Relating to the location at which certain sales are consummated for purposes of local sales and use taxes.
relating to the location at which certain sales are consummated for
purposes of local sales and use taxes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 321.002(a)(3)(A), Tax Code, is amended
to read as follows:
(3)(A) “Place of business of the retailer” means an
established outlet, office, or location operated by the retailer or
the retailer’s agent or employee for the purpose of receiving
orders for taxable items and includes any location at which three or
more orders are received by the retailer during a calendar year.
The term does not include a computer server, Internet protocol
address, domain name, website, or software application. A
warehouse, storage yard, or manufacturing plant is not a “place of
business of the retailer” unless at least three orders are received
by the retailer during the calendar year at the warehouse, storage
yard, or manufacturing plant.
SECTION 2. Section 321.002(a), Tax Code, is amended by
amending Subdivision (1) and adding Subdivisions (1-a), (1-b), (4),
and (5) to read as follows:
(1) “Active economic development agreement” means an
agreement under Chapter 380, 381, 504, or 505, Local Government
Code, under which the local government made payments on or before
January 1, 2025, based on local sales and use tax collections.
(1-a) “Additional municipal sales and use tax” means
only the additional tax authorized by Section 321.101(b).
(1-b) “Affiliated group” has the meaning assigned by
Section 171.0001.
(4) “Principal business location” means the business
location where the decision makers of a business conduct the daily
affairs of the organization.
(5) “Small business” means a sales tax permit holder
that has:
(A) its principal business location in this
state;
(B) not more than 20 employees, including all
employees of each member of an affiliated group that includes the
permit holder; and
(C) total combined gross receipts from the sale
of tangible personal property and services in the preceding 12
calendar months of less than $500,000, including the gross receipts
of each member of an affiliated group that includes the permit
holder.
SECTION 3. Section 321.203, Tax Code, is amended by
amending Subsections (b), (c), (c-1), (d), and (e-1) and adding
Subsections (o), (p), and (q) to read as follows:
(b) Except as otherwise provided by this section, the sale
of a taxable item by a small business is consummated at the
principal business location of the small business [If a retailer
has only one place of business in this state, all of the retailer’s
retail sales of taxable items are consummated at that place of
business except as provided by Subsection (e)].
(c) Each [If a retailer has more than one place of business
in this state, each] sale of each taxable item by a [the] retailer
other than a small business is consummated at the place of business
of the retailer in this state where the retailer [first] receives
the order, provided that the order is placed in person by the
purchaser or lessee of the taxable item at the place of business of
the retailer in this state where the retailer [first] receives the
order.
(c-1) If Subsections (b) and (c) do [the retailer has more
than one place of business in this state and Subsection (c) does]
not apply, the sale is consummated at the location in this state to
which the item is shipped or delivered or at which possession is
taken by the purchaser [place of business of the retailer in this
state:
[(1) from which the retailer ships or delivers the
item, if the retailer ships or delivers the item to a point
designated by the purchaser or lessee; or
[(2) where the purchaser or lessee takes possession of
and removes the item, if the purchaser or lessee takes possession of
and removes the item from a place of business of the retailer].
(d) If [the retailer has more than one place of business in
this state and] Subsections (b), (c), and (c-1) do not apply, the
sale is consummated at:
(1) the place of business of the retailer in this state
where the order is received; or
(2) if the order is not received at a place of business
of the retailer, the place of business from which the retailer’s
agent or employee who took the order operates.
(e-1) Except as otherwise provided by Subsection (f), (g),
(g-1), (g-2), (g-3), (h), (i), (j), (k), (m), [or] (n), (p), or (q),
a sale of a taxable item made by a marketplace seller through a
marketplace as provided by Section 151.0242 is consummated at the
location in this state to which the item is shipped or delivered or
at which possession is taken by the purchaser.
(o) An order is received at the location where all of the
information from the purchaser necessary to determine whether the
order can be accepted has been received by or on behalf of the
seller. The order is not received at a location where the order is
subsequently accepted, completed, or fulfilled.
(p) A retailer that has an active economic development
agreement with a municipality and has a single place of business in
this state that is within the municipality may elect to collect and
report the sales tax authorized by this chapter based on the
location of the retailer’s single place of business. An election
under this subsection is binding on the retailer and the purchaser.
This subsection expires December 31, 2030.
(q) A retailer that has an active economic development
agreement with a municipality may elect to collect and report the
sales tax authorized by this chapter based on the location of the
retailer within the municipality from which an item is shipped
directly to the purchaser or the purchaser’s designee. An election
under this subsection is binding on the retailer and the purchaser.
This subsection expires December 31, 2030.
SECTION 4. The heading to Section 323.203, Tax Code, is
amended to read as follows:
Sec. 323.203. CONSUMMATION OF SALE: CERTAIN PROVISIONS OF
MUNICIPAL SALES AND USE TAX APPLICABLE.
SECTION 5. Section 323.203(a), Tax Code, is amended to read
as follows:
(a) Sections 321.002 and 321.203 apply to the taxes
authorized by this chapter in the same manner as those sections
apply to the taxes authorized under Chapter 321 [A sale of a taxable
item occurs within the county in which the sale is consummated. A
sale is consummated as provided by this section regardless of the
place where transfer of title or possession occurs].
SECTION 6. The following laws are repealed:
(1) Section 3853.202(d), Special District Local Laws
Code; and
(2) Sections 323.203(b), (c), (c-1), (d), (e), (e-1),
(f), (g), (g-1), (g-2), (g-3), (h), (i), (j), (k), and (m), Tax
Code.
SECTION 7. The changes in law made by this Act do not affect
tax liability accruing before the effective date of this Act. That
liability continues in effect as if this Act had not been enacted,
and the former law is continued in effect for the collection of
taxes due and for civil and criminal enforcement of the liability
for those taxes.
SECTION 8. This Act takes effect January 1, 2026.
