employed by the client company prior to the commencement of its contract, and such other criteria as the comptroller may deem necessary to properly implement this section.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, Sec. 9, eff. Oct. 2, 1984. Amended by Acts 1989, 71st Leg., ch. 254, Sec. 1, eff. Oct. 1, 1989; Acts 1997, 75th Leg., ch. 1040, Sec. 18, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 1263, Sec. 14, eff. Oct. 1, 2001.
Sec. 151.058. PROPERTY USED TO PROVIDE TAXABLE SERVICES AND SALE PRICE OF TAXABLE SERVICES. (a) A person performing services taxable under this chapter is the consumer of machinery and equipment used in performing the services.(b) The total amount charged for a service taxable under this chapter is subject to tax, including charges for labor, materials, overhead, and profit, regardless of whether such charges are separately identified to the purchaser of the service.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 18. Amended by Acts 1993, 73rd Leg., ch. 1031, Sec. 20, eff. Sept. 1, 1993.
Sec. 151.059. FEE IMPOSED IN LIEU OF LOCAL SALES AND USE TAXES. Section effective contingent upon federal legislation as provided in Acts 1989, 71st Leg., ch. 291, Sec. 5. (a) A nonresident of this state who is required pursuant to federal law to collect sales or use tax under this chapter may elect to pay a fee to the comptroller in lieu of all local sales and use taxes authorized or governed by Title 3 of this code.(b) A person eligible under federal law may elect to pay the fee imposed by this section by written notification to the comptroller. Such notification must be made within 90 days of the date of the first sale on which tax is required to be collected or within such other period as the comptroller may by rule require. The comptroller may require that a notification under this section be made on a form prescribed by the comptroller and contain any information relevant to the collection of taxes under this chapter. A person who does not elect to pay the fee imposed by this section shall collect and remit all applicable state and local sales and use tax imposed under the laws of this state in the same manner as a resident of this state.(c) Unless another rate is required by federal law, the fee imposed under this section shall be the weighted average rate of local sales and use tax collected in this state during the preceding state fiscal year, applied to the total amount subject to sales and use tax imposed by this chapter. The rate shall be determined by the comptroller as soon as practicable following the end of each state fiscal year and shall be effective beginning on January 1 following the end of that state fiscal year. The weighted average rate of local sales and use tax shall be computed by:(1) dividing the aggregate amount of all local sales and use taxes paid in the state by the aggregate amount of all sales and uses to which:(A) the state sales and use tax applies; and(B) local jurisdictions have the power to impose a local sales or use tax; and(2) rounding that result to the nearest .0025.(d) A fee imposed under this section is subject to the provisions of Subtitle B of Title 2 of this code in the same manner as a tax imposed under this chapter.(e) The fee imposed by this chapter shall be remitted quarterly in a manner prescribed by the comptroller, subject to the limitations of applicable federal law, and shall be apportioned and distributed as required by Section 403.107, Government Code.(f) Nothing in this section shall be construed to apply to nonresident persons whose activities would subject them to a duty to pay, collect, or remit a sales or use tax under this chapter or Title 3 of this code in the absence of federal legislation.
Added by Acts 1989, 71st Leg., ch. 291, Sec. 3.
Sec. 151.060. PROPERTY CONSUMED IN REPAIR OF MOTOR VEHICLE. (a) Except as provided by Subsection (b), a person who repairs a motor vehicle is the seller of all tangible personal property consumed in providing that service except electricity and gas, and shall collect the tax due under this chapter from the customer.(b) A person who repairs a motor vehicle is the consumer of all tangible personal property consumed in providing that service if the contract between the person and the customer contains a lump-sum price covering both the performance of the service and the furnishing of the consumed tangible personal property.(c) In this section, tangible personal property is considered consumed if it can no longer be used for its intended purposes in the normal course of business or is not retained or reusable by the person providing the repair service.
Added by Acts 1991, 72nd Leg., ch. 378, Sec. 1, eff. Oct. 1, 1991.
Sec. 151.061. SOURCING OF CHARGES FOR MOBILE TELECOMMUNICATIONS SERVICES. (a) In this section:(1) "Home service provider" means the facilities-based carrier or reseller with which the customer contracts for the provi
TAX CODETITLE 2. STATE TAXATIONSUBTITLE E. SALES, EXCISE, AND USE TAXESCHAPTER 151. LIMITED SALES, EXCISE, AND USE TAXSUBCHAPTER A. GENERAL PROVISIONSSec. 151.001. SHORT TITLE. This chapter may be cited as the Limited Sales, Excise, and Use Tax Act.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.002. APPLICABILITY OF DEFINITIONS, ETC. The definitions and other provisions of this chapter relating to the collection, administration, and enforcement of the taxes imposed by this chapter, including the requirements for sales tax permits, apply to the parties to a sale of a taxable item that is exempted from the taxes imposed by this chapter but that is subject to the taxes imposed by a city under Chapter 321 of this code.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.27(b)(1), eff. Aug. 28, 1989.
Sec. 151.0028. "AMUSEMENT SERVICES". (a) "Amusement services" means the provision of amusement, entertainment, or recreation, but does not include the provision of educational or health services if prescribed by a licensed practitioner of the healing arts for the primary purpose of education or health maintenance or improvement.(b) "Amusement services" includes membership in a private club or organization that provides entertainment, recreational, sports, dining, or social facilities to its members.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 3, eff. Oct. 2, 1984. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 1.
Sec. 151.003. "BUSINESS". "Business" means an activity of or caused by a person for the purpose of a direct or indirect gain, benefit, or advantage.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.0031. "COMPUTER PROGRAM". "Computer program" means a series of instructions that are coded for acceptance or use by a computer system and that are designed to permit the computer system to process data and provide results and information. The series of instructions may be contained in or on magnetic tapes, punched cards, printed instructions, or other tangible or electronic media.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, Sec. 1, eff. Oct. 2, 1984.
Sec. 151.0033. "CABLE TELEVISION SERVICE". "Cable television service" means the distribution of video programming with or without use of wires to subscribing or paying customers.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 4, eff. Oct. 2, 1984.
Sec. 151.0034. "CREDIT REPORTING SERVICE". "Credit reporting service" means assembling or furnishing credit history or credit information relating to any person.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 2.
Sec. 151.0035. "DATA PROCESSING SERVICE". "Data processing service" includes word processing, data entry, data retrieval, data search, information compilation, payroll and business accounting data production, the performance of a totalisator service with the use of computational equipment required by the Texas Racing Act (Article 179e, Vernon's Texas Civil Statutes), and other computerized data and information storage or manipulation. "Data processing service" also includes the use of a computer or computer time for data processing whether the processing is performed by the provider of the computer or computer time or by the purchaser or other beneficiary of the service. "Data processing service" does not include the transcription of medical dictation by a medical transcriptionist. "Data storage," as used in this section, does not include a classified advertisement, banner advertisement, vertical advertisement, or link when the item is displayed on an Internet website owned by another person.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 3. Amended by Acts 1997, 75th Leg., ch. 1275, Sec. 53, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1040, Sec. 11, eff. Sept. 1, 1997; Acts 2003, 78th Leg., ch. 209, Sec. 16, eff. Oct. 1, 2003.
Sec. 151.0036. "DEBT COLLECTION SERVICE". (a) "Debt collection service" means activity to collect or adjust a delinquent debt, to collect or adjust a claim, or to repossess property subject to a claim.(b) "Debt collection service" does not include:(1) the collection of:(A) a judgment by an attorney or by a partnership or professional corporation of attorneys if the attorney, partnership, or corporation represented the person in the suit from which the judgment arose; or(B) court-ordered child support or medical child support; or(2) a service provided by a person acting as a trustee in connection with the foreclosure sale of real property under a lien created by a mortgage, deed of trust, or security instrument.(c) "Debt collection service" includes the service performed for which a fee is collected under Section 3.506, Business & Commerce Code. The person collecting the check shall add the amount of the tax to the fee in accordance with Section 151.052 and shall collect the fee from the drawer or endorser of the check.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 4. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 9, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 341, Sec. 3.06, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1000, Sec. 5, eff. Oct. 1, 1995; Acts 2001, 77th Leg., ch. 1151, Sec. 1, 2(b), eff. July 1, 2001; Acts 2001, 77th Leg., ch. 1420, Sec. 2.001(d), eff. Sept. 1, 2001.
Sec. 151.0038. "INFORMATION SERVICE". (a) "Information service" means:(1) furnishing general or specialized news or other current information, including financial information, unless furnished to:(A) a newspaper or to a radio or television station licensed by the Federal Communications Commission; or(B) a member of a homeowners association of a residential subdivision or condominium development, and is furnished by the association or on behalf of the association; or(2) electronic data retrieval or research.(b) In this section, "newspaper" has the meaning assigned by Section 151.319(f).
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 5. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 10, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 6, eff. Oct. 1, 1995.
Sec. 151.0039. "INSURANCE SERVICE". (a) "Insurance service" means insurance loss or damage appraisal, insurance inspection, insurance investigation, insurance actuarial analysis or research, insurance claims adjustment or claims processing, or insurance loss prevention service.(b) "Insurance service" does not include insurance coverage for which a premium is paid or commissions paid to insurance agents for the sale of insurance or annuities.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 6.
Sec. 151.00393. INTERNET. "Internet" means collectively the myriad of computer and telecommunications facilities, including equipment and operating software, that comprise the interconnected worldwide network of networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor or successor protocols to the protocol, to communicate information of all kinds by wire or radio.
Added by Acts 1999, 76th Leg., ch. 394, Sec. 1, eff. Oct. 1, 1999.
Sec. 151.00394. INTERNET ACCESS SERVICE. (a) "Internet access service" means a service that enables users to access content, information, electronic mail, or other services offered over the Internet and may also include access to proprietary content, information, and other services as part of a package of services offered to consumers. The term does not include telecommunications services.(b) "Internet access service" does not include and the exemption under Section 151.325 does not apply to any other taxable service listed in Section 151.0101(a), unless the taxable service is provided in conjunction with and is merely incidental to the provision of Internet access service.(c) On and after October 1, 1999, "Internet access service" is not included in the definitions of "data processing service" and "information service."
Added by Acts 1999, 76th Leg., ch. 394, Sec. 1, eff. Oct. 1, 1999.
Sec. 151.004. "IN THIS STATE". "In this state" means within the exterior limits of Texas and includes all territory within these limits ceded to or owned by the United States.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.0045. "PERSONAL SERVICES". "Personal services" means those personal services listed as personal services under Group 721, Major Group 72 of the Standard Industrial Classification Manual, 1972, and includes massage parlors, escort services, and Turkish baths under Group 729 of said manual but does not include any other services listed under Group 729 unless otherwise covered under this Act, prepared by the statistical policy division of the office on management and budget, office of the president of the United States.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 5, eff. Oct. 2, 1984.
Sec. 151.0047. "REAL PROPERTY REPAIR AND REMODELING". (a) "Real property repair and remodeling" means the repair, restoration, remodeling, or modification of an improvement to real property other than:(1) a structure or separate part of a structure used as a residence;(2) an improvement immediately adjacent to a structure described by Subdivision (1) of this section and used in the residential occupancy of the structure or separate part of the structure by the person using the structure or part as a residence; or(3) an improvement to a manufacturing or processing production unit in a petrochemical refinery or chemical plant that provides increased capacity in the production unit.(b) In this section:(1) "Increased capacity" means the capability to produce:(A) additional products or services as measured by units per hour or units per year; or(B) a new product or service.(2) "Production unit" means a group of manufacturing and processing machines and ancillary equipment that together are necessary to create or produce a physical or chemical change beginning with the first processing of the raw material and ending with the finished product.(3) "New product" means a product that:(A) has different product properties and a different commercial application than the product previously manufactured or processed by the production unit that produced the previous product; and(B) is not created by straining or purifying an existing product or by making cosmetic changes, such as adding or removing color or odor, to or from an existing product.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 7. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 11, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 7, eff. Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1040, Sec. 12, eff. Sept. 1, 1997.
Sec. 151.0048. REAL PROPERTY SERVICE. (a) Except as provided by Subsection (b), "real property service" means:(1) landscaping;(2) the care and maintenance of lawns, yards, or ornamental trees or other plants;(3) the removal or collection of garbage, rubbish, or other solid waste other than:(A) hazardous waste;(B) industrial solid waste;(C) waste material that results from an activity associated with the exploration, development, or production of oil, gas, geothermal resources, or any other substance or material regulated by the Railroad Commission of Texas under Section 91.101, Natural Resources Code;(D) domestic sewage or an irrigation return flow, to the extent the sewage or return flow does not constitute garbage or rubbish; and(E) industrial discharges subject to regulation by permit issued pursuant to Chapter 26, Water Code;(4) building or grounds cleaning, janitorial, or custodial services;(5) a structural pest control service covered by Section 1951.003, Occupations Code; or(6) the surveying of real property.(b) "Real property service" does not include a service listed under Subsection (a) if the service is purchased by a contractor as part of the improvement of real property with a new structure to be used as a residence or other improvement immediately adjacent to the new structure and used in the residential occupancy of the structure.(b-1) "Real property service" does not include a service listed under Subsection (a) if the service is performed by a landman and is necessary to negotiate or secure land or mineral rights for acquisition or trade, including:(1) determining ownership;(2) negotiating a trade or agreement regarding land or mineral rights;(3) drafting and administering contractual agreements;(4) ensuring that all governmental regulations are complied with; and(5) any other action necessary to complete the transaction related to a service described by this subsection, other than an information service described by Section 151.0038.(c) In this section, "contractor" means a person who makes an improvement on real estate and who, as a necessary or incidental part of the service, incorporates tangible personal property into the property improved. The term includes a builder, developer, speculative builder, or other person acting as a builder to improve residential real property.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 8. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 12, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 1031, Sec. 19, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 1000, Sec. 7, eff. Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1040, Sec. 13, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1114, Sec. 1.01, eff. Oct. 1, 1999; Acts 1999, 76th Leg., ch. 1114, Sec. 2.01, eff. Oct. 1, 2001; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.815, eff. Sept. 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1266, Sec. 1, eff. September 1, 2007.
Sec. 151.005. "SALE" OR "PURCHASE". "Sale" or "purchase" means any of the following when done or performed for consideration:(1) a transfer of title or possession of tangible personal property;(2) the exchange, barter, lease, or rental of tangible personal property;(3) the performance of a taxable service, the charge for an extended warranty or service contract for the performance of a taxable service, or, in the case of an amusement service, a transfer of title to or possession of a ticket or other admission document, the collection of an admission fee, whether by individual performance, subscription series, or membership privilege, the collection of dues or a fee, charge, or assessment, including an initiation fee, by a club or organization for membership or a special privilege, status, or membership classification in the club or organization, or the use of a coin-operated machine;(4) the production, fabrication, processing, printing, or imprinting of tangible personal property for consumers who directly or indirectly furnish the materials used in the production, fabrication, processing, printing, or imprinting;(5) the furnishing and distribution of tangible personal property by a social club or fraternal organization to anyone;(6) the furnishing, preparation, or service of food, meals, or drinks;(7) a transfer of the possession of tangible personal property if the title to the property is retained by the seller as security for the payment of the price; or(8) a transfer of the title or possession of tangible personal property that has been produced, fabricated, or printed to the special order of the customer.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 6, eff. Oct. 2, 1984; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 15; Acts 2003, 78th Leg., ch. 209, Sec. 17, eff. Oct. 1, 2003.
Sec. 151.006. "SALE FOR RESALE." (a) "Sale for resale" means a sale of:(1) tangible personal property or a taxable service to a purchaser who acquires the property or service for the purpose of reselling it in the United States of America or a possession or territory of the United States of America or in the United Mexican States in the normal course of business in the form or condition in which it is acquired or as an attachment to or integral part of other tangible personal property or taxable service;(2) tangible personal property to a purchaser for the sole purpose of the purchaser's leasing or renting it in the United States of America or a possession or territory of the United States of America or in the United Mexican States in the normal course of business to another person, but not if incidental to the leasing or renting of real estate;(3) tangible personal property to a purchaser who acquires the property for the purpose of transferring it in the United States of America or a possession or territory of the United States of America or in the United Mexican States as an integral part of a taxable service; or(4) a taxable service performed on tangible personal property that is held for sale by the purchaser of the taxable service.(b) Subsection (a)(3) applies to a transfer of a wireless voice communication device as an integral part of a taxable service, regardless of whether there is a separate charge for the wireless voice communication device or whether the purchaser is the provider of the taxable service, if payment for the service is a condition for receiving the wireless voice communication device.
Acts 1981, 67th Leg., p. 1546, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 7, eff. Oct. 2, 1984; Acts 1995, 74th Leg., ch. 351, Sec. 1, eff. Sept. 1, 1995.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1266, Sec. 2, eff. September 1, 2007.
Sec. 151.007. "SALES PRICE" OR "RECEIPTS". (a) Except as provided by Subsections (c) and (d), "sales price" or "receipts" means the total amount for which a taxable item is sold, leased, or rented, valued in money, without a deduction for the cost of:(1) the taxable item sold, leased, or rented;(2) the materials used, labor or service employed, interest, losses, or other expenses;(3) the transportation or installation of tangible personal property; or(4) transportation incident to the performance of a taxable service.(b) The total amount for which a taxable item is sold, leased, or rented includes a service that is a part of the sale and the amount of credit given to the purchaser by the seller.(c) "Sales price" or "receipts" does not include any of the following if separately identified to the customer by such means as an invoice, billing, sales slip or ticket, or contract:(1) a cash discount allowed on the sale;(2) the amount charged for tangible personal property returned by a customer if the total amount charged is refunded by cash or credit;(3) a refund of the charges for the performance of a taxable service;(4) finance, carrying and service charges, or interest from credit extended on sales of taxable items under a conditional sales contract or other contract providing for the deferred payment of the purchase price;(5) the value of tangible personal property that:(A) is taken by a seller in trade as all or part of the consideration for a sale of a taxable item; and(B) is of a type of property sold by the seller in the regular course of business;(6) the face value of United States coin or currency in a sale of that coin or currency in which the total consideration given by the purchaser exceeds the face value of the coin or currency; or(7) a voluntary gratuity or a reasonable mandatory charge for the service of a meal or food products, including soft drinks and candy, for immediate human consumption when the service charge is separated from the sales price of the meal or food product and identified as a gratuity or tip and when the total amount of the service charge is disbursed by the employer to employees who customarily and regularly provide the service.(d) "Sales price" or "receipts" of items sold as edible products for human consumption through the use or operation of a money-operated vending machine is 50 percent of the total gross receipts of the vendor from sales of those items, except for sales of soft drinks and candy, for which the "sales price" or "receipts" are the total gross receipts from those sales.(e) The sales price of membership in a private club or organization consists of the dues, fees, and other charges and assessments, including initiation fees, required for membership or a special privilege, status, or membership classification in the club or organization.
Acts 1981, 67th Leg., p. 1546, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 8, eff. Oct. 2, 1984; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 9; Acts 1997, 75th Leg., ch. 1040, Sec. 14, eff. Oct. 1, 1997; Acts 2001, 77th Leg., ch. 1263, Sec. 12, eff. Oct. 1, 2001.
Sec. 151.0075. "SECURITY SERVICE". "Security service" means service for which a license is required under Section 1702.101 or 1702.102, Occupations Code.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 10. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 14.837, eff. Sept. 1, 2001.
Sec. 151.008. "SELLER" OR "RETAILER". (a) "Seller" or "retailer" means a person engaged in the business of making sales of taxable items of a kind the receipts from the sale of which are included in the measure of the sales or use tax imposed by this chapter.(b) "Seller" and "retailer" include:(1) a person in the business of making sales at auction of tangible personal property owned by the person or by another;(2) a person who makes more than two sales of taxable items during a 12-month period, including sales made in the capacity of an assignee for the benefit of creditors or receiver or trustee in bankruptcy;(3) a person regarded by the comptroller as a seller or retailer under Section 151.024 of this code;(4) a hotel, motel, or owner or lessor of an office or residential building or development that contracts and pays for telecommunications services for resale to guests or tenants; and(5) a person who engages 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.
Acts 1981, 67th Leg., p. 1547, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1985, 69th Leg., ch. 206, Sec. 2, eff. Oct. 1, 1985; Acts 1991, 72nd Leg., 1st C.S., ch. 5, Sec. 14.13.
Sec. 151.009. "TANGIBLE PERSONAL PROPERTY". "Tangible personal property" means personal property that can be seen, weighed, measured, felt, or touched or that is perceptible to the senses in any other manner, and, for the purposes of this chapter, the term includes a computer program and a telephone prepaid calling card.
Acts 1981, 67th Leg., p. 1547, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, Sec. 2, eff. Oct. 2, 1984; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 11; Acts 1997, 75th Leg., ch. 1040, Sec. 16, eff. Sept. 1, 1997.
Sec. 151.010. TAXABLE ITEM. "Taxable item" means tangible personal property and taxable services. Except as otherwise provided by this chapter, the sale or use of a taxable item in electronic form instead of on physical media does not alter the item's tax status.
Acts 1981, 67th Leg., p. 1547, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 1, eff. Oct. 2, 1984; Acts 2001, 77th Leg., ch. 1263, Sec. 13, eff. Oct. 1, 2001.
Sec. 151.0101. "TAXABLE SERVICES". (a) "Taxable services" means:(1) amusement services;(2) cable television services;(3) personal services;(4) motor vehicle parking and storage services;(5) the repair, remodeling, maintenance, and restoration of tangible personal property, except:(A) aircraft;(B) a ship, boat, or other vessel, other than:(i) a taxable boat or motor as defined by Section 160.001;(ii) a sports fishing boat; or(iii) any other vessel used for pleasure;(C) the repair, maintenance, and restoration of a motor vehicle; and(D) the repair, maintenance, creation, and restoration of a computer program, including its development and modification, not sold by the person performing the repair, maintenance, creation, or restoration service;(6) telecommunications services;(7) credit reporting services;(8) debt collection services;(9) insurance services;(10) information services;(11) real property services;(12) data processing services;(13) real property repair and remodeling;(14) security services;(15) telephone answering services;(16) Internet access service; and(17) a sale by a transmission and distribution utility, as defined in Section 31.002, Utilities Code, of transmission or delivery of service directly to an electricity end-use customer whose consumption of electricity is subject to taxation under this chapter.(b) The comptroller shall have exclusive jurisdiction to interpret Subsection (a) of this section.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 2, eff. Oct. 2, 1984. Amended by Acts 1985, 69th Leg., ch. 206, Sec. 3, eff. Oct. 1, 1985; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 12; Acts 1989, 71st Leg., ch. 1249, Sec. 1, eff. Oct. 1, 1989; Acts 1991, 72nd Leg., 1st C.S., ch. 5, Sec. 14.021(a); Acts 1999, 76th Leg., ch. 394, Sec. 2, eff. Oct. 1, 1999; Acts 1999, 76th Leg., ch. 405, Sec. 54, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1420, Sec. 18.008, eff. Sept. 1, 2001.
Sec. 151.0102. "TELEPHONE ANSWERING SERVICES". "Telephone answering services" means the receiving and relaying of telephone messages by a human operator. The term does not include the automated receiving and relaying of telephone messages included within the definition of "telecommunications services" under Section 151.0103.
Added by Acts 1991, 72nd Leg., 1st C.S., ch. 5, Sec. 14.031.
Sec. 151.0103. TELECOMMUNICATIONS SERVICES. (a) For the purposes of this title only, "telecommunications services" means the electronic or electrical transmission, conveyance, routing, or reception of sounds, signals, data, or information utilizing wires, cable, radio waves, microwaves, satellites, fiber optics, or any other method now in existence or that may be devised, including but not limited to long-distance telephone service. The term does not include:(1) the storage of data or information for subsequent retrieval or the processing, or reception and processing, of data or information intended to change its form or content;(2) the sale or use of a telephone prepaid calling card;(3) Internet access service; or(4) a pay telephone coin sent-paid telephone call.(b) The exemption provided by Subsection (a)(4) applies only to the portion of the sales price of the telecommunications service that is paid by coin.
Added by Acts 1985, 69th Leg., ch. 206, Sec. 4, eff. Oct. 1, 1985. Amended by Acts 1997, 75th Leg., ch. 1040, Sec. 17, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 394, Sec. 3, eff. Oct. 1, 1999.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1199, Sec. 1, eff. September 1, 2007.
Sec. 151.01032. "TELEPHONE PREPAID CALLING CARD". "Telephone prepaid calling card" means a card or other item, including an access code, that represents the right to make one or more telephone calls for which payment is made in incremental amounts and before the call is initiated. The term "telephone prepaid calling card" does not include a card sold by mechanical means for consideration of one dollar or less.
Added by Acts 1997, 75th Leg., ch. 1040, Sec. 15, eff. Sept. 1, 1997.
Sec. 151.0104. TELEPHONE COMPANY. For the purposes of this chapter, "telephone company" means a person that owns or operates a telephone line or telephone in this state and charges for its use.
Added by Acts 1985, 69th Leg., ch. 206, Sec. 4, eff. Oct. 1, 1985. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 13.
Sec. 151.011. "USE" AND "STORAGE". (a) Except as provided by Subsection (c) of this section, "use" means the exercise of a right or power incidental to the ownership of tangible personal property over tangible personal property, including tangible personal property other than printed material that has been processed, fabricated, or manufactured into other property or attached to or incorporated into other property transported into this state, and, except as provided by Section 151.056(b) of this code, includes the incorporation of tangible personal property into real estate or into improvements of real estate whether or not the real estate is subsequently sold.(b) With respect to a taxable service, "use" means the derivation in this state of direct or indirect benefit from the service.(c) "Use" does not include the sale of tangible personal property or a taxable service in the regular course of business, the transfer of a taxable service as an integral part of the transfer of tangible personal property in the regular course of business, or the transfer of tangible personal property as an integral part of the transfer of a taxable service in the regular course of business.(d) Except as provided by Subsection (e) of this section, "storage" means the keeping or retaining for any purpose in this state of tangible personal property sold by a retailer.(e) "Storage" does not include the keeping or retaining of tangible personal property for sale in the regular course of business.(f) Neither "use" nor "storage" includes the exercise of a right or power over or the keeping or retaining of tangible personal property for the purpose of:(1) transporting the property outside the state for use solely outside the state; or(2) processing, fabricating, or manufacturing the property into other property or attaching the property to or incorporating the property into other property to be transported outside the state for use solely outside the state.
Acts 1981, 67th Leg., p. 1547, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 14; Acts 1989, 71st Leg., ch. 323, Sec. 1, eff. Oct. 1, 1989; Acts 2003, 78th Leg., ch. 1310, Sec. 97, eff. Oct. 1, 2003.
Sec. 151.012. EFFECTIVE DATE OF TAX RATE CHANGES. (a) A change in the rate of the tax imposed under Sections 151.051 and 151.101 must take effect on the first day of a calendar quarter.(b) If the performance of a taxable service begins before the effective date of a change in the tax rate and the performance will not be completed until after that effective date, the change in the tax rate applies to the first billing period for the service performed on or after that effective date.
Added by Acts 2003, 78th Leg., ch. 1310, Sec. 98, eff. Oct. 1, 2003.
SUBCHAPTER B. ADMINISTRATION AND RECORDSSec. 151.021. EMPLOYEES. The comptroller may employ accountants, auditors, investigators, assistants, and clerks for the administration of this chapter and may delegate to employees the authority to conduct hearings, prescribe rules, and perform other duties required by this chapter.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.022. RETROACTIVE EFFECT OF RULES. The comptroller may prescribe the extent to which a rule or ruling shall be applied without retroactive effect.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.023. INVESTIGATIONS AND AUDITS. (a) The comptroller, or another person authorized by the comptroller in writing, may examine, copy, and photograph the books, records, papers, and equipment of a person who sells taxable items or of a person liable for the use tax and may investigate the character of the business of the person to verify the accuracy of the person's report or to determine the amount of tax that may be required to be paid if no report has been filed.(b) For the purpose of determining the amount of tax collected and payable to the state, the amount of tax accruing and due, and whether a tax liability has been incurred under this chapter, the comptroller or a person authorized by the comptroller may:(1) inspect at any time during business hours any business premises where a taxable event has occurred and examine, copy, and photograph the books, returns, records, papers, and equipment relating to the conduct in question; and(2) require by delivery of written notice to the taxpayer or to an employee, representative, or agent of the taxpayer that, not later than the 10th working day after the date the notice is delivered, the taxpayer produce to an agent or designated representative of the comptroller for inspection the books, records, papers, and returns relating to the taxable activity stated in the notice.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 2001, 77th Leg., ch. 442, Sec. 9, eff. Sept. 1, 2001.
Sec. 151.0231. MANAGED AUDITS. (a) In this section, "managed audit" means a review and analysis of invoices, checks, accounting records, or other documents or information to determine a taxpayer's liability for tax under this chapter.(b) A managed audit may be limited to certain categories of liability under this chapter, including tax on:(1) sales of one or more types of taxable items;(2) purchases of assets;(3) purchases of expense items;(4) purchases under a direct payment permit; or(5) any other category specified in an agreement authorized by this section.(c) The comptroller may, in a written agreement, authorize a taxpayer to conduct a managed audit under this section. The agreement must:(1) be signed by an authorized representative of the comptroller and the taxpayer; and(2) specify the period to be audited and the procedure to be followed.(d) In determining whether to authorize a managed audit, the comptroller may consider, in addition to other factors the comptroller considers relevant:(1) the taxpayer's history of tax compliance;(2) the amount of time and resources the taxpayer has available to dedicate to the audit;(3) the extent and availability of the taxpayer's records; and(4) the taxpayer's ability to pay any expected liability.(e) The decision to authorize or not authorize a managed audit rests solely with the comptroller.(f) The comptroller may examine records and perform reviews that the comptroller determines are necessary before the audit is finalized to verify the results of the audit.(g) Unless the audit or information reviewed by the comptroller under Subsection (f) discloses fraud or wilful evasion of the tax, the comptroller may not assess a penalty and may waive all or part of the interest that would otherwise accrue on any amount identified to be due in a managed audit. This subsection does not apply to any amount collected by the taxpayer that was a tax or represented to be a tax but that was not remitted to this state.(h) Except as provided by Section 111.104(f), the taxpayer is entitled to a refund of any tax overpayment disclosed by a managed audit under this section.
Added by Acts 1999, 76th Leg., ch. 457, Sec. 1, eff. Oct. 1, 1999.
Sec. 151.024. PERSONS WHO MAY BE REGARDED AS RETAILERS. If the comptroller determines that it is necessary for the efficient administration of this chapter to regard a salesman, representative, peddler, or canvasser as the agent of a dealer, distributor, supervisor, or employer under whom he operates or from whom he obtains the tangible personal property that he sells, whether or not the sale is made in his own behalf or for the dealer, distributor, supervisor, or employer, the comptroller may so regard the salesman, representative, peddler, or canvasser, and may regard the dealer, distributor, supervisor, or employer as a retailer or seller for the purpose of this chapter.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.025. RECORDS REQUIRED TO BE KEPT. (a) All sellers and all other persons storing, using, or consuming in this state a taxable item purchased from a retailer shall keep the following records in the form the comptroller requires:(1) records of gross receipts, including documentation in the form of receipts, shipping manifests, invoices, and other pertinent papers, from each rental, lease, taxable service, and taxable labor transaction occurring during each reporting period;(2) records in the form of receipts, shipping manifests, invoices, and other pertinent papers of all purchases of taxable items from every source made during each reporting period; and(3) records in the form of receipts, shipping manifests, invoices, and other pertinent papers that substantiate each claimed deduction or exclusion authorized by law.(b) A record required by Subsection (a) of this section shall be kept for not less than four years from the day that it is made unless the comptroller authorizes its destruction at an earlier date.(c) Repealed by Acts 2003, 78th Leg., ch. 1310, Sec. 121(26) and Acts 2003, 78th Leg., ch. 209, Sec. 86(b).(d) If any nontaxable charges are combined with and not separately stated from taxable telecommunications service charges on the customer bill or invoice of a provider of telecommunications services, the combined charge is subject to tax unless the provider can identify the portion of the charges that are nontaxable through the provider's books and records kept in the regular course of business. If the nontaxable charges cannot reasonably be identified, the charges from the sale of both nontaxable services and taxable telecommunications services are attributable to taxable telecommunications services. The provider of telecommunications services has the burden of proving nontaxable charges.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1985, 69th Leg., ch. 206, Sec. 5, eff. Oct. 1, 1985; Acts 2001, 77th Leg., ch. 442, Sec. 10, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1310, Sec. 99, 121(26), eff. July 1, 2003; Acts 2003, 78th Leg., ch. 209, Sec. 86(a), (b), eff. Oct. 1, 2003.
Sec. 151.026. OUT-OF-STATE RECORDS. A taxpayer is entitled to keep or store the taxpayer's records outside this state. If the comptroller requests to examine a record kept or stored outside this state, the taxpayer shall bring the record into this state for the examination or permit the comptroller to examine the record at the out-of-state location.
Acts 1981, 67th Leg., p. 1549, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.027. CONFIDENTIALITY OF TAX INFORMATION. (a) Information in or derived from a record, report, or other instrument required to be furnished under this chapter is confidential and not open to public inspection, except for information set forth in a lien filed under this title or a permit issued under this chapter to a seller and except as provided by Subsection (c) of this section.(b) Information secured, derived, or obtained during the course of an examination of a taxpayer's books, records, papers, officers, or employees, including the business affairs, operations, profits, losses, and expenditures of the taxpayer, is confidential and not open to public inspection except as provided by Subsection (c) of this section.(c) This section does not prohibit:(1) the examination of information, if authorized by the comptroller, by another state officer or law enforcement officer, by a tax official of another state, by a tax official of the United Mexican States, or by an official of the United States if a reciprocal agreement exists;(2) the delivery to a taxpayer, or a taxpayer's authorized representative, of a copy of a report or other paper filed by the taxpayer under this chapter;(3) the publication of statistics classified to prevent the identification of a particular report or items in a particular report;(4) the use of records, reports, or information secured, derived, or obtained by the attorney general or the comptroller in an action under this chapter against the same taxpayer who furnished the information;(5) the delivery to a successor, receiver, executor, administrator, assignee, or guarantor of a taxpayer of information about items included in the measure and amounts of any unpaid tax or amounts of tax, penalties, and interest required to be collected;(6) the delivery of information to a municipality, county, or other local governmental entity in accordance with Section 321.3022, 322.2022, or 323.3022; or(7) the release of information in or derived from a record, report, or other instrument required to be furnished under this chapter by a governmental body, as that term is defined in Section 552.003, Government Code.
Acts 1981, 67th Leg., p. 1549, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1995, 74th Leg., ch. 351, Sec. 3, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1000, Sec. 69, eff. Oct. 1, 1995; Acts 1999, 76th Leg., ch. 1218, Sec. 3, eff. Sept. 1, 1999.Amended by: Acts 2009, 81st Leg., R.S., Ch. 1360, Sec. 1, eff. September 1, 2009.
Sec. 151.029. REMEDIES NOT EXCLUSIVE. An action taken by the comptroller or the attorney general under this chapter is not an election to pursue one remedy to the exclusion of any other remedy authorized by this chapter.
Acts 1981, 67th Leg., p. 1549, ch. 389, Sec. 1, eff. Jan. 1, 1982.
SUBCHAPTER C. IMPOSITION AND COLLECTION OF SALES TAXSec. 151.051. SALES TAX IMPOSED. (a) A tax is imposed on each sale of a taxable item in this state.(b) The sales tax rate is 6-1/4 percent of the sales price of the taxable item sold.
Added by Acts 1981, 67th Leg., p. 1550, ch. 389, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 13, Sec. 1, eff. Oct. 2, 1984; Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1, Sec. 1, eff. Jan. 1, 1987; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 1, Sec. 1; Acts 1990, 71st Leg., 6th C.S., ch. 5, Sec. 1.01, eff. July 1, 1990.
For expiration of this section, see Subsection (d).Sec. 151.0515. TEXAS EMISSIONS REDUCTION PLAN SURCHARGE. (a) In this section, "equipment" includes all off-road, heavy-duty diesel equipment, other than implements of husbandry used solely for agricultural purposes, including:(1) pavers;(2) tampers/rammers;(3) plate compactors;(4) concrete pavers;(5) rollers;(6) scrapers;(7) paving equipment;(8) surface equipment;(9) signal boards/light plants;(10) trenchers;(11) bore/drill rigs;(12) excavators;(13) concrete/industrial saws;(14) cement and mortar mixers;(15) cranes;(16) graders;(17) off-highway trucks;(18) crushing/processing equipment;(19) rough terrain forklifts;(20) rubber tire loaders;(21) rubber tire tractors/dozers;(22) tractors/loaders/backhoes;(23) crawler tractors/dozers;(24) skid steer loaders;(25) off-highway tractors;(26) Dumpsters/tenders; and(27) mining equipment.(b) In each county in this state, a surcharge is imposed on the retail sale, lease, or rental of new or used equipment in an amount equal to two percent of the sale price or the lease or rental amount.(b-1) In each county in this state, a surcharge is imposed on the storage, use, or other consumption in this state of new or used equipment. The surcharge is at the same percentage rate as is provided by Subsection (b) on the sales price or the lease or rental amount of the equipment.(c) The surcharge shall be collected at the same time and in the same manner and shall be administered and enforced in the same manner as the tax imposed under this chapter. The comptroller shall adopt any additional procedures needed for the collection, administration, and enforcement of the surcharge authorized by this section and shall deposit all remitted surcharges to the credit of the Texas emissions reduction plan fund.(d) This section expires August 31, 2019.
Added by Acts 2001, 77th Leg., ch. 967, Sec. 2, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 1331, Sec. 21, eff. July 1, 2003.Amended by: Acts 2005, 79th Leg., Ch. 1125, Sec. 17, eff. September 1, 2005.Acts 2007, 80th Leg., R.S., Ch. 262, Sec. 2.13, eff. June 8, 2007.Acts 2009, 81st Leg., R.S., Ch. 1125, Sec. 18, eff. September 1, 2009.
Sec. 151.052. COLLECTION BY RETAILER. (a) Except as provided by Subsection (d), a seller who makes a sale subject to the sales tax imposed by this chapter shall add the amount of the tax to the sales price, and when the amount of the tax is added:(1) it becomes a part of the sales price;(2) it is a debt of the purchaser to the seller until paid; and(3) if unpaid, it is recoverable at law in the same manner as the original sales price.(b) The owner or former owner of tangible personal property, a factor of the owner or former owner, or an agent of the owner, former owner, or factor shall collect the sales tax and add the amount of the tax to the sales price of the tangible personal property if the person delivers the property to a consumer in this state or to another person for redelivery to a consumer in this state under a sale of the property that is not a sale for resale and that is made by a seller not engaged in business in this state.(c) When several taxable items are sold together and at the same time, the sales tax is determined on the sum of the sales prices of the items sold exclusive of any item the sale of which is exempted by this chapter.(d) For purposes of the printer's tax collection duty, it is presumed that printed materials that are distributed by the United States Postal Service singly or in sets addressed to individual recipients, other than the purchaser, and that are either produced at a printer's facility in this state or purchased in this state are for use in Texas and the printer must collect the tax imposed under this chapter. In order to overcome this presumption a purchaser of printed materials that are distributed by the United States Postal Service singly or in sets addressed to individual recipients, other than the purchaser, is required to issue an exemption certificate to the printer if the printed materials are for distribution to both in-state and out-of-state recipients. The certificate must contain the statement that the printed materials are for multistate use and that the purchaser agrees to pay to this state all taxes that are or may become due to the state on the taxable items purchased under the exemption certificate. In this subsection, "printed materials" is defined to be materials that are produced by web offset or rotogravure printing processes. A printer is relieved of the obligation of collecting the taxes imposed by this chapter on printed materials that are distributed by the United States Postal Service singly or in sets addressed to individual recipients, other than the purchaser, but is required to file a report as provided by Section 151.407.
Acts 1981, 67th Leg., p. 1550, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 2001, 77th Leg., ch. 397, Sec. 1, eff. Sept. 1, 2001.
Sec. 151.053. SALES TAX BRACKETS. (a) If the sales price involves a fraction of a dollar, the sales tax to be added to the sales price shall be computed by multiplying the percentage rate of the sales tax times the amount of the sale. A fraction of one cent that is less than one-half of one cent is not collected and a fraction of one cent that is equal to one-half of one cent or more is collected as one cent of tax.(b) The comptroller may publish schedules and brackets of amounts of taxes based on the formula provided by Subsection (a) of this section for use in the collection of the taxes imposed by this chapter.
Acts 1981, 67th Leg., p. 1550, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 13, Sec. 2, eff. Oct. 2, 1984; Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1, Sec. 2, eff. Jan. 1, 1987; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 3, Sec. 1.
Sec. 151.054. GROSS RECEIPTS PRESUMED SUBJECT TO TAX. (a) Except as provided by Subsection (d) of this section, all gross receipts of a seller are presumed to have been subject to the sales tax unless a properly completed resale or exemption certificate is accepted by the seller.(b) A sale is exempt if the seller receives in good faith from a purchaser, who is in the business of selling, leasing, or renting taxable items, a resale certificate stating that the tangible personal property or service is acquired for the purpose of selling, leasing, or renting it in the regular course of business or for the purpose of transferring it as an integral part of a taxable service performed in the regular course of business.(c) A sale is exempt if the seller receives in good faith from a purchaser an exemption certificate stating qualifications for an exemption provided in Subchapter H of this chapter.(d) A sale of liquor, wine, beer, or malt liquor by the holder of a manufacturer's license, wholesaler's permit, general class B wholesaler's permit, local class B wholesaler's permit, local distributor's permit, or a general, local, or branch distributor's license issued under the Alcoholic Beverage Code to the holder of a retail license or permit issued under the Alcoholic Beverage Code is presumed to be a sale for resale. In a sale to which this section applies, the seller is not required to receive a resale certificate from the purchaser.(e) Properly completed resale or exemption certificates should be in the possession of the seller at the time the nontaxable transaction occurs. If the seller is not in possession of these certificates within 60 days from the date written notice requiring possession of them is given to the seller by the comptroller, deductions claimed by the seller that require delivery of the certificates shall be disallowed. If the seller delivers the certificates to the comptroller within the 60-day period, the comptroller may verify the reason or basis for exemption claimed in the certificates before allowing any deductions. A deduction may not be granted on the basis of certificates delivered to the comptroller after the 60-day period.
Acts 1981, 67th Leg., p. 1550, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 15, Sec. 2, eff. Oct. 2, 1984; Acts 1985, 69th Leg., ch. 206, Sec. 6, eff. Oct. 1, 1985; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 16.
Sec. 151.055. SALES OF ITEMS ACQUIRED FOR LEASE OR RENTAL. (a) If a person purchases tangible personal property by means of a sale for resale for the purpose of renting or leasing the property for use but subsequently sells the property in an occasional sale before the person has collected and paid to the state an amount of sales tax on rental or lease charges equal to the amount of sales tax that would have been due if the person had not acquired the property at a sale for resale, the person at the time of the occasional sale shall include in his receipts from taxable sales the amount by which the purchase price of the item at the occasional sale exceeds the amount received from renting or leasing the property.(b) If tangible personal property is rented or leased under an agreement that provides that all or a portion of the rental or lease payments may be credited against the purchase price of the item, the lessor shall collect the sales tax on the sales price, including the sum of all lease or rental payments for the term of the lease or rental, at the time the purchaser takes possession of the property or when the first payment is due, whichever period is the earlier. If the purchaser-lessee returns the taxable item to the seller-lessor before the end of the lease or rental period without having acquired title to the property, the seller-lessor may take a credit against other taxes due under this chapter or claim a refund as provided by this code for an amount equal to the amount of the taxes paid on the unpaid portion of the sales price.
Acts 1981, 67th Leg., p. 1551, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 9, Sec. 2, eff. Oct. 2, 1984.
Sec. 151.056. PROPERTY CONSUMED IN CONTRACTS TO IMPROVE REAL PROPERTY. (a) A contractor is the consumer of tangible personal property furnished by him and incorporated into the property of his customer if the contract between the contractor and his customer contains a lump-sum price covering both the performance of the service and the furnishing of the necessary incidental material.(b) A contractor is the seller of tangible personal property furnished by him and incorporated into the property of his customer, from whom he shall collect the tax, if the contract between the contractor and his customer contains separate amounts for the performance of the service and for the furnishing of the necessary incidental material. The tax rate is applied to the price of the materials as agreed in the contract or the price of the materials to the contractor, whichever is the greater.(c) If a contractor has paid the sales tax to his supplier when the tangible personal property is purchased, the contractor may credit the amount of the tax paid to the supplier against the tax imposed as provided in Subsection (b) of this section with respect to a subsequent sale of the property.(d) In this section, "contractor" means a person who makes an improvement on real estate and who, as a necessary or incidental part of the service, incorporates tangible personal property into the property improved.(e) This section does not apply to the use or consumption of tangible personal property as a necessary or incidental part of a taxable service.(f) A contractor is not eligible for the exemption provided by Section 151.318 on items used in the performance of a contract to improve real property.(g) In this subsection, "ready mix concrete contractor" means a person who manufactures or produces ready mixed concrete for construction purposes and incorporates the ready mixed concrete in the property improved. A ready mix concrete contractor performing a contract must separate and individually invoice the customer for each yard of ready mixed concrete produced and consumed for the improvement of real property and collect and remit the tax imposed under this chapter on the ready mixed concrete produced and consumed. The tax rate is applied to the price of the materials determined by the greater of the invoice price or fair market value of ready mixed concrete incorporated into the project. This subsection does not apply to an invoice submitted by a ready mix concrete contractor for a public works project.
Acts 1981, 67th Leg., p. 1551, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 17; Acts 2003, 78th Leg., ch. 209, Sec. 18, eff. Oct. 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1266, Sec. 3, eff. September 1, 2007.
Sec. 151.0565. TAXABLE ITEMS SOLD OR PROVIDED UNDER DESTINATION MANAGEMENT SERVICES CONTRACTS. (a) In this section:(1) "Destination management services" means the following services when provided under a qualified destination management services contract:(A) transportation management;(B) booking and managing entertainers;(C) coordination of tours or recreational activities;(D) meeting, conference, or event registration;(E) meeting, conference, or event staffing;(F) event management; and(G) meal coordination.(2) "Qualified destination management company" means a business entity that:(A) is incorporated or is a limited liability company;(B) receives at least 80 percent of the entity's annual total revenue from providing or arranging for the provision of destination management services;(C) maintains a permanent nonresidential office from which the destination management services are provided or arranged;(D) has at least three full-time employees;(E) spends at least one percent of the entity's annual gross receipts to market the destinations with respect to which destination management services are provided;(F) has at least 80 percent of the entity's clients described by Subdivision (3)(A) located outside this state;(G) other than office equipment used in the conduct of the entity's business, does not own equipment used to directly provide destination management services, including motor coaches, limousines, sedans, dance floors, decorative props, lighting, podiums, sound or video equipment, or equipment for catered meals;(H) is not doing business as a caterer;(I) does not provide services for weddings;(J) does not own a venue at which events or activities for which destination management services are provided occur; and(K) is not a subsidiary of another entity that, and is not a member of an affiliated group, as that term is defined by Section 171.0001, another member of which:(i) is doing business as, or owns or operates another entity doing business as, a caterer; or(ii) owns or operates a venue described by Paragraph (J).(3) "Qualified destination management services contract" means a contract under which at least three of the destination management services listed in Subdivision (1) are provided:(A) in this state to a client that is not an individual and that:(i) is a corporation, partnership, limited liability company, trade association, or other business entity, other than a social club or fraternal organization;(ii) has its principal place of business outside the county where the destination management services are to be provided; and(iii) agrees to pay the qualified destination management company for all destination management services provided to the client under the terms of the contract; and(B) by a qualified destination management company that pays or accrues liability for the payment of taxes imposed by this chapter on purchases of taxable items that will be consumed or used by the company in performing the contract.(b) A qualified destination management company is the consumer of taxable items sold or otherwise provided under a qualified destination management services contract, and the destination management services provided under the contract are not considered taxable services, as that term is defined by Section 151.0101.
Added by Acts 2009, 81st Leg., R.S., Ch. 1360, Sec. 2, eff. September 1, 2009.
Sec. 151.057. SERVICES BY EMPLOYEES. The following services are not taxable under this chapter:(1) a service performed by an employee for his employer in the regular course of business, within the scope of the employee's duties, and for which the employee is paid his regular wages or salary;(2) a service performed by an employee of a temporary employment service as defined by Section 93.001, Labor Code, for an employer to supplement the employer's existing work force on a temporary basis, when the service is normally performed by the employer's own employees, the employer provides all supplies and equipment necessary, and the help is under the direct or general supervision of the employer to whom the help is furnished; or(3) a service performed by assigned employees of a staff leasing company, either licensed under Chapter 91, Labor Code, or exempt from the licensing requirements of that chapter, for a client company under a written contract that provides for shared employment responsibilities between the staff leasing company and the client company for the assigned employees, most of whom must have been previously employed by the client company. The comptroller shall prescribe by rule the minimum percentage of assigned employees that must have been previously employed by the client company, the minimum time period the assigned employees must have been employed by the client company prior to the commencement of its contract, and such other criteria as the comptroller may deem necessary to properly implement this section.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, Sec. 9, eff. Oct. 2, 1984. Amended by Acts 1989, 71st Leg., ch. 254, Sec. 1, eff. Oct. 1, 1989; Acts 1997, 75th Leg., ch. 1040, Sec. 18, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 1263, Sec. 14, eff. Oct. 1, 2001.
Sec. 151.058. PROPERTY USED TO PROVIDE TAXABLE SERVICES AND SALE PRICE OF TAXABLE SERVICES. (a) A person performing services taxable under this chapter is the consumer of machinery and equipment used in performing the services.(b) The total amount charged for a service taxable under this chapter is subject to tax, including charges for labor, materials, overhead, and profit, regardless of whether such charges are separately identified to the purchaser of the service.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 18. Amended by Acts 1993, 73rd Leg., ch. 1031, Sec. 20, eff. Sept. 1, 1993.
Sec. 151.059. FEE IMPOSED IN LIEU OF LOCAL SALES AND USE TAXES. Section effective contingent upon federal legislation as provided in Acts 1989, 71st Leg., ch. 291, Sec. 5. (a) A nonresident of this state who is required pursuant to federal law to collect sales or use tax under this chapter may elect to pay a fee to the comptroller in lieu of all local sales and use taxes authorized or governed by Title 3 of this code.(b) A person eligible under federal law may elect to pay the fee imposed by this section by written notification to the comptroller. Such notification must be made within 90 days of the date of the first sale on which tax is required to be collected or within such other period as the comptroller may by rule require. The comptroller may require that a notification under this section be made on a form prescribed by the comptroller and contain any information relevant to the collection of taxes under this chapter. A person who does not elect to pay the fee imposed by this section shall collect and remit all applicable state and local sales and use tax imposed under the laws of this state in the same manner as a resident of this state.(c) Unless another rate is required by federal law, the fee imposed under this section shall be the weighted average rate of local sales and use tax collected in this state during the preceding state fiscal year, applied to the total amount subject to sales and use tax imposed by this chapter. The rate shall be determined by the comptroller as soon as practicable following the end of each state fiscal year and shall be effective beginning on January 1 following the end of that state fiscal year. The weighted average rate of local sales and use tax shall be computed by:(1) dividing the aggregate amount of all local sales and use taxes paid in the state by the aggregate amount of all sales and uses to which:(A) the state sales and use tax applies; and(B) local jurisdictions have the power to impose a local sales or use tax; and(2) rounding that result to the nearest .0025.(d) A fee imposed under this section is subject to the provisions of Subtitle B of Title 2 of this code in the same manner as a tax imposed under this chapter.(e) The fee imposed by this chapter shall be remitted quarterly in a manner prescribed by the comptroller, subject to the limitations of applicable federal law, and shall be apportioned and distributed as required by Section 403.107, Government Code.(f) Nothing in this section shall be construed to apply to nonresident persons whose activities would subject them to a duty to pay, collect, or remit a sales or use tax under this chapter or Title 3 of this code in the absence of federal legislation.
Added by Acts 1989, 71st Leg., ch. 291, Sec. 3.
Sec. 151.060. PROPERTY CONSUMED IN REPAIR OF MOTOR VEHICLE. (a) Except as provided by Subsection (b), a person who repairs a motor vehicle is the seller of all tangible personal property consumed in providing that service except electricity and gas, and shall collect the tax due under this chapter from the customer.(b) A person who repairs a motor vehicle is the consumer of all tangible personal property consumed in providing that service if the contract between the person and the customer contains a lump-sum price covering both the performance of the service and the furnishing of the consumed tangible personal property.(c) In this section, tangible personal property is considered consumed if it can no longer be used for its intended purposes in the normal course of business or is not retained or reusable by the person providing the repair service.
Added by Acts 1991, 72nd Leg., ch. 378, Sec. 1, eff. Oct. 1, 1991.
Sec. 151.061. SOURCING OF CHARGES FOR MOBILE TELECOMMUNICATIONS SERVICES. (a) In this section:(1) "Home service provider" means the facilities-based carrier or reseller with which the customer contracts for the provi
TAX CODETITLE 2. STATE TAXATIONSUBTITLE E. SALES, EXCISE, AND USE TAXESCHAPTER 151. LIMITED SALES, EXCISE, AND USE TAXSUBCHAPTER A. GENERAL PROVISIONSSec. 151.001. SHORT TITLE. This chapter may be cited as the Limited Sales, Excise, and Use Tax Act.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.002. APPLICABILITY OF DEFINITIONS, ETC. The definitions and other provisions of this chapter relating to the collection, administration, and enforcement of the taxes imposed by this chapter, including the requirements for sales tax permits, apply to the parties to a sale of a taxable item that is exempted from the taxes imposed by this chapter but that is subject to the taxes imposed by a city under Chapter 321 of this code.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.27(b)(1), eff. Aug. 28, 1989.
Sec. 151.0028. "AMUSEMENT SERVICES". (a) "Amusement services" means the provision of amusement, entertainment, or recreation, but does not include the provision of educational or health services if prescribed by a licensed practitioner of the healing arts for the primary purpose of education or health maintenance or improvement.(b) "Amusement services" includes membership in a private club or organization that provides entertainment, recreational, sports, dining, or social facilities to its members.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 3, eff. Oct. 2, 1984. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 1.
Sec. 151.003. "BUSINESS". "Business" means an activity of or caused by a person for the purpose of a direct or indirect gain, benefit, or advantage.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.0031. "COMPUTER PROGRAM". "Computer program" means a series of instructions that are coded for acceptance or use by a computer system and that are designed to permit the computer system to process data and provide results and information. The series of instructions may be contained in or on magnetic tapes, punched cards, printed instructions, or other tangible or electronic media.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, Sec. 1, eff. Oct. 2, 1984.
Sec. 151.0033. "CABLE TELEVISION SERVICE". "Cable television service" means the distribution of video programming with or without use of wires to subscribing or paying customers.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 4, eff. Oct. 2, 1984.
Sec. 151.0034. "CREDIT REPORTING SERVICE". "Credit reporting service" means assembling or furnishing credit history or credit information relating to any person.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 2.
Sec. 151.0035. "DATA PROCESSING SERVICE". "Data processing service" includes word processing, data entry, data retrieval, data search, information compilation, payroll and business accounting data production, the performance of a totalisator service with the use of computational equipment required by the Texas Racing Act (Article 179e, Vernon's Texas Civil Statutes), and other computerized data and information storage or manipulation. "Data processing service" also includes the use of a computer or computer time for data processing whether the processing is performed by the provider of the computer or computer time or by the purchaser or other beneficiary of the service. "Data processing service" does not include the transcription of medical dictation by a medical transcriptionist. "Data storage," as used in this section, does not include a classified advertisement, banner advertisement, vertical advertisement, or link when the item is displayed on an Internet website owned by another person.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 3. Amended by Acts 1997, 75th Leg., ch. 1275, Sec. 53, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1040, Sec. 11, eff. Sept. 1, 1997; Acts 2003, 78th Leg., ch. 209, Sec. 16, eff. Oct. 1, 2003.
Sec. 151.0036. "DEBT COLLECTION SERVICE". (a) "Debt collection service" means activity to collect or adjust a delinquent debt, to collect or adjust a claim, or to repossess property subject to a claim.(b) "Debt collection service" does not include:(1) the collection of:(A) a judgment by an attorney or by a partnership or professional corporation of attorneys if the attorney, partnership, or corporation represented the person in the suit from which the judgment arose; or(B) court-ordered child support or medical child support; or(2) a service provided by a person acting as a trustee in connection with the foreclosure sale of real property under a lien created by a mortgage, deed of trust, or security instrument.(c) "Debt collection service" includes the service performed for which a fee is collected under Section 3.506, Business & Commerce Code. The person collecting the check shall add the amount of the tax to the fee in accordance with Section 151.052 and shall collect the fee from the drawer or endorser of the check.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 4. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 9, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 341, Sec. 3.06, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1000, Sec. 5, eff. Oct. 1, 1995; Acts 2001, 77th Leg., ch. 1151, Sec. 1, 2(b), eff. July 1, 2001; Acts 2001, 77th Leg., ch. 1420, Sec. 2.001(d), eff. Sept. 1, 2001.
Sec. 151.0038. "INFORMATION SERVICE". (a) "Information service" means:(1) furnishing general or specialized news or other current information, including financial information, unless furnished to:(A) a newspaper or to a radio or television station licensed by the Federal Communications Commission; or(B) a member of a homeowners association of a residential subdivision or condominium development, and is furnished by the association or on behalf of the association; or(2) electronic data retrieval or research.(b) In this section, "newspaper" has the meaning assigned by Section 151.319(f).
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 5. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 10, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 6, eff. Oct. 1, 1995.
Sec. 151.0039. "INSURANCE SERVICE". (a) "Insurance service" means insurance loss or damage appraisal, insurance inspection, insurance investigation, insurance actuarial analysis or research, insurance claims adjustment or claims processing, or insurance loss prevention service.(b) "Insurance service" does not include insurance coverage for which a premium is paid or commissions paid to insurance agents for the sale of insurance or annuities.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 6.
Sec. 151.00393. INTERNET. "Internet" means collectively the myriad of computer and telecommunications facilities, including equipment and operating software, that comprise the interconnected worldwide network of networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor or successor protocols to the protocol, to communicate information of all kinds by wire or radio.
Added by Acts 1999, 76th Leg., ch. 394, Sec. 1, eff. Oct. 1, 1999.
Sec. 151.00394. INTERNET ACCESS SERVICE. (a) "Internet access service" means a service that enables users to access content, information, electronic mail, or other services offered over the Internet and may also include access to proprietary content, information, and other services as part of a package of services offered to consumers. The term does not include telecommunications services.(b) "Internet access service" does not include and the exemption under Section 151.325 does not apply to any other taxable service listed in Section 151.0101(a), unless the taxable service is provided in conjunction with and is merely incidental to the provision of Internet access service.(c) On and after October 1, 1999, "Internet access service" is not included in the definitions of "data processing service" and "information service."
Added by Acts 1999, 76th Leg., ch. 394, Sec. 1, eff. Oct. 1, 1999.
Sec. 151.004. "IN THIS STATE". "In this state" means within the exterior limits of Texas and includes all territory within these limits ceded to or owned by the United States.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.0045. "PERSONAL SERVICES". "Personal services" means those personal services listed as personal services under Group 721, Major Group 72 of the Standard Industrial Classification Manual, 1972, and includes massage parlors, escort services, and Turkish baths under Group 729 of said manual but does not include any other services listed under Group 729 unless otherwise covered under this Act, prepared by the statistical policy division of the office on management and budget, office of the president of the United States.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 5, eff. Oct. 2, 1984.
Sec. 151.0047. "REAL PROPERTY REPAIR AND REMODELING". (a) "Real property repair and remodeling" means the repair, restoration, remodeling, or modification of an improvement to real property other than:(1) a structure or separate part of a structure used as a residence;(2) an improvement immediately adjacent to a structure described by Subdivision (1) of this section and used in the residential occupancy of the structure or separate part of the structure by the person using the structure or part as a residence; or(3) an improvement to a manufacturing or processing production unit in a petrochemical refinery or chemical plant that provides increased capacity in the production unit.(b) In this section:(1) "Increased capacity" means the capability to produce:(A) additional products or services as measured by units per hour or units per year; or(B) a new product or service.(2) "Production unit" means a group of manufacturing and processing machines and ancillary equipment that together are necessary to create or produce a physical or chemical change beginning with the first processing of the raw material and ending with the finished product.(3) "New product" means a product that:(A) has different product properties and a different commercial application than the product previously manufactured or processed by the production unit that produced the previous product; and(B) is not created by straining or purifying an existing product or by making cosmetic changes, such as adding or removing color or odor, to or from an existing product.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 7. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 11, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 7, eff. Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1040, Sec. 12, eff. Sept. 1, 1997.
Sec. 151.0048. REAL PROPERTY SERVICE. (a) Except as provided by Subsection (b), "real property service" means:(1) landscaping;(2) the care and maintenance of lawns, yards, or ornamental trees or other plants;(3) the removal or collection of garbage, rubbish, or other solid waste other than:(A) hazardous waste;(B) industrial solid waste;(C) waste material that results from an activity associated with the exploration, development, or production of oil, gas, geothermal resources, or any other substance or material regulated by the Railroad Commission of Texas under Section 91.101, Natural Resources Code;(D) domestic sewage or an irrigation return flow, to the extent the sewage or return flow does not constitute garbage or rubbish; and(E) industrial discharges subject to regulation by permit issued pursuant to Chapter 26, Water Code;(4) building or grounds cleaning, janitorial, or custodial services;(5) a structural pest control service covered by Section 1951.003, Occupations Code; or(6) the surveying of real property.(b) "Real property service" does not include a service listed under Subsection (a) if the service is purchased by a contractor as part of the improvement of real property with a new structure to be used as a residence or other improvement immediately adjacent to the new structure and used in the residential occupancy of the structure.(b-1) "Real property service" does not include a service listed under Subsection (a) if the service is performed by a landman and is necessary to negotiate or secure land or mineral rights for acquisition or trade, including:(1) determining ownership;(2) negotiating a trade or agreement regarding land or mineral rights;(3) drafting and administering contractual agreements;(4) ensuring that all governmental regulations are complied with; and(5) any other action necessary to complete the transaction related to a service described by this subsection, other than an information service described by Section 151.0038.(c) In this section, "contractor" means a person who makes an improvement on real estate and who, as a necessary or incidental part of the service, incorporates tangible personal property into the property improved. The term includes a builder, developer, speculative builder, or other person acting as a builder to improve residential real property.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 8. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 12, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 1031, Sec. 19, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 1000, Sec. 7, eff. Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1040, Sec. 13, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1114, Sec. 1.01, eff. Oct. 1, 1999; Acts 1999, 76th Leg., ch. 1114, Sec. 2.01, eff. Oct. 1, 2001; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.815, eff. Sept. 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1266, Sec. 1, eff. September 1, 2007.
Sec. 151.005. "SALE" OR "PURCHASE". "Sale" or "purchase" means any of the following when done or performed for consideration:(1) a transfer of title or possession of tangible personal property;(2) the exchange, barter, lease, or rental of tangible personal property;(3) the performance of a taxable service, the charge for an extended warranty or service contract for the performance of a taxable service, or, in the case of an amusement service, a transfer of title to or possession of a ticket or other admission document, the collection of an admission fee, whether by individual performance, subscription series, or membership privilege, the collection of dues or a fee, charge, or assessment, including an initiation fee, by a club or organization for membership or a special privilege, status, or membership classification in the club or organization, or the use of a coin-operated machine;(4) the production, fabrication, processing, printing, or imprinting of tangible personal property for consumers who directly or indirectly furnish the materials used in the production, fabrication, processing, printing, or imprinting;(5) the furnishing and distribution of tangible personal property by a social club or fraternal organization to anyone;(6) the furnishing, preparation, or service of food, meals, or drinks;(7) a transfer of the possession of tangible personal property if the title to the property is retained by the seller as security for the payment of the price; or(8) a transfer of the title or possession of tangible personal property that has been produced, fabricated, or printed to the special order of the customer.
Acts 1981, 67th Leg., p. 1545, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 6, eff. Oct. 2, 1984; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 15; Acts 2003, 78th Leg., ch. 209, Sec. 17, eff. Oct. 1, 2003.
Sec. 151.006. "SALE FOR RESALE." (a) "Sale for resale" means a sale of:(1) tangible personal property or a taxable service to a purchaser who acquires the property or service for the purpose of reselling it in the United States of America or a possession or territory of the United States of America or in the United Mexican States in the normal course of business in the form or condition in which it is acquired or as an attachment to or integral part of other tangible personal property or taxable service;(2) tangible personal property to a purchaser for the sole purpose of the purchaser's leasing or renting it in the United States of America or a possession or territory of the United States of America or in the United Mexican States in the normal course of business to another person, but not if incidental to the leasing or renting of real estate;(3) tangible personal property to a purchaser who acquires the property for the purpose of transferring it in the United States of America or a possession or territory of the United States of America or in the United Mexican States as an integral part of a taxable service; or(4) a taxable service performed on tangible personal property that is held for sale by the purchaser of the taxable service.(b) Subsection (a)(3) applies to a transfer of a wireless voice communication device as an integral part of a taxable service, regardless of whether there is a separate charge for the wireless voice communication device or whether the purchaser is the provider of the taxable service, if payment for the service is a condition for receiving the wireless voice communication device.
Acts 1981, 67th Leg., p. 1546, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 7, eff. Oct. 2, 1984; Acts 1995, 74th Leg., ch. 351, Sec. 1, eff. Sept. 1, 1995.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1266, Sec. 2, eff. September 1, 2007.
Sec. 151.007. "SALES PRICE" OR "RECEIPTS". (a) Except as provided by Subsections (c) and (d), "sales price" or "receipts" means the total amount for which a taxable item is sold, leased, or rented, valued in money, without a deduction for the cost of:(1) the taxable item sold, leased, or rented;(2) the materials used, labor or service employed, interest, losses, or other expenses;(3) the transportation or installation of tangible personal property; or(4) transportation incident to the performance of a taxable service.(b) The total amount for which a taxable item is sold, leased, or rented includes a service that is a part of the sale and the amount of credit given to the purchaser by the seller.(c) "Sales price" or "receipts" does not include any of the following if separately identified to the customer by such means as an invoice, billing, sales slip or ticket, or contract:(1) a cash discount allowed on the sale;(2) the amount charged for tangible personal property returned by a customer if the total amount charged is refunded by cash or credit;(3) a refund of the charges for the performance of a taxable service;(4) finance, carrying and service charges, or interest from credit extended on sales of taxable items under a conditional sales contract or other contract providing for the deferred payment of the purchase price;(5) the value of tangible personal property that:(A) is taken by a seller in trade as all or part of the consideration for a sale of a taxable item; and(B) is of a type of property sold by the seller in the regular course of business;(6) the face value of United States coin or currency in a sale of that coin or currency in which the total consideration given by the purchaser exceeds the face value of the coin or currency; or(7) a voluntary gratuity or a reasonable mandatory charge for the service of a meal or food products, including soft drinks and candy, for immediate human consumption when the service charge is separated from the sales price of the meal or food product and identified as a gratuity or tip and when the total amount of the service charge is disbursed by the employer to employees who customarily and regularly provide the service.(d) "Sales price" or "receipts" of items sold as edible products for human consumption through the use or operation of a money-operated vending machine is 50 percent of the total gross receipts of the vendor from sales of those items, except for sales of soft drinks and candy, for which the "sales price" or "receipts" are the total gross receipts from those sales.(e) The sales price of membership in a private club or organization consists of the dues, fees, and other charges and assessments, including initiation fees, required for membership or a special privilege, status, or membership classification in the club or organization.
Acts 1981, 67th Leg., p. 1546, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 8, eff. Oct. 2, 1984; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 9; Acts 1997, 75th Leg., ch. 1040, Sec. 14, eff. Oct. 1, 1997; Acts 2001, 77th Leg., ch. 1263, Sec. 12, eff. Oct. 1, 2001.
Sec. 151.0075. "SECURITY SERVICE". "Security service" means service for which a license is required under Section 1702.101 or 1702.102, Occupations Code.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 10. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 14.837, eff. Sept. 1, 2001.
Sec. 151.008. "SELLER" OR "RETAILER". (a) "Seller" or "retailer" means a person engaged in the business of making sales of taxable items of a kind the receipts from the sale of which are included in the measure of the sales or use tax imposed by this chapter.(b) "Seller" and "retailer" include:(1) a person in the business of making sales at auction of tangible personal property owned by the person or by another;(2) a person who makes more than two sales of taxable items during a 12-month period, including sales made in the capacity of an assignee for the benefit of creditors or receiver or trustee in bankruptcy;(3) a person regarded by the comptroller as a seller or retailer under Section 151.024 of this code;(4) a hotel, motel, or owner or lessor of an office or residential building or development that contracts and pays for telecommunications services for resale to guests or tenants; and(5) a person who engages 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.
Acts 1981, 67th Leg., p. 1547, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1985, 69th Leg., ch. 206, Sec. 2, eff. Oct. 1, 1985; Acts 1991, 72nd Leg., 1st C.S., ch. 5, Sec. 14.13.
Sec. 151.009. "TANGIBLE PERSONAL PROPERTY". "Tangible personal property" means personal property that can be seen, weighed, measured, felt, or touched or that is perceptible to the senses in any other manner, and, for the purposes of this chapter, the term includes a computer program and a telephone prepaid calling card.
Acts 1981, 67th Leg., p. 1547, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, Sec. 2, eff. Oct. 2, 1984; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 11; Acts 1997, 75th Leg., ch. 1040, Sec. 16, eff. Sept. 1, 1997.
Sec. 151.010. TAXABLE ITEM. "Taxable item" means tangible personal property and taxable services. Except as otherwise provided by this chapter, the sale or use of a taxable item in electronic form instead of on physical media does not alter the item's tax status.
Acts 1981, 67th Leg., p. 1547, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 1, eff. Oct. 2, 1984; Acts 2001, 77th Leg., ch. 1263, Sec. 13, eff. Oct. 1, 2001.
Sec. 151.0101. "TAXABLE SERVICES". (a) "Taxable services" means:(1) amusement services;(2) cable television services;(3) personal services;(4) motor vehicle parking and storage services;(5) the repair, remodeling, maintenance, and restoration of tangible personal property, except:(A) aircraft;(B) a ship, boat, or other vessel, other than:(i) a taxable boat or motor as defined by Section 160.001;(ii) a sports fishing boat; or(iii) any other vessel used for pleasure;(C) the repair, maintenance, and restoration of a motor vehicle; and(D) the repair, maintenance, creation, and restoration of a computer program, including its development and modification, not sold by the person performing the repair, maintenance, creation, or restoration service;(6) telecommunications services;(7) credit reporting services;(8) debt collection services;(9) insurance services;(10) information services;(11) real property services;(12) data processing services;(13) real property repair and remodeling;(14) security services;(15) telephone answering services;(16) Internet access service; and(17) a sale by a transmission and distribution utility, as defined in Section 31.002, Utilities Code, of transmission or delivery of service directly to an electricity end-use customer whose consumption of electricity is subject to taxation under this chapter.(b) The comptroller shall have exclusive jurisdiction to interpret Subsection (a) of this section.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 2, eff. Oct. 2, 1984. Amended by Acts 1985, 69th Leg., ch. 206, Sec. 3, eff. Oct. 1, 1985; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 12; Acts 1989, 71st Leg., ch. 1249, Sec. 1, eff. Oct. 1, 1989; Acts 1991, 72nd Leg., 1st C.S., ch. 5, Sec. 14.021(a); Acts 1999, 76th Leg., ch. 394, Sec. 2, eff. Oct. 1, 1999; Acts 1999, 76th Leg., ch. 405, Sec. 54, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1420, Sec. 18.008, eff. Sept. 1, 2001.
Sec. 151.0102. "TELEPHONE ANSWERING SERVICES". "Telephone answering services" means the receiving and relaying of telephone messages by a human operator. The term does not include the automated receiving and relaying of telephone messages included within the definition of "telecommunications services" under Section 151.0103.
Added by Acts 1991, 72nd Leg., 1st C.S., ch. 5, Sec. 14.031.
Sec. 151.0103. TELECOMMUNICATIONS SERVICES. (a) For the purposes of this title only, "telecommunications services" means the electronic or electrical transmission, conveyance, routing, or reception of sounds, signals, data, or information utilizing wires, cable, radio waves, microwaves, satellites, fiber optics, or any other method now in existence or that may be devised, including but not limited to long-distance telephone service. The term does not include:(1) the storage of data or information for subsequent retrieval or the processing, or reception and processing, of data or information intended to change its form or content;(2) the sale or use of a telephone prepaid calling card;(3) Internet access service; or(4) a pay telephone coin sent-paid telephone call.(b) The exemption provided by Subsection (a)(4) applies only to the portion of the sales price of the telecommunications service that is paid by coin.
Added by Acts 1985, 69th Leg., ch. 206, Sec. 4, eff. Oct. 1, 1985. Amended by Acts 1997, 75th Leg., ch. 1040, Sec. 17, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 394, Sec. 3, eff. Oct. 1, 1999.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1199, Sec. 1, eff. September 1, 2007.
Sec. 151.01032. "TELEPHONE PREPAID CALLING CARD". "Telephone prepaid calling card" means a card or other item, including an access code, that represents the right to make one or more telephone calls for which payment is made in incremental amounts and before the call is initiated. The term "telephone prepaid calling card" does not include a card sold by mechanical means for consideration of one dollar or less.
Added by Acts 1997, 75th Leg., ch. 1040, Sec. 15, eff. Sept. 1, 1997.
Sec. 151.0104. TELEPHONE COMPANY. For the purposes of this chapter, "telephone company" means a person that owns or operates a telephone line or telephone in this state and charges for its use.
Added by Acts 1985, 69th Leg., ch. 206, Sec. 4, eff. Oct. 1, 1985. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 13.
Sec. 151.011. "USE" AND "STORAGE". (a) Except as provided by Subsection (c) of this section, "use" means the exercise of a right or power incidental to the ownership of tangible personal property over tangible personal property, including tangible personal property other than printed material that has been processed, fabricated, or manufactured into other property or attached to or incorporated into other property transported into this state, and, except as provided by Section 151.056(b) of this code, includes the incorporation of tangible personal property into real estate or into improvements of real estate whether or not the real estate is subsequently sold.(b) With respect to a taxable service, "use" means the derivation in this state of direct or indirect benefit from the service.(c) "Use" does not include the sale of tangible personal property or a taxable service in the regular course of business, the transfer of a taxable service as an integral part of the transfer of tangible personal property in the regular course of business, or the transfer of tangible personal property as an integral part of the transfer of a taxable service in the regular course of business.(d) Except as provided by Subsection (e) of this section, "storage" means the keeping or retaining for any purpose in this state of tangible personal property sold by a retailer.(e) "Storage" does not include the keeping or retaining of tangible personal property for sale in the regular course of business.(f) Neither "use" nor "storage" includes the exercise of a right or power over or the keeping or retaining of tangible personal property for the purpose of:(1) transporting the property outside the state for use solely outside the state; or(2) processing, fabricating, or manufacturing the property into other property or attaching the property to or incorporating the property into other property to be transported outside the state for use solely outside the state.
Acts 1981, 67th Leg., p. 1547, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 14; Acts 1989, 71st Leg., ch. 323, Sec. 1, eff. Oct. 1, 1989; Acts 2003, 78th Leg., ch. 1310, Sec. 97, eff. Oct. 1, 2003.
Sec. 151.012. EFFECTIVE DATE OF TAX RATE CHANGES. (a) A change in the rate of the tax imposed under Sections 151.051 and 151.101 must take effect on the first day of a calendar quarter.(b) If the performance of a taxable service begins before the effective date of a change in the tax rate and the performance will not be completed until after that effective date, the change in the tax rate applies to the first billing period for the service performed on or after that effective date.
Added by Acts 2003, 78th Leg., ch. 1310, Sec. 98, eff. Oct. 1, 2003.
SUBCHAPTER B. ADMINISTRATION AND RECORDSSec. 151.021. EMPLOYEES. The comptroller may employ accountants, auditors, investigators, assistants, and clerks for the administration of this chapter and may delegate to employees the authority to conduct hearings, prescribe rules, and perform other duties required by this chapter.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.022. RETROACTIVE EFFECT OF RULES. The comptroller may prescribe the extent to which a rule or ruling shall be applied without retroactive effect.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.023. INVESTIGATIONS AND AUDITS. (a) The comptroller, or another person authorized by the comptroller in writing, may examine, copy, and photograph the books, records, papers, and equipment of a person who sells taxable items or of a person liable for the use tax and may investigate the character of the business of the person to verify the accuracy of the person's report or to determine the amount of tax that may be required to be paid if no report has been filed.(b) For the purpose of determining the amount of tax collected and payable to the state, the amount of tax accruing and due, and whether a tax liability has been incurred under this chapter, the comptroller or a person authorized by the comptroller may:(1) inspect at any time during business hours any business premises where a taxable event has occurred and examine, copy, and photograph the books, returns, records, papers, and equipment relating to the conduct in question; and(2) require by delivery of written notice to the taxpayer or to an employee, representative, or agent of the taxpayer that, not later than the 10th working day after the date the notice is delivered, the taxpayer produce to an agent or designated representative of the comptroller for inspection the books, records, papers, and returns relating to the taxable activity stated in the notice.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 2001, 77th Leg., ch. 442, Sec. 9, eff. Sept. 1, 2001.
Sec. 151.0231. MANAGED AUDITS. (a) In this section, "managed audit" means a review and analysis of invoices, checks, accounting records, or other documents or information to determine a taxpayer's liability for tax under this chapter.(b) A managed audit may be limited to certain categories of liability under this chapter, including tax on:(1) sales of one or more types of taxable items;(2) purchases of assets;(3) purchases of expense items;(4) purchases under a direct payment permit; or(5) any other category specified in an agreement authorized by this section.(c) The comptroller may, in a written agreement, authorize a taxpayer to conduct a managed audit under this section. The agreement must:(1) be signed by an authorized representative of the comptroller and the taxpayer; and(2) specify the period to be audited and the procedure to be followed.(d) In determining whether to authorize a managed audit, the comptroller may consider, in addition to other factors the comptroller considers relevant:(1) the taxpayer's history of tax compliance;(2) the amount of time and resources the taxpayer has available to dedicate to the audit;(3) the extent and availability of the taxpayer's records; and(4) the taxpayer's ability to pay any expected liability.(e) The decision to authorize or not authorize a managed audit rests solely with the comptroller.(f) The comptroller may examine records and perform reviews that the comptroller determines are necessary before the audit is finalized to verify the results of the audit.(g) Unless the audit or information reviewed by the comptroller under Subsection (f) discloses fraud or wilful evasion of the tax, the comptroller may not assess a penalty and may waive all or part of the interest that would otherwise accrue on any amount identified to be due in a managed audit. This subsection does not apply to any amount collected by the taxpayer that was a tax or represented to be a tax but that was not remitted to this state.(h) Except as provided by Section 111.104(f), the taxpayer is entitled to a refund of any tax overpayment disclosed by a managed audit under this section.
Added by Acts 1999, 76th Leg., ch. 457, Sec. 1, eff. Oct. 1, 1999.
Sec. 151.024. PERSONS WHO MAY BE REGARDED AS RETAILERS. If the comptroller determines that it is necessary for the efficient administration of this chapter to regard a salesman, representative, peddler, or canvasser as the agent of a dealer, distributor, supervisor, or employer under whom he operates or from whom he obtains the tangible personal property that he sells, whether or not the sale is made in his own behalf or for the dealer, distributor, supervisor, or employer, the comptroller may so regard the salesman, representative, peddler, or canvasser, and may regard the dealer, distributor, supervisor, or employer as a retailer or seller for the purpose of this chapter.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.025. RECORDS REQUIRED TO BE KEPT. (a) All sellers and all other persons storing, using, or consuming in this state a taxable item purchased from a retailer shall keep the following records in the form the comptroller requires:(1) records of gross receipts, including documentation in the form of receipts, shipping manifests, invoices, and other pertinent papers, from each rental, lease, taxable service, and taxable labor transaction occurring during each reporting period;(2) records in the form of receipts, shipping manifests, invoices, and other pertinent papers of all purchases of taxable items from every source made during each reporting period; and(3) records in the form of receipts, shipping manifests, invoices, and other pertinent papers that substantiate each claimed deduction or exclusion authorized by law.(b) A record required by Subsection (a) of this section shall be kept for not less than four years from the day that it is made unless the comptroller authorizes its destruction at an earlier date.(c) Repealed by Acts 2003, 78th Leg., ch. 1310, Sec. 121(26) and Acts 2003, 78th Leg., ch. 209, Sec. 86(b).(d) If any nontaxable charges are combined with and not separately stated from taxable telecommunications service charges on the customer bill or invoice of a provider of telecommunications services, the combined charge is subject to tax unless the provider can identify the portion of the charges that are nontaxable through the provider's books and records kept in the regular course of business. If the nontaxable charges cannot reasonably be identified, the charges from the sale of both nontaxable services and taxable telecommunications services are attributable to taxable telecommunications services. The provider of telecommunications services has the burden of proving nontaxable charges.
Acts 1981, 67th Leg., p. 1548, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1985, 69th Leg., ch. 206, Sec. 5, eff. Oct. 1, 1985; Acts 2001, 77th Leg., ch. 442, Sec. 10, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1310, Sec. 99, 121(26), eff. July 1, 2003; Acts 2003, 78th Leg., ch. 209, Sec. 86(a), (b), eff. Oct. 1, 2003.
Sec. 151.026. OUT-OF-STATE RECORDS. A taxpayer is entitled to keep or store the taxpayer's records outside this state. If the comptroller requests to examine a record kept or stored outside this state, the taxpayer shall bring the record into this state for the examination or permit the comptroller to examine the record at the out-of-state location.
Acts 1981, 67th Leg., p. 1549, ch. 389, Sec. 1, eff. Jan. 1, 1982.
Sec. 151.027. CONFIDENTIALITY OF TAX INFORMATION. (a) Information in or derived from a record, report, or other instrument required to be furnished under this chapter is confidential and not open to public inspection, except for information set forth in a lien filed under this title or a permit issued under this chapter to a seller and except as provided by Subsection (c) of this section.(b) Information secured, derived, or obtained during the course of an examination of a taxpayer's books, records, papers, officers, or employees, including the business affairs, operations, profits, losses, and expenditures of the taxpayer, is confidential and not open to public inspection except as provided by Subsection (c) of this section.(c) This section does not prohibit:(1) the examination of information, if authorized by the comptroller, by another state officer or law enforcement officer, by a tax official of another state, by a tax official of the United Mexican States, or by an official of the United States if a reciprocal agreement exists;(2) the delivery to a taxpayer, or a taxpayer's authorized representative, of a copy of a report or other paper filed by the taxpayer under this chapter;(3) the publication of statistics classified to prevent the identification of a particular report or items in a particular report;(4) the use of records, reports, or information secured, derived, or obtained by the attorney general or the comptroller in an action under this chapter against the same taxpayer who furnished the information;(5) the delivery to a successor, receiver, executor, administrator, assignee, or guarantor of a taxpayer of information about items included in the measure and amounts of any unpaid tax or amounts of tax, penalties, and interest required to be collected;(6) the delivery of information to a municipality, county, or other local governmental entity in accordance with Section 321.3022, 322.2022, or 323.3022; or(7) the release of information in or derived from a record, report, or other instrument required to be furnished under this chapter by a governmental body, as that term is defined in Section 552.003, Government Code.
Acts 1981, 67th Leg., p. 1549, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1995, 74th Leg., ch. 351, Sec. 3, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1000, Sec. 69, eff. Oct. 1, 1995; Acts 1999, 76th Leg., ch. 1218, Sec. 3, eff. Sept. 1, 1999.Amended by: Acts 2009, 81st Leg., R.S., Ch. 1360, Sec. 1, eff. September 1, 2009.
Sec. 151.029. REMEDIES NOT EXCLUSIVE. An action taken by the comptroller or the attorney general under this chapter is not an election to pursue one remedy to the exclusion of any other remedy authorized by this chapter.
Acts 1981, 67th Leg., p. 1549, ch. 389, Sec. 1, eff. Jan. 1, 1982.
SUBCHAPTER C. IMPOSITION AND COLLECTION OF SALES TAXSec. 151.051. SALES TAX IMPOSED. (a) A tax is imposed on each sale of a taxable item in this state.(b) The sales tax rate is 6-1/4 percent of the sales price of the taxable item sold.
Added by Acts 1981, 67th Leg., p. 1550, ch. 389, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 13, Sec. 1, eff. Oct. 2, 1984; Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1, Sec. 1, eff. Jan. 1, 1987; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 1, Sec. 1; Acts 1990, 71st Leg., 6th C.S., ch. 5, Sec. 1.01, eff. July 1, 1990.
For expiration of this section, see Subsection (d).Sec. 151.0515. TEXAS EMISSIONS REDUCTION PLAN SURCHARGE. (a) In this section, "equipment" includes all off-road, heavy-duty diesel equipment, other than implements of husbandry used solely for agricultural purposes, including:(1) pavers;(2) tampers/rammers;(3) plate compactors;(4) concrete pavers;(5) rollers;(6) scrapers;(7) paving equipment;(8) surface equipment;(9) signal boards/light plants;(10) trenchers;(11) bore/drill rigs;(12) excavators;(13) concrete/industrial saws;(14) cement and mortar mixers;(15) cranes;(16) graders;(17) off-highway trucks;(18) crushing/processing equipment;(19) rough terrain forklifts;(20) rubber tire loaders;(21) rubber tire tractors/dozers;(22) tractors/loaders/backhoes;(23) crawler tractors/dozers;(24) skid steer loaders;(25) off-highway tractors;(26) Dumpsters/tenders; and(27) mining equipment.(b) In each county in this state, a surcharge is imposed on the retail sale, lease, or rental of new or used equipment in an amount equal to two percent of the sale price or the lease or rental amount.(b-1) In each county in this state, a surcharge is imposed on the storage, use, or other consumption in this state of new or used equipment. The surcharge is at the same percentage rate as is provided by Subsection (b) on the sales price or the lease or rental amount of the equipment.(c) The surcharge shall be collected at the same time and in the same manner and shall be administered and enforced in the same manner as the tax imposed under this chapter. The comptroller shall adopt any additional procedures needed for the collection, administration, and enforcement of the surcharge authorized by this section and shall deposit all remitted surcharges to the credit of the Texas emissions reduction plan fund.(d) This section expires August 31, 2019.
Added by Acts 2001, 77th Leg., ch. 967, Sec. 2, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 1331, Sec. 21, eff. July 1, 2003.Amended by: Acts 2005, 79th Leg., Ch. 1125, Sec. 17, eff. September 1, 2005.Acts 2007, 80th Leg., R.S., Ch. 262, Sec. 2.13, eff. June 8, 2007.Acts 2009, 81st Leg., R.S., Ch. 1125, Sec. 18, eff. September 1, 2009.
Sec. 151.052. COLLECTION BY RETAILER. (a) Except as provided by Subsection (d), a seller who makes a sale subject to the sales tax imposed by this chapter shall add the amount of the tax to the sales price, and when the amount of the tax is added:(1) it becomes a part of the sales price;(2) it is a debt of the purchaser to the seller until paid; and(3) if unpaid, it is recoverable at law in the same manner as the original sales price.(b) The owner or former owner of tangible personal property, a factor of the owner or former owner, or an agent of the owner, former owner, or factor shall collect the sales tax and add the amount of the tax to the sales price of the tangible personal property if the person delivers the property to a consumer in this state or to another person for redelivery to a consumer in this state under a sale of the property that is not a sale for resale and that is made by a seller not engaged in business in this state.(c) When several taxable items are sold together and at the same time, the sales tax is determined on the sum of the sales prices of the items sold exclusive of any item the sale of which is exempted by this chapter.(d) For purposes of the printer's tax collection duty, it is presumed that printed materials that are distributed by the United States Postal Service singly or in sets addressed to individual recipients, other than the purchaser, and that are either produced at a printer's facility in this state or purchased in this state are for use in Texas and the printer must collect the tax imposed under this chapter. In order to overcome this presumption a purchaser of printed materials that are distributed by the United States Postal Service singly or in sets addressed to individual recipients, other than the purchaser, is required to issue an exemption certificate to the printer if the printed materials are for distribution to both in-state and out-of-state recipients. The certificate must contain the statement that the printed materials are for multistate use and that the purchaser agrees to pay to this state all taxes that are or may become due to the state on the taxable items purchased under the exemption certificate. In this subsection, "printed materials" is defined to be materials that are produced by web offset or rotogravure printing processes. A printer is relieved of the obligation of collecting the taxes imposed by this chapter on printed materials that are distributed by the United States Postal Service singly or in sets addressed to individual recipients, other than the purchaser, but is required to file a report as provided by Section 151.407.
Acts 1981, 67th Leg., p. 1550, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 2001, 77th Leg., ch. 397, Sec. 1, eff. Sept. 1, 2001.
Sec. 151.053. SALES TAX BRACKETS. (a) If the sales price involves a fraction of a dollar, the sales tax to be added to the sales price shall be computed by multiplying the percentage rate of the sales tax times the amount of the sale. A fraction of one cent that is less than one-half of one cent is not collected and a fraction of one cent that is equal to one-half of one cent or more is collected as one cent of tax.(b) The comptroller may publish schedules and brackets of amounts of taxes based on the formula provided by Subsection (a) of this section for use in the collection of the taxes imposed by this chapter.
Acts 1981, 67th Leg., p. 1550, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 13, Sec. 2, eff. Oct. 2, 1984; Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1, Sec. 2, eff. Jan. 1, 1987; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 3, Sec. 1.
Sec. 151.054. GROSS RECEIPTS PRESUMED SUBJECT TO TAX. (a) Except as provided by Subsection (d) of this section, all gross receipts of a seller are presumed to have been subject to the sales tax unless a properly completed resale or exemption certificate is accepted by the seller.(b) A sale is exempt if the seller receives in good faith from a purchaser, who is in the business of selling, leasing, or renting taxable items, a resale certificate stating that the tangible personal property or service is acquired for the purpose of selling, leasing, or renting it in the regular course of business or for the purpose of transferring it as an integral part of a taxable service performed in the regular course of business.(c) A sale is exempt if the seller receives in good faith from a purchaser an exemption certificate stating qualifications for an exemption provided in Subchapter H of this chapter.(d) A sale of liquor, wine, beer, or malt liquor by the holder of a manufacturer's license, wholesaler's permit, general class B wholesaler's permit, local class B wholesaler's permit, local distributor's permit, or a general, local, or branch distributor's license issued under the Alcoholic Beverage Code to the holder of a retail license or permit issued under the Alcoholic Beverage Code is presumed to be a sale for resale. In a sale to which this section applies, the seller is not required to receive a resale certificate from the purchaser.(e) Properly completed resale or exemption certificates should be in the possession of the seller at the time the nontaxable transaction occurs. If the seller is not in possession of these certificates within 60 days from the date written notice requiring possession of them is given to the seller by the comptroller, deductions claimed by the seller that require delivery of the certificates shall be disallowed. If the seller delivers the certificates to the comptroller within the 60-day period, the comptroller may verify the reason or basis for exemption claimed in the certificates before allowing any deductions. A deduction may not be granted on the basis of certificates delivered to the comptroller after the 60-day period.
Acts 1981, 67th Leg., p. 1550, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 15, Sec. 2, eff. Oct. 2, 1984; Acts 1985, 69th Leg., ch. 206, Sec. 6, eff. Oct. 1, 1985; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 16.
Sec. 151.055. SALES OF ITEMS ACQUIRED FOR LEASE OR RENTAL. (a) If a person purchases tangible personal property by means of a sale for resale for the purpose of renting or leasing the property for use but subsequently sells the property in an occasional sale before the person has collected and paid to the state an amount of sales tax on rental or lease charges equal to the amount of sales tax that would have been due if the person had not acquired the property at a sale for resale, the person at the time of the occasional sale shall include in his receipts from taxable sales the amount by which the purchase price of the item at the occasional sale exceeds the amount received from renting or leasing the property.(b) If tangible personal property is rented or leased under an agreement that provides that all or a portion of the rental or lease payments may be credited against the purchase price of the item, the lessor shall collect the sales tax on the sales price, including the sum of all lease or rental payments for the term of the lease or rental, at the time the purchaser takes possession of the property or when the first payment is due, whichever period is the earlier. If the purchaser-lessee returns the taxable item to the seller-lessor before the end of the lease or rental period without having acquired title to the property, the seller-lessor may take a credit against other taxes due under this chapter or claim a refund as provided by this code for an amount equal to the amount of the taxes paid on the unpaid portion of the sales price.
Acts 1981, 67th Leg., p. 1551, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 9, Sec. 2, eff. Oct. 2, 1984.
Sec. 151.056. PROPERTY CONSUMED IN CONTRACTS TO IMPROVE REAL PROPERTY. (a) A contractor is the consumer of tangible personal property furnished by him and incorporated into the property of his customer if the contract between the contractor and his customer contains a lump-sum price covering both the performance of the service and the furnishing of the necessary incidental material.(b) A contractor is the seller of tangible personal property furnished by him and incorporated into the property of his customer, from whom he shall collect the tax, if the contract between the contractor and his customer contains separate amounts for the performance of the service and for the furnishing of the necessary incidental material. The tax rate is applied to the price of the materials as agreed in the contract or the price of the materials to the contractor, whichever is the greater.(c) If a contractor has paid the sales tax to his supplier when the tangible personal property is purchased, the contractor may credit the amount of the tax paid to the supplier against the tax imposed as provided in Subsection (b) of this section with respect to a subsequent sale of the property.(d) In this section, "contractor" means a person who makes an improvement on real estate and who, as a necessary or incidental part of the service, incorporates tangible personal property into the property improved.(e) This section does not apply to the use or consumption of tangible personal property as a necessary or incidental part of a taxable service.(f) A contractor is not eligible for the exemption provided by Section 151.318 on items used in the performance of a contract to improve real property.(g) In this subsection, "ready mix concrete contractor" means a person who manufactures or produces ready mixed concrete for construction purposes and incorporates the ready mixed concrete in the property improved. A ready mix concrete contractor performing a contract must separate and individually invoice the customer for each yard of ready mixed concrete produced and consumed for the improvement of real property and collect and remit the tax imposed under this chapter on the ready mixed concrete produced and consumed. The tax rate is applied to the price of the materials determined by the greater of the invoice price or fair market value of ready mixed concrete incorporated into the project. This subsection does not apply to an invoice submitted by a ready mix concrete contractor for a public works project.
Acts 1981, 67th Leg., p. 1551, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 17; Acts 2003, 78th Leg., ch. 209, Sec. 18, eff. Oct. 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1266, Sec. 3, eff. September 1, 2007.
Sec. 151.0565. TAXABLE ITEMS SOLD OR PROVIDED UNDER DESTINATION MANAGEMENT SERVICES CONTRACTS. (a) In this section:(1) "Destination management services" means the following services when provided under a qualified destination management services contract:(A) transportation management;(B) booking and managing entertainers;(C) coordination of tours or recreational activities;(D) meeting, conference, or event registration;(E) meeting, conference, or event staffing;(F) event management; and(G) meal coordination.(2) "Qualified destination management company" means a business entity that:(A) is incorporated or is a limited liability company;(B) receives at least 80 percent of the entity's annual total revenue from providing or arranging for the provision of destination management services;(C) maintains a permanent nonresidential office from which the destination management services are provided or arranged;(D) has at least three full-time employees;(E) spends at least one percent of the entity's annual gross receipts to market the destinations with respect to which destination management services are provided;(F) has at least 80 percent of the entity's clients described by Subdivision (3)(A) located outside this state;(G) other than office equipment used in the conduct of the entity's business, does not own equipment used to directly provide destination management services, including motor coaches, limousines, sedans, dance floors, decorative props, lighting, podiums, sound or video equipment, or equipment for catered meals;(H) is not doing business as a caterer;(I) does not provide services for weddings;(J) does not own a venue at which events or activities for which destination management services are provided occur; and(K) is not a subsidiary of another entity that, and is not a member of an affiliated group, as that term is defined by Section 171.0001, another member of which:(i) is doing business as, or owns or operates another entity doing business as, a caterer; or(ii) owns or operates a venue described by Paragraph (J).(3) "Qualified destination management services contract" means a contract under which at least three of the destination management services listed in Subdivision (1) are provided:(A) in this state to a client that is not an individual and that:(i) is a corporation, partnership, limited liability company, trade association, or other business entity, other than a social club or fraternal organization;(ii) has its principal place of business outside the county where the destination management services are to be provided; and(iii) agrees to pay the qualified destination management company for all destination management services provided to the client under the terms of the contract; and(B) by a qualified destination management company that pays or accrues liability for the payment of taxes imposed by this chapter on purchases of taxable items that will be consumed or used by the company in performing the contract.(b) A qualified destination management company is the consumer of taxable items sold or otherwise provided under a qualified destination management services contract, and the destination management services provided under the contract are not considered taxable services, as that term is defined by Section 151.0101.
Added by Acts 2009, 81st Leg., R.S., Ch. 1360, Sec. 2, eff. September 1, 2009.
Sec. 151.057. SERVICES BY EMPLOYEES. The following services are not taxable under this chapter:(1) a service performed by an employee for his employer in the regular course of business, within the scope of the employee's duties, and for which the employee is paid his regular wages or salary;(2) a service performed by an employee of a temporary employment service as defined by Section 93.001, Labor Code, for an employer to supplement the employer's existing work force on a temporary basis, when the service is normally performed by the employer's own employees, the employer provides all supplies and equipment necessary, and the help is under the direct or general supervision of the employer to whom the help is furnished; or(3) a service performed by assigned employees of a staff leasing company, either licensed under Chapter 91, Labor Code, or exempt from the licensing requirements of that chapter, for a client company under a written contract that provides for shared employment responsibilities between the staff leasing company and the client company for the assigned employees, most of whom must have been previously employed by the client company. The comptroller shall prescribe by rule the minimum percentage of assigned employees that must have been previously employed by the client company, the minimum time period the assigned employees must have been employed by the client company prior to the commencement of its contract, and such other criteria as the comptroller may deem necessary to properly implement this section.
Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, Sec. 9, eff. Oct. 2, 1984. Amended by Acts 1989, 71st Leg., ch. 254, Sec. 1, eff. Oct. 1, 1989; Acts 1997, 75th Leg., ch. 1040, Sec. 18, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 1263, Sec. 14, eff. Oct. 1, 2001.
Sec. 151.058. PROPERTY USED TO PROVIDE TAXABLE SERVICES AND SALE PRICE OF TAXABLE SERVICES. (a) A person performing services taxable under this chapter is the consumer of machinery and equipment used in performing the services.(b) The total amount charged for a service taxable under this chapter is subject to tax, including charges for labor, materials, overhead, and profit, regardless of whether such charges are separately identified to the purchaser of the service.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 18. Amended by Acts 1993, 73rd Leg., ch. 1031, Sec. 20, eff. Sept. 1, 1993.
Sec. 151.059. FEE IMPOSED IN LIEU OF LOCAL SALES AND USE TAXES. Section effective contingent upon federal legislation as provided in Acts 1989, 71st Leg., ch. 291, Sec. 5. (a) A nonresident of this state who is required pursuant to federal law to collect sales or use tax under this chapter may elect to pay a fee to the comptroller in lieu of all local sales and use taxes authorized or governed by Title 3 of this code.(b) A person eligible under federal law may elect to pay the fee imposed by this section by written notification to the comptroller. Such notification must be made within 90 days of the date of the first sale on which tax is required to be collected or within such other period as the comptroller may by rule require. The comptroller may require that a notification under this section be made on a form prescribed by the comptroller and contain any information relevant to the collection of taxes under this chapter. A person who does not elect to pay the fee imposed by this section shall collect and remit all applicable state and local sales and use tax imposed under the laws of this state in the same manner as a resident of this state.(c) Unless another rate is required by federal law, the fee imposed under this section shall be the weighted average rate of local sales and use tax collected in this state during the preceding state fiscal year, applied to the total amount subject to sales and use tax imposed by this chapter. The rate shall be determined by the comptroller as soon as practicable following the end of each state fiscal year and shall be effective beginning on January 1 following the end of that state fiscal year. The weighted average rate of local sales and use tax shall be computed by:(1) dividing the aggregate amount of all local sales and use taxes paid in the state by the aggregate amount of all sales and uses to which:(A) the state sales and use tax applies; and(B) local jurisdictions have the power to impose a local sales or use tax; and(2) rounding that result to the nearest .0025.(d) A fee imposed under this section is subject to the provisions of Subtitle B of Title 2 of this code in the same manner as a tax imposed under this chapter.(e) The fee imposed by this chapter shall be remitted quarterly in a manner prescribed by the comptroller, subject to the limitations of applicable federal law, and shall be apportioned and distributed as required by Section 403.107, Government Code.(f) Nothing in this section shall be construed to apply to nonresident persons whose activities would subject them to a duty to pay, collect, or remit a sales or use tax under this chapter or Title 3 of this code in the absence of federal legislation.
Added by Acts 1989, 71st Leg., ch. 291, Sec. 3.
Sec. 151.060. PROPERTY CONSUMED IN REPAIR OF MOTOR VEHICLE. (a) Except as provided by Subsection (b), a person who repairs a motor vehicle is the seller of all tangible personal property consumed in providing that service except electricity and gas, and shall collect the tax due under this chapter from the customer.(b) A person who repairs a motor vehicle is the consumer of all tangible personal property consumed in providing that service if the contract between the person and the customer contains a lump-sum price covering both the performance of the service and the furnishing of the consumed tangible personal property.(c) In this section, tangible personal property is considered consumed if it can no longer be used for its intended purposes in the normal course of business or is not retained or reusable by the person providing the repair service.
Added by Acts 1991, 72nd Leg., ch. 378, Sec. 1, eff. Oct. 1, 1991.
Sec. 151.061. SOURCING OF CHARGES FOR MOBILE TELECOMMUNICATIONS SERVICES. (a) In this section:(1) "Home service provider" means the facilities-based carrier or reseller with which the customer contracts for the provi
