TITLE 34. PUBLIC FINANCE

PART 1. COMPTROLLER OF PUBLIC ACCOUNTS

CHAPTER 3. TAX ADMINISTRATION

SUBCHAPTER O. STATE AND LOCAL SALES AND USE TAXES

34 TAC §3.334

The Comptroller of Public Accounts adopts amendments to §3.334, concerning local sales and use taxes, with changes to the proposed text as published in the January 3, 2020, issue of the Texas Register (45 TexReg 98). The rule will be republished.

In the wake of South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (June 21, 2018), the amendments provide that remote sellers that are required to collect Texas use tax under §3.286 of this title (relating to Seller's and Purchaser's Responsibilities) should collect local use tax based on the destination location. The amendments also implement the requirement that a seller located in Texas collects local use tax when the seller ships or delivers a taxable item into a local jurisdiction where those use taxes exceed the local sales tax where the sale is consummated.

The comptroller also implements House Bill 1525 and House Bill 2153, 86th Legislature, 2019. House Bill 1525 establishes local sales and use tax collection responsibilities on marketplace providers. House Bill 2153 establishes a single local use tax rate that remote sellers may elect to use.

The amendments also provide additional guidance on determining whether an order is received at a place of business of the seller, and clarify the rules for determining the consummation of sales.

Throughout the section, the comptroller makes non-substantive changes by adding or amending rule titles and cross-references. The comptroller also reorganizes this section for clarity and readability.

The comptroller received requests to extend the comment period from the Round Rock Chamber of Commerce; the City of Coppell; the City of San Marcos; the City of Humble; the City of Frisco; the City of Irving; Jennifer May, on behalf of the City of Sugar Land; James Harris, on behalf of members of the Coalition for Appropriate Sales Tax Law Enactment ("CASTLE") (the cities of Coppell, Farmers Branch, Humble, Grand Prairie, Lancaster, San Marcos, Kilgore, and Lewisville); Robert Camareno, on behalf of the City of New Braunfels; Chuck Bailey; Texas State Senators Charles Schwertner, MD, Donna Campbell, MD, Nathan Johnson, Kirk Watson, Larry Taylor, and Brandon Creighton; and Texas State Representatives James Talarico and John H. Bucy, III.

The comptroller extended the 30-day public comment period another 60 days, for a total of 90 days.

The comptroller also received requests to hold a public hearing under Government Code, §2001.029(b)(2) (Public Comment), from Senators Schwertner, MD, Campbell, MD, Johnson, Watson, Taylor, and Creighton; Representatives Talarico and Bucy; and the cities of Sugar Land, San Marcos, Humble, New Braunfels, Round Rock, and Coppell. The comptroller held a public hearing on February 4, 2020. Additionally, the City of Coppell, the City of Round Rock, Ms. May and Mr. Camareno also requested a second public hearing, which the comptroller denied because all parties received additional time until April 3, 2020, to review and provide comments on the amendments.

The cities of Sugar Land and Grand Prairie inquired about additional time to comment because of the COVID-19 pandemic. John Kroll, HMWK, LLC; Stephen Sheets, on behalf of the City of Round Rock; Mr. Harris; and Jeff Moseley commented that the timing of the implementation of the rule will exacerbate the cities' fiscal and budgetary issues due to the current COVID-19 pandemic. The comptroller denied this request because interested parties had notice of these amendments prior to the pandemic, and the comptroller had already granted an extension to provide comments. Interested parties also had additional opportunities to provide comments during the public hearing and an interim hearing before the Texas House of Representatives, Committee on Ways and Means on February 5, 2020 (the Ways and Means hearing).

During the public comment period, the comptroller received comments in writing and orally.

The City of San Marcos commented that it did not have time to conduct a thorough review of the businesses that will be impacted by the proposed changes, and requested the comptroller postpone adopting the changes at least for two years, if not indefinitely. The comptroller denies this request.

The comptroller received support from multiple city mayors, local economic development corporations, and state legislators. Generally, the commenters supported the provisions concerning the sourcing of sales of Internet orders, which will ensure that cities receive their fair share of local sales and use tax revenues. The commenters stated that a large majority of Texas cities and rural communities are losing revenue they need to provide services to their taxpayers that make Internet purchases. Commenters also stated that the proposed rule as a whole reflects the legislature's intent in passing House Bill 1525.

The commenters were: Cathy Bennett, on behalf of the City of Ivanhoe; Steve Presley, on behalf of the City of Palestine; D. Dale Fowler, on behalf of the Victoria Economic Development Corporation; Scott Cain, on behalf of the City of Cleburne; Texas State Representative Travis Clardy; Texas State Representative Oscar Longoria; Texas State Representative Ken King; Polo Narvaez, on behalf of the City of Los Fresnos; Bob F. Brown and Keith Wright, on behalf of the City of Lufkin; Keith Patridge, on behalf of the McAllen Economic Development Corporation; Texas State Representative Keith Bell; Jerry Phillips and Frankie Davis, on behalf of the City of Kermit; Jose G. Solis, Rick Salinas, Tony Chavez, Albert Cavazos, Maggie Quilantan, and Avelardo Mireles, on behalf of the City of Lyford; Jeff Underwood, on behalf of the City of Alton; Steve Peña, on behalf of the City of Alton Development Corporation; Robert Salinas, on behalf of the City of Alamo; Texas State Senator Charles Perry; Texas State Senator Eddie Lucio, Jr.; Texas State Representative Armando "Mando" Martinez; Patrick McNulty, on behalf of the City of South Padre Island; Marie McDermott, on behalf of the Economic Development Corporation of Weslaco; Texas State Representative Sergio Muñoz, Jr.; Brenda Enriquez, on behalf of the Greater Mission Chamber of Commerce; David Suarez, on behalf of the City of Weslaco; Texas State Representative Trent Ashby; Roxanne M. Ray, on behalf of the South Padre Island Chamber of Commerce; Darla Lapeyre, on behalf of the South Padre Island Economic Development Corporation; Texas State Senator Robert L. Nichols; Texas State Senator Peter Flores; Texas State Senator Lois Kolkhorst; Texas State Representative Kyle Kacal; Texas State Senator Juan "Chuy" Hinojosa; Mario Lozoya and Graham Sevier-Shultz, on behalf of the Greater Brownsville Incentives Corporation; Texas State Representative Geanie Morrison; Texas State Representative Ernest J. Bailes, IV; Texas State Senator Dawn Buckingham; Texas State Representative Cody Harris; Richard Newton, on behalf of the City of Colleyville; Texas State Representative Ben Leman; Andrew Smith, on behalf of the City of Hillsboro; Brad Pingel, on behalf of the City of Pampa; Michael Dyson, on behalf of the City of Rollingwood; City Council for the City of Rowlett; Noe Ronnie Larralde, on behalf of the Edinburg Chamber of Commerce; Sergio Contreras, on behalf of the Rio Grande Valley Partnership; Susette McNeel, on behalf of GeoInvoice, Inc.; Eddie Treviño, Jr., on behalf of the Texas Border Coalition; Benjamin Gomez, on behalf of the City of San Benito; Texas State Representative Eddie Lucio, III; Texas State Representative R.D. "Bobby" Guerra; Daniel Silva, on behalf of the Mission Economic Development Corporation; Kenneth Jones, Jr., on behalf of the Lower Rio Grande Valley Development Council; Rose Benavidez, on behalf of the Starr County Industrial Foundation; Dalinda Guillen, on behalf of the Rio Grande City Economic Development Corporation; and Tina O'Jibway, on behalf of Texas State Senator Robert Nichols.

John Kennedy commented on behalf of the Texas Taxpayers and Research Association that the association has some members who support the amendment as proposed; however, it also has members for which the amendment creates additional confusion and compliance costs.

The comptroller amends the definition of "Comptroller's website" in subsection (a)(4) to provide the correct website address.

The comptroller amends the definition of "engaged in business" in subsection (a)(7) to conform the reference to §3.286 of this title.

The comptroller amends subsection (a)(9) to identify activities that are not included in the definition of the term "fulfill." Mr. Sheets and Cindy Olson Bourland, on behalf of the City of Round Rock, commented that change to the definition is not a clarification because the words "fulfill" and "fulfillment" do not appear in Chapter 321 and that sales are taxed where they are "consummated," not "fulfilled." Mr. Sheets proposed to add a new sentence to the definition stating that "except for sales under section (b)(1)(C), where a sale is consummated does not depend on where a sale is fulfilled."

Ms. May commented that the definition of "fulfill" is clear for tangible personal property, but it is unclear how it applies to intangible items such as access to research on online platforms. She requested further clarification in the section for how services such as information services are fulfilled.

The comptroller declines to make the suggested changes. The definition gives effect to Tax Code, §321.203 (Consummation of Sale) and the comptroller will consider addressing consummation of certain services at a later date.

The proposed rule added a definition for "Internet order" in new subsection (a)(10) to distinguish between an order placed through the Internet as opposed to an order placed in person at a seller's location as contemplated in Tax Code, §321.203(c) and §323.203(c). The comptroller received comments regarding this definition. Commenters stated that the definition of "Internet order" will create confusion and requested that the comptroller's office make revisions to clearly define what constitutes an "Internet order."

During the Ways and Means hearing, Texas State Representative Erin Zwiener requested clarification regarding orders received over cellular phones. Mr. Kennedy made similar comments and requested clarification on the treatment of email orders. Ms. Olson Bourland and Bob Scott requested clarifications on Voice over Internet Protocol (VoIP) and whether that constitutes an Internet order.

Mr. Kennedy also requested that the comptroller define the term "order" to clarify when an order is received. Brian Pannell, on behalf of Dell Technologies, made similar comments and also requested clarification concerning purchase orders.

Mr. Sheets commented that the comptroller should define the word "Internet" as found in Tax Code, §151.00393 (Internet), which provides that the Internet is used to "communicate information." He commented that the concept of an "Internet order" does not appear in Chapter 321 of the Tax Code and that it is nothing more than one of many tools for communicating information, no different than the US Postal Service and telephone land lines. Mr. Kroll and Mr. Harris echoed these comments. Mr. Sheets proposed a revised Internet order definition.

Both, Mr. Camareno and Mr. Kroll, commented that the amendment is unclear whether an Internet order can cease to be an Internet order. Mr. Camareno commented that there are times when an Internet order involves human interaction to fulfill an order, and other times when it is automated. Additionally, Mr. Kroll; Craig Morgan, on behalf of the City of Round Rock; Mr. Camareno; Mr. Kennedy; Kyle Kasner; and Karen Hunt, on behalf of the City of Coppell, requested that the amendment be revised to adequately address business-to-business transactions through the Internet because those orders are fundamentally different from business-to-consumer transactions. Mr. Kroll stated that the definition also causes issues when businesses lease computers from a seller because under the property tax rules, the seller retains ownership of the leased computer.

David Edmonson, on behalf of TechNet, and Mr. Pannell commented that rather than choosing specific points in the sales process and giving them more weight than others (thus creating loopholes for sellers and purchasers to use to their advantage), an alternative approach might be the creation of a composite of selling activities test similar to the one used by the state of Illinois to help identify the local sales tax that is most appropriate.

The comptroller declines to make this revision because the creation of a composite of selling activities test is not within the comptroller's rulemaking authority. A composite of selling activities test would require a legislative change because it is not supported by Tax Code, Chapters 321 and 323.

Additionally, in response to these comments, the comptroller is deleting the proposed definition of "Internet order" and the provisions for consummation of sales for Internet orders.

The comptroller amends the definition of "itinerant vendor" in subsection (a)(10) to clarify that an itinerant vendor is a seller who does not have a place of business in the state as provided in Tax Code, §321.203(e)(1). The comptroller also removes the example of an itinerant vendor concerning a person who sells rugs because it is no longer necessary. The comptroller also clarifies that a salesperson operating out of a place of business is not an itinerant vendor. The comptroller deletes from the definition "office" or "other location that provides administrative support to the salesperson" because those do not meet the definition of a place of business of the seller in Tax Code, §321.002(a)(3)(A) (Definitions).

The comptroller adds a definition for "marketplace provider" in new subsection (a)(14) as defined in §3.286 of this title.

The comptroller adds a definition for "order placed in person" in new subsection (a)(15). Orders placed in person are those orders placed with the seller while the purchaser is physically present at a seller's place of business, regardless of how the seller subsequently enters the order. Subsequent paragraphs are renumbered.

Mr. Kroll proposed defining the term as "an order placed by a purchaser with the seller while physically present at the seller's place of business." The comptroller agrees to make the revision for clarity.

The comptroller amends the definition of "place of business of the seller - general definition" in renumbered subsection (a)(16). Tax Code, §321.002(a)(3)(A) defines "place of business of the retailer" as "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 reference to the retailer's "agent or employee" indicates that sales personnel must be at the site, and this requirement has been added to the definition.

In addition, the amended definition clarifies that the term does not include a computer server, an Internet protocol address, a domain name, a website, or a software application. Many sellers house their computer servers at a co-location facility or rent computer server space at a managed hosting site. But an ordinary person would not consider the physical locations of these computer servers to be places of business of the seller. Similarly, an ordinary person would not perceive an Internet protocol address, a domain name, or a website as an "established outlet, office, or location" so as to constitute a place of business. The comptroller reflects these changes throughout the section.

The comptroller also deletes the reference to call centers, showrooms, and clearance centers because those facilities are places of business of the seller only if sales personnel of the seller receive three or more orders during a calendar year at those facilities. The amendment deletes the former example regarding a home office at which items are sold through an online auction website because the example is addressed by new language regarding orders received through a shopping website. The comptroller also amends the definition to delete repetitive language. The comptroller deletes a reference to "administrative offices" because the comptroller determines that an administrative office does not meet the definition of a place of business of the seller under Tax Code, §321.002(a)(3)(A).

The comptroller also adds to the definition of "place of business of the seller - general definition" that an outlet, office, facility, or any similar location that contracts with a business to process certain orders or invoices is not a place of business of the seller if the comptroller determines that these certain locations are for the sole purpose of avoiding tax due or of rebating tax to the contracting location. This change is made pursuant to the definition of "place of business of the retailer" in Tax Code, §321.002(a)(3)(B).

Paul Voelker, on behalf of the City of Richardson; George Kelemen, on behalf of the Texas Retailers Association; and Mr. Harris expressed concerns with the definition of a place of business. Specifically, Mr. Harris stated that the definition is not consistent with the statute or the decision in Combs v. City of Webster, 311 S.W.3d 85 (Tex. App. Austin 2009, pet. denied). He also stated that it contradicts the statutory definition. Mr. Harris and Mr. Kelemen requested that the comptroller revise the definition to restate the statutory language. Mr. Voelker requested that no revisions be made to the current definition. Rudy Durham, on behalf of the City of Lewisville, commented that the place of business definition needs to be updated to keep up with changes in technology. The comptroller declines to make the requested revisions because the amended definition gives effect to the statutory language.

The comptroller adds a definition for "remote seller" in new subsection (a)(18) as defined in §3.286 of this title. Subsequent paragraphs are renumbered.

The comptroller amends the definition of "temporary place of business of the seller" in renumbered subsection (a)(22) to clarify that a temporary place of business of the seller includes a sale outside the walls of a distribution center, manufacturing plant, storage yard, warehouse, or similar facility of the seller in a parking lot or similar space sharing the same physical address as the facility. Sellers may hold sales to the public outside the walls of their facilities on a temporary basis. The comptroller clarifies that these sales constitute temporary places of business of the seller. The comptroller makes these changes throughout the section. Subsequent paragraphs are renumbered.

The comptroller deletes the definition of "traveling salesperson" in subsection (a)(21) because the comptroller will treat traveling salespersons as seller's agents or employees as referenced in Tax Code, §321.002(a)(3)(A). Subsequent paragraphs are renumbered.

The comptroller adds new subsection (b), determining the place of business of a seller. Subsection (b) revises and expands the provisions of former subsection (e) concerning place of business - special definitions.

Former subsection (e)(1) addressed administrative offices supporting traveling salespersons, and former subsection (e)(2) addressed distribution centers, manufacturing plants, and other facilities. In new subsection (b), the comptroller no longer includes administrative offices supporting a traveling salesperson, and distribution centers, manufacturing plants, storage yards, warehouses, or similar facilities operated by a seller at which salespersons are assigned to work in the determination of "place of business of the seller." A seller does not receive orders at administrative offices that solely serve as the base of operations for a salesperson, or that provide administrative support to a salesperson. Moreover, the mere fact that a salesperson is assigned to work from, or work at, a distribution center, manufacturing plant, storage yard, warehouse, or similar facility operated by a seller does not mean that a seller receives orders at these locations. These locations by themselves do not meet the definition of a place of business of the retailer under Tax Code, §321.002(a)(3)(A). The comptroller amends the section to reflect these changes throughout.

Brady Olsen, Tom Hart, and Andrew Fortune, on behalf of the City of Grand Prairie, and Mr. Voelker commented that their cities anticipate losses of sales tax revenues. Mr. Olsen, Mr. Hart, and Mr. Fortune commented the amendment will negatively impact their city's Local Government Code, Chapter 380 agreements (Chapter 380 agreements) due to removing traveling salesperson from the definition of a place of business.

Mr. Kasner commented that business-to-business warehouses and distribution centers often rely heavily on traveling salespersons who are based at those locations. Mr. Kasner requested that the comptroller define "sales office" and contrast it to an "administrative office" that supports traveling salespersons. Mr. Kroll made a similar request.

The comptroller declines to reinsert the omitted provisions because subsection (b) gives effect to Tax Code, §321.002(a)(3)(A) that requires administrative offices and sales offices to independently meet the statutory definition of a place of business. However, new paragraph (4), discussed below, will allow a transition period for these facilities until September 30, 2021.

In new paragraph (1)(A), the comptroller clarifies that locations must be operated by a seller for the purpose of receiving orders and receive three or more orders in a calendar year from persons other than employees, independent contractors, and natural persons affiliated with the seller to be considered a place of business of the seller in Texas. In new paragraph (3), the comptroller restates the provisions from former subsection (e) relating to purchasing offices with minor changes for ease of readability.

Mr. Kroll commented that the language "other than employees, independent contractors, and natural persons affiliated with the seller" contradicts the language in Senate Bill 1533, 83rd Legislature, 2013, as that statute did not impose a related persons test and that bill does not support the new language regarding purchasing offices in paragraph (3). Ms. May requested clarity related to a traveling salesperson working on a campus (group of business buildings that house sales persons, call centers, fulfillment warehouses, and administrative offices) but not in the same building as a place of business. She recommended changing the word "building" to "campus" to avoid confusion. The comptroller declines to make these suggested changes because the clarification gives effect to the statute's definition of a place of business.

The comptroller adds new paragraph (4) for orders received by sales personnel who are not at a place of business of the seller, and new paragraph (5) for orders not received by sales personnel. The comptroller makes these changes in response to commenters' requests for guidance on how to treat orders received by telephone, including VoIP and cellular phone, facsimile, and email.

In the past, orders were typically received at fixed locations, such as orders received in person at the seller's facility, orders received by mail order to the seller's facility, and orders received through landline telephone calls to the seller's facility. Some orders were received by traveling salespersons, and former paragraph (4) applied Tax Code, §321.203(d)(2) to these orders so that the orders were consummated "at the place of business from which the retailer's agent or employee who took the order operates," even though the order may have been actually received by the traveling salesperson at a different location. With the expansion of modern telecommunication techniques, it has become more commonplace for sales personnel who are not traveling salespersons to receive orders when they are not at the seller's place of business, such as orders received by cellular telephone and by email. Accordingly, new paragraph (4) expands the application of Tax Code, §321.203(d)(2) to these orders so that an order received by a salesperson who is not at a place of business of the seller in Texas will be treated as being received at the location from which the salesperson operates. This treatment will result in a more uniform application of the consummation statutes and will facilitate the ability of taxpayers and auditors to determine the location where an order is received.

Paragraph (4) clarifies that the order will be treated as being received at a place of business only if the location out of which the salesperson operates independently meets the requirement for being a place of business of the seller. In addition, to transition from the former rule to the current rule, the comptroller will temporarily expand the definition of "place of business of the seller" for these orders to include an outlet, office, or location operated by the seller that serves as a base of operations or that provides administrative support to the salesperson, until September 30, 2021.

New paragraph (5) addresses orders not received by sales personnel, such as orders received through a shopping website or shopping software application. The comptroller cannot apply the consummation principals of Tax Code, §321.203(d)(2) to these types of orders because that provision is limited to orders received by an "agent or employee."

Instead, these orders will be treated as being received at locations that are not places of business of the seller. This treatment is consistent with the concept that a "place of business" requires the presence of personnel to receive the order. Computer servers, Internet protocol addresses, and automated telephone ordering systems would not ordinarily be called "places of business" of the seller. The comptroller has concluded that the legislature could not have intended that the receipt of an order by an automated mechanical device would make the device an "established outlet, office or location operated by the retailer."

Also, this treatment of orders not received by sales personnel is required to promote uniformity and ease of administration for taxpayers and auditors. Website orders can be received at multiple physical addresses -- any locations that have Internet access. A website order is sent to an Internet protocol ("IP") address. An IP address is the address of the device receiving the order, such as a computer server. An IP address is not a physical address. Websites may use dynamic IP addresses that are assigned by the network upon connection and that change over time. The public IP address of a website may simply be routing orders to different, private IP addresses. Load balancers may change the IP addresses that communicate with customers. Conversely, multiple web sites may be hosted at a single IP address.

The computer server receiving an order placed through a shopping website may belong to the seller or it may belong to a third party. The computer server may be situated on the seller's premises, it may be situated at a co-location facility operated by a third party, or it may be situated at a web hosting facility operated by a third party. The computer server may be one of multiple servers that serve the same website from different physical addresses as part of a cloud distribution network. The computer server may route the order to multiple other servers for load balancing purposes. Conversely, a single computer server may serve multiple websites. Also, the seller may or may not know the physical address of the server receiving the order. The best way to treat these orders consistently and coherently is to treat them uniformly as being received at locations that are not places of business of the seller.

Because the former rule did not explicitly address orders not received by sales personnel, the comptroller is applying paragraph (5) prospectively to orders received after September 30, 2021.

The comptroller adds new subsection (c) to incorporate and reorganize many of the provisions of former subsection (h) concerning consummation of a sale. It reorganizes the general consummation rules stated in former paragraph (3) and applies the general consummation rules to specific situations that were previously addressed in other paragraphs of former subsection (h).

Subsection (c), like former paragraph (3) that it replaces, does not differentiate based on the number of places of business of the seller in the state. Subsection (c) states that the consummation principles of the subsection apply to all sellers, regardless of whether they have no place of business, a single place of business, or multiple places of businesses in the state.

Mr. Sheets commented that the rule should include a special provision for sellers with a single place of business in Texas based on Tax Code, §321.203(b). The comment stated that "all taxable sales of the retailer are consummated at the one place of business."

Tax Code, §321.203(b) describes the consummation principles for a seller that has only one place of business in the state. But those principles are consistent with the treatment of other sellers and do not require special treatment in the rule.

Tax Code, §321.203 as a whole establishes a hierarchy among places of business involved in a transaction. If an order is fulfilled from a place of business of the seller in Texas, the sale is consummated at that location even if the order is received at another place of business in Texas (except for orders received in person). Conversely, an order is consummated at the place of business of the seller in Texas where it is received only if the order was not fulfilled from a place of business in Texas (except for orders received in person). Adopted subsection (c) reflects this hierarchy.

The statutory provision in Tax Code, §321.203(b), for a seller with a single place of business in Texas, is a recognition that the hierarchy is not required in that circumstance. The outcome will be the same regardless of whether the order is received, fulfilled, or received and fulfilled from that place of business, and regardless of whether the order is placed at that location in person - the sale will be consummated at that place of business.

Tax Code, §321.203(b) cannot be interpreted to mean that all sales are consummated at the seller's single place of business in Texas, even if that place of business did not receive the order, did not fulfill the order, and did not serve as the location where the order was delivered to the customer. To consummate a sale and to impose local sales tax in a jurisdiction that had nothing to do with a transaction would be an absurd and possibly unconstitutional reading of the statute.

Mr. Harris commented that the proposed subsection (c)(1) was inconsistent with Chapter 321 because Chapter 321 explicitly ties consummation of sales to the place of business where orders are "received," not where they are "placed." He commented that to the extent that the amendment relies on placement to determine where a sale is consummated, the section contradicts Chapter 321. He requests that any reference to placement of orders, other than orders placed in person or orders placed with a retailer's supplier, should be deleted.

The comptroller agrees that other than orders placed in person, the consummation of sales is tied to the place of business where the order is received, if not fulfilled by a place of business of the seller in Texas. The comptroller makes revisions to clarify and clear up any confusion by the use of the term "placed."

New paragraph (1) provides the consummation of sale rules for orders received at a place of business of the seller in Texas.

New subparagraph (A) provides the consummation of sale rules for orders placed in person, and includes a reference to orders placed at a temporary place of business of the seller, in lieu of the provision found in former subparagraph (h)(6)(C) regarding temporary places of business. Subparagraph (B) provides the consummation of sale rules for orders not placed in person.

New paragraph (2) provides the consummation of sale rules for orders not received at a place of business of the seller in Texas. New subparagraph (A) provides the consummation rule for an order fulfilled at a place of the seller in Texas. New subparagraph (B) provides the consummation rule for an order not fulfilled from a place of business of the seller in Texas.

In light of the Wayfair decision, the comptroller provides in clause (ii) that a remote seller that is required to collect Texas use tax under §3.286(b)(2) must also collect local use tax based on the location to which the item is shipped or delivered or at which the purchaser of the item takes possession unless the remote seller elects to collect the single local use tax rate enacted in House Bill 2153. See Tax Code, §321.205(c) (Use Tax: Municipality in which Use Occurs) and §323.205(c) (Use Tax: County in which Use Occurs).

New paragraph (3) restates the provision in former subsection (h)(3)(F) concerning an exception for qualifying economic development agreements entered into before January 1, 2009, pursuant to Tax Code, §321.203(c-4) - (c-5) or §323.203(c-4) - (c-5) (Consummation of Sale).

Jeffrey Moore, Brown & Hofmeister L.L.P, commented that paragraph (3) runs afoul of Article I, Section 16 of the Constitution of the State of Texas (Bills of Attainder; Ex Post Facto or Retroactive Laws; Impairing Obligation of Contracts). Mr. Moore suggests that the comptroller revise the effective date of the provision until the end of the existing term of the agreement.

The comptroller declines to make this revision because paragraph (3) merely restates the language in former subsection (h)(3)(F), which was adopted in 2014. This subsection implements Senate Bill 997, 83rd Legislature, 2013 (codified at Tax Code, §321.203(c-4) and (c-5)). Moreover, Tax Code, §321.203(c-5) explicitly provides an expiration date of September 1, 2024.

The comptroller deletes former subsection (h)(4) concerning traveling salespersons. The place of business of a traveling salesperson is determined under subsection (b)(4) - orders received by sales personnel who are not at a place of business of the seller when they receive the order.

The comptroller adds new paragraph (4) and includes the language in former subsection (h)(1) concerning local sales taxes due and local use taxes due without any changes. The comptroller restates the language in former subsection (h)(2) concerning multiple special purpose district taxes and multiple transit authority taxes in paragraph (5) without changes to the language.

The comptroller deletes the language found in former subsection (h)(5) concerning drop shipments because these provisions are redundant and the general consummation rules cover these types of orders.

The comptroller adds new paragraph (6) to add the language found in former subsection (h)(6) concerning itinerant vendors and vending machines without changes to the language.

The proposed rule contained a special provision in subsection (c)(6) for Internet orders. The adopted rule deletes this provision. However, the comments regarding the proposed rule for Internet orders may have some relevance to subsection (b)(5), discussed above, regarding orders not received by sales personnel. Accordingly, the comptroller has considered these comments and summarizes them below.

The comptroller received comments concerning Internet orders from Mr. Camareno; the Board of Directors for the Coppell Chamber of Commerce; Mr. Edmonson; Steven Taplits, on behalf of Bed Bath & Beyond; Mr. Voelker; Mr. Kasner; Mr. Olsen; Mr. Hart; Mr. Morgan; Mr. Sheets; Ms. Olson Bourland; Jerry Stratton; Jenna Armstrong, on behalf of the Lake Houston Area Chamber of Commerce; Jack Roberts; G. Brint Ryan, on behalf of Ryan LLC; Doug Duffie, Doug Duffie, LLC; Adina Christian, on behalf of her client; Mr. Kelemen; Mr. Moseley; Ms. May; Jane Hughson, on behalf of the City of San Marcos; David Howard; Linda Howard; Mr. Moore; Mr. Harris; Mr. Kroll; Mr. Pannell; Dan Butcher, Clark Hill Strasburger; Ms. Hunt; Jason Ball, on behalf of the Round Rock Chamber of Commerce; Michael Rollins, on behalf of the Austin Chamber of Commerce; Chris Hillman, on behalf of the City of Irving; Gary Thomas, on behalf of the Dallas Area Rapid Transit; the Honorable US Representative John Carter, on behalf of Round Rock and many other communities; Mr. Durham; Joshua Selleck, on behalf of the City of Kilgore; Kristi Carlson, on behalf of Best Buy Co., Inc.; John Torigian, on behalf of HD Supply; TJ Gilmore and David Erb, on behalf of the City of Lewisville; Michael Land, on behalf of the City of Coppell; Michael Meek, on behalf of the Greater New Braunfels Chamber of Commerce; Mr. Kennedy; John Christian, on behalf of Ryan LLC; Mr. Harris; Heather Hurlbert, on behalf of the City of San Marcos; Mr. Scott; Jared Werner, on behalf of the City of New Braunfels; Mr. Fortune; and Kenneth Welch.

Mr. Kelemen; Ms. Hunt; Mr. Land; the Board of Directors for the Coppell Chamber of Commerce; Mr. Camareno; Representative Zwiener; Representative Talarico; Mr. Morgan; Mr. Sheets; Ms. Olson Bourland; Mr. Voelker; Mr. Durham; Mr. Gilmore; Mr. Ball; Mr. Olsen; Mr. Hart; Mr. Fortune; Ms. Hurlbert; Ms. Hughson; Ms. Armstrong; Mr. Hillman; Mr. Ryan; Ms. Christian; Mr. Duffie; Mr. Howard; Ms. Howard; US Representative Carter; Mr. Scott; Ms. Carlson; Mr. Torigian; and Mr. Kasner stated that the proposed provision regarding Internet orders will have a negative impact on city sales and use tax revenues which will force many of the cities to increase property taxes, reduce core services, and curtail economic development. Mr. Sheets, Mr. Fortune, Mr. Olsen, Mr. Hart, Mr. Morgan, Ms. Hunt, Mr. Harris, and Mr. Durham commented that the amendment will cause a downgrade to city bond ratings.

Ms. Hurlbert stated that the proposed provisions related to Internet orders will narrow what qualifies for rebates under Chapter 380 agreements. She is also concerned about the revenue loss from businesses that do not have Chapter 380 agreements that will be grandfathered under the amendment.

At the Ways and Means hearing, Ms. Hunt expressed concern that under the comptroller's definition many businesses in the City of Coppell will no longer be considered places of business under the amended provisions.

Mr. Selleck commented that the City of Kilgore has a large number of business-to-business transactions that are sourced to the city; but will, in the future, automate their ordering systems. He is concerned that the city will lose those revenues.

Mr. Fortune, Mr. Olsen, and Mr. Hart commented that the proposed provisions related to Internet orders will impact business-to-business transactions. Mr. Gilmore commented that the amendment will redistribute sales tax from less prosperous communities to their more prosperous neighbors. Mr. Voelker commented that the City of Richardson is concerned about losing sales tax because companies have sourced all of their sales to the city as it is where their employee base, sales force, and call center staff are located, and it is where their product orders are received and processed.

Representative Talarico, Mr. Morgan, Mr. Sheets, Ms. Hurlbert, Mr. Gilmore, Mr. Durham, Mr. Meek, the Board of Directors for the Coppell Chamber of Commerce, Mr. Ball, Ms. Armstrong, Mr. Rollins, Mr. Moseley, US Representative Carter, Ms. Carlson, Ms. Olson Bourland, Mr. Howard, Ms. Howard, Mr. Taplits, Mr. Torigian, Mr. Harris, Mr. Scott, and Mr. Camareno made comments on the impact that the proposed provisions on Internet orders will have on Chapter 380 agreements.

Commenters believe the proposed grandfather provisions violate the Constitution of the State of Texas because they impair existing contracts. Specifically, Mr. Moore commented that the proposed subparagraph (F) runs afoul of Article I, Section 16 of the Constitution of the State of Texas. Texas State Representative Jim Murphy and Ms. Olson Bourland made similar comments.

Mr. Moore suggests that the comptroller revise the provision to grandfather existing agreements entered into before September 1, 2019, to the end of their existing term. Mr. Roberts, Mr. Bailey, Mr. Taplits, Ms. Carlson, Mr. Durham, Mr. Kelemen, Mr. Butcher, Mr. Torigian and Mr. Rollins made a similar request. Mr. Roberts, Mr. Bailey, Mr. Duffie, Mr. Camareno, Mr. Scott, Mr. Taplits, Mr. Torigian, and Mr. Butcher also support extending the grandfather clause from a range of five to 20 years.

Mr. Kroll, Mr. Scott, Ms. Hurlbert, and Representative Murphy commented that cities without Chapter 380 agreements will have to source sales from Internet orders immediately and feel the impact. However, cities with Chapter 380 agreements will benefit because of the delayed implementation.

Texas State Representative Drew Springer commented that rural Texas is specifically hit hard because the cities are losing local tax revenue, which are hit harder as more cities execute Chapter 380 agreements. He further commented that the definition of a place of business as it relates to three or more orders is too broad, which can cause gamesmanship in the context of 380 agreements. Mr. Presley also does not think it is appropriate that cities need to support businesses in other cities.

Representative Springer also commented that Chapter 380 agreements were established long before the proliferation of Internet sales and the Wayfair decision and since these changes, he thinks it necessary to address Internet orders with the amendment.

In response to the comments, the comptroller is delaying the implementation of subsection (b)(5), regarding orders not received by sales personnel until October 1, 2021, giving interested parties an opportunity to seek a legislative change.

Additionally, Representative Springer commented that the lack of a detailed list of all Chapter 380 agreements kept in a central location creates a challenge for obtaining information on the agreements because a lot of agreements are very protected.

Commenters requested data and an analysis to determine the impact the amendment will have on their communities, and information on Chapter 380 agreements. The commenters were: Texas State Representative Sheryl Cole, Representative Zweiner, Mr. Fortune, Mr. Olsen, Mr. Hart, Ms. May, Mr. Land, Ms. Hunt, Mr. Voelker, Mr. Scott, and Mr. Hillman. Mr. Fortune asked that the House Ways and Means committee request additional analysis on the amendment's provisions.

Mr. Voelker and Mr. Scott requested that the comptroller gather information across the state regarding Chapter 380 and Chapter 381 agreements to fully understand how the agreements are being used. Mr. Voelker also requested that the comptroller perform an impact analysis to determine how the changes will affect local sales tax collections and existing businesses. Mr. Scott made similar requests.

Mr. Ryan commented that he does not believe the amendment complies with Texas Government Code, §2001.024 (Content of Notice), which requires specific content in the notice of a proposed rule, relating to the fiscal impact of such amendment. Mr. Ryan believes that a fiscal note detailing the fiscal implication for small business in reprogramming software, the shifting of local tax among jurisdictions, the upending of pre-existing Chapter 380 or 381 agreements, and the economic cost to the public is required. Mr. Christian and Mr. Harris agreed. Mr. Harris, additionally, stated that the comptroller did not give adequate notice when reversing a policy as required under federal case law. Mr. Morgan commented that the fiscal impact statement contradicts the known impact to the City of Round Rock. Mr. Sheets and Ms. Olson Bourland made similar comments. Ms. Hunt made similar comments relating to the City of Coppell.

Mr. Morgan; Ms. Hunt; Mr. Land; Mr. Sheets; Representative Talarico; Representative Zwiener; US Representative Carter; Mr. Voelker; Mr. Morgan; the Board of Directors for the Coppell Chamber of Commerce; Mr. Christian; Mr. Ryan; Ms. Christian; Mr. Scott; Mr. Camareno; Mr. Gilmore; Mr. Erb; Mr. Meek; the Board of Directors for the Round Rock Chamber of Commerce; Mr. Kasner; Mr. Torigian; Mr. Kroll; Mr. Moore; and Mr. Harris requested that the comptroller solely implement the provisions in House Bills 1525 and 2153 and the Wayfair decision. Mr. Kroll and Mr. Harris provided draft amendments to accomplish the objective.

Ms. Hunt requested that the comptroller withdraw the amendment as proposed and republish only the language required to implement House Bill 1525 and House Bill 2153 based on the staggering effects of the COVID-19 pandemic on public health and the economy. Ms. Olson Bourland and the Board of Directors for the Coppell Chamber of Commerce had similar comments.

Mr. Butcher, Mr. Ball, Ms. Armstrong, US Representative Carter, Ms. Christian, Mr. Harris, Mr. Erb, Mr. Kroll, Mr. Camareno, Ms. Olson Bourland, Mr. Durham, Mr. Kelemen, Ms. Carlson, Mr. Harris, Mr. Sheets, and Mr. Pannell stated that the amendment is improper because it goes beyond the scope of the Wayfair decision, House Bill 1525, and House Bill 2153, and beyond the comptroller's authority.

Ms. Hunt, Mr. Land, the Board of Directors for the Coppell Chamber of Commerce, Mr. Sheets, Representative Talarico, Mr. Gilmore, Mr. Erb, Representative Zwiener, Representative Murphy, Mr. Meek, Mr. Camareno, Mr. Pannell, Mr. Taplits, Mr. Harris, Mr. Hillman, Mr. Ball, and Mr. Selleck further requested that the comptroller leave the remaining issues for the legislature to decide in future sessions. Ms. Hunt and Mr. Land asked that the Ways and Means Committee request that the comptroller only implement House Bills 1525 and 2153.

Mr. Ryan, Mr. Christian, Mr. Harris, and Mr. Torigian opined that the legislature has accepted the comptroller's long-standing administration of local sales taxes without regard to the technology used by the customer to submit an order and that the comptroller cannot make changes without a statutory change. Mr. Harris commented that in Combs v. City of Webster, the Court stated that "whether {a} result involves 'fair' tax policy is a question for the legislature."

Mr. Presley commented that the way the comptroller has proposed changes has given the legislature adequate time to address the issue. Representative Leman commented that it is a part of the comptroller's function to provide clarifications when needed in a timely manner so that we can have a successful economy.

The comptroller declines to make revisions based on these comments. The comptroller has broad rulemaking authority under Tax Code, §§111.002 (Comptroller's Rules; Compliance; Forfeiture); 321.306 (Comptroller's Rules); and 323.306 (Comptroller's Rules). There is ambiguity in the consummation rule as evidenced by the questions that the comptroller received. There are situations in which the same fact pattern results in sourcing by companies in different manners. The comptroller's changes provide clear guidance to address these situations. The comptroller conducted a statewide fiscal impact analysis as required under the Administrative Procedures Act. The comptroller declines to only implement House Bills 1525 and 2153 and the Wayfair decision. The comptroller delays the implementation of subsection (b)(5), regarding orders not received by sales personnel, until October 1, 2021, giving interested parties time to seek a legislative change.

Mr. Kelemen, Mr. Morgan, Mr. Sheets, Ms. Olson Bourland, Mr. Ryan, Mr. Christian, Mr. Harris, Mr. Camareno, Mr. Pannell, Ms. Carlson, and Mr. Kroll stated that the amendment conflicts with the statute or is not supported by law. Also, Mr. Morgan, Mr. Sheets, and Ms. Olson Bourland commented that the statute and the legislative intent require origin-based sourcing. Mr. Morgan commented that the legislature has always concluded that origin-based sourcing is the most effective method to allocate resources.

Mr. Ryan, Mr. Christian, Mr. Harris, Mr. Kroll, Mr. Camareno, and Mr. Pannell commented that Chapter 321 makes no distinction based on the technology used by the customer to communicate an order except when made in person.

Mr. Harris commented that concluding that Internet orders are not received anywhere is at odds with the comptroller's longstanding position that Internet orders are received at a location in Texas.

He commented that treating Internet orders for taxable items differently from non-Internet orders violates Tax Code, §321.002(a)(3) and §321.203. He commented that in the City of Webster, the comptroller stated that Internet orders can be received at a place of business. He further stated that Chapter 321 already provides the rules for Internet orders. Mr. Sheets and Ms. Olson Bourland made similar remarks.

Ms. Olson Bourland stated numerous reasons that she believes the amendment is contrary to law, including that the amendment is unconstitutional and contradicts comptroller's guidelines and letter rulings. She also commented that the comptroller is judicially estopped from asserting that pertinent portions of the Tax Code are ambiguous.

She commented that the term "fulfillment" does not appear in the statute, but instead contains the term "consummate," which means offer, acceptance, and payment of an item. Mr. Sheets proposed to revise the rule to provide that Internet orders are treated the same as orders submitted and received by other means of communication. He also proposed that when making orders through the Internet or by any other means of communication, the sale is consummated where the order is received, regardless of where the order is fulfilled. Mr. Kelemen made a similar request for revision.

In response to these comments, the comptroller deleted the proposed language regarding Internet orders.

Representative Talarico, Representative Zwiener, Mr. Sheets, Mr. Morgan, Ms. Olson Bourland, Mr. Ryan, and Mr. Ball stated that origin-based sales tax has been applied across the board to all transactions. Ms. Olson Bourland further stated that the amendment completely upends the framework by making Internet orders destination-sourced for purposes of local sales tax.

Mr. Ryan commented that local taxes default to the place of delivery to the customer only when there is no place of business of the seller to which taxes should be allocated.

Mr. Sheets commented that Tax Code, §321.203(b) states that if a retailer has only one place of business, all of a retailer's sales of taxable items are consummated at that place of business, except as provided in subsection (e). Mr. Sheets proposed language to that effect. Mr. Sheets commented that if the comptroller applies the Internet order rule to a seller with a single place of business in the state, the amendment is illegal. Ms. Carlson and Mr. Butcher had similar requests.

Representative Talarico commented that sales tax is based on the business, not on the consumer, and thus, it should apply to purchases over the phone or online. Mr. Stratton commented that he supports an origin-based sales tax system because it is "simpler to calculate, harder to pass the buck on, and more protective of our privacy." However, Mr. Presley commented that all transactions other than the customer showing up at the business should be based on destination.

The comptroller declines to make revisions based on these comments. For the reasons previously stated, the comptroller is deleting the provisions regarding Internet orders, and is adopting provisions regarding orders placed in person, and those not placed in person.

Mr. Kelemen, Mr. Kennedy, Mr. Kroll, Mr. Pannell, Mr. Land, Ms. Hurlbert, Mr. Edmonson, Mr. Ryan, Ms. Christian, Mr. Duffie, Mr. Harris, Ms. Olson Bourland, the Board of Directors for the Coppell Chamber of Commerce, and the Round Rock Chamber of Commerce commented that the proposed provision for Internet orders will place additional administrative compliance burdens on sellers which will force them to update their software within a short timeframe.

Mr. Pannell commented that the amendment will create an undue burden on Texas retailers as they will be required to calculate and collect tax based on the method of communication through which their customers choose to submit orders. Mr. Edmonson, Mr. Kroll, Mr. Land, Mr. Torigian, Mr. Ryan, Ms. Christian, Mr. Duffie, Mr. Harris, and the Board of Directors for the Coppell Chamber of Commerce made similar comments.

The comptroller declines to make revisions based on these comments because taxpayers already must keep records of sales, and such a burden is inherent in the consummation statutes (like the burden of identifying a particular place of business that receives an order when a business has multiple places of business). Taxpayers will also have time to update their systems under the extended implementation date.

Mr. Ryan, Mr. Christian, Ms. Olson Bourland, Mr. Butcher, Mr. Harris, and Mr. Kroll commented that the proposed provisions regarding Internet orders violate the Internet Tax Freedom Act because they discriminate against the Internet.

The provisions do not impose a tax on or discriminate against the Internet, and therefore, do not violate the Internet Tax Freedom Act.

Mr. Ryan commented that sellers are at risk of class action lawsuits for failing to notify their customers that they may pay a higher amount of tax depending on the method the customer uses to place the order. Mr. Ryan adds that sellers are also at risk if they are unable to distinguish between Internet orders and other orders when calculating local taxes.

Mr. Kelemen; Mr. Hillman; Mr. Olsen; Mr. Land; Ms. Hurlbert; Mr. Camareno; Mr. Voelker; Ms. May; Mr. Scott; Mr. Kennedy; Ms. Olson Bourland; Mr. Durham; Mr. Harris; and Teresa Wiley, on behalf of Sysco, Inc., requested that the comptroller delay the implementation date to provide additional time for entities to comply with the provisions on Internet orders and traveling salespersons. In response to these comments, the comptroller has deleted the proposed provision regarding Internet orders, and delayed the implementation of subsections (b)(4) and (b)(5) regarding orders received by sales personnel when they are not at a place of business of the seller and orders not received by sales personnel to October 1, 2021.

The comptroller adds new subsection (d) to include the provisions in former subsection (i), relating to use tax. The comptroller adds new paragraph (1), which includes the language in former subsection (i)(1) concerning general local use tax rules with non-substantive changes for ease of readability.

The comptroller adds new paragraph (2) to include the provisions in former subsection (i)(2) concerning general use tax rules applied to specific situations with changes.

In light of the Wayfair decision, the comptroller gives effect to the Tax Code's requirement that sellers engaged in business in the state collect local use tax for sales consummated in Texas and for sales consummated outside Texas based on the local taxing jurisdictions in which a taxable item is first used, stored, or consumed, regardless of the specific local jurisdiction in which a seller is engaged in business. See Tax Code, §§321.205, 322.105 (Use Tax: Where Use Occurs), and 323.205.

When a sale is consummated in Texas, a seller is engaged in business in this state through the presence of property or employees in the state. See Tax Code, §§151.107 (Retailer Engaged in Business in this State), 321.203, and 323.203. Therefore, the language that a seller be engaged in business in a local jurisdiction for sales consummated in Texas is superfluous. Moreover, an engaged in business standard for local use tax does not give effect to the Tax Code's requirement that a seller collect local use tax that is due and creates an opportunity for sellers to avoid collecting local use tax due. See Tax Code §§151.103(Collection by Retailer; Purchaser's Receipt), 321.003 (Other Portions of Tax Applicable), 321.205, 322.108 (Certain Provisions of Municipal Sales and Use Tax Applicable), 323.003(Other Portions of Tax Applicable), and 323.205. Therefore, the comptroller deletes the "engaged in business" requirement for local use tax throughout the section.

In new paragraph (2), the comptroller implements the Wayfair decision by clarifying that the seller is responsible for collecting the local use tax due on the sale based upon the location in this state to which the order is shipped or delivered or at which the purchaser of the item takes possession.

In new subparagraphs (B) and (C), the comptroller also explicitly states that the location of the seller in Texas does not affect the determination of whether the seller is required to collect additional local use tax due. In new clauses (i) and (ii), the comptroller provides two examples to illustrate when a seller is required to collect additional local use taxes.

The comptroller adds new subsection (e) to include the provisions in former subsection (b), relating to the effects of other law, with minor non-substantive changes to the provisions as they appeared in former subsection (b).

The comptroller adds new subsection (f), to include the provisions of former subsection (c), relating to tax rates without changing the provisions as they appeared in former subsection (c).

The comptroller adds new subsection (g) to include the provisions of former subsection (d), relating to jurisdictional boundaries, combined areas, and city tax imposed through strategic partnership agreements, with non-substantive changes made to the language on combined areas for ease of readability.

The comptroller adds new subsection (h) to include the provisions in former subsection (f) concerning places of business and job sites crossed by local taxing jurisdiction boundaries with a change to the title of the subsection to read places of business of the seller. No other changes were made to those provisions.

The comptroller adds new subsection (i). Throughout new subsection (i), the comptroller implements the Wayfair decision for local use tax to address sales consummated in Texas and sales consummated outside of Texas, including sales by remote sellers.

In new paragraph (1), the comptroller adds the language found in former subsection (g)(1) with changes. The comptroller explicitly states in paragraph (1) that the location of the seller in Texas does not affect the determination of whether the seller is required to collect additional local use tax due.

In new paragraph (2), the comptroller includes the language in former subsection (g)(2) with changes. The comptroller makes a cross-reference to new subsection (i)(3) of the amendment, which implements House Bill 2153. The comptroller also clarifies that new subsection (i)(2) applies to sales not consummated in Texas. The amendment provides that local use tax is based upon the location in this state to which the item is shipped or delivered or at which the purchaser takes possession.

In new paragraph (3), the amendment addresses local use tax for remote sellers and implements the single local use tax rate for remote sellers enacted in House Bill 2153.

New subparagraph (A)(i) provides that a remote seller is required to collect and remit using the combined rate of all applicable local use taxes based on the location to which the item is shipped or delivered or at which the purchaser takes possession. New subparagraph (A)(ii) provides that at the remote seller's election, the remote seller may elect to use the single local use tax rate published in the Texas Register.

New subparagraph (B) addresses the single local use tax rate when a remote seller stores tangible personal property in Texas to be sold on a marketplace. The comptroller recognizes that a remote seller selling tangible personal property on a marketplace may not have control of where their tangible personal property is stored. Therefore, to ease the burden on a remote seller, this provision allows the remote seller to elect the single local use tax rate.

New subparagraph (C) addresses notice requirements a remote seller sends to the comptroller of its election and revocation of election to use the single local use tax rate. New clause (i) provides that a remote seller must notify the comptroller of its election to use the single local use tax rate on a form prescribed by the comptroller or may notify the comptroller of the election on its use tax permit application form before being able to use the single local use tax rate. New clause (i) also requires that a remote seller use the single local use tax rate for all its sales of taxable items until the remote seller revokes the election in writing to the comptroller. New clause (ii) addresses the requirements for a remote seller to revoke its election to collect the single local use tax rate by filing a form prescribed by the comptroller by October 1 of the calendar year.

New subparagraph (D)(i) provides the initial single local use tax rate of 1.75%, which is in effect for the period beginning October 1, 2019, and ending December 31, 2019. Subparagraph (D)(ii) provides the initial single local use tax rate of 1.75%, which is in effect for the period beginning January 1, 2020, and ending December 31, 2020.

New subparagraph (E) provides that before the beginning of a calendar year, the comptroller will publish notice of the single local use tax rate that will be in effect for that calendar year in the Texas Register.

New subparagraph (F) provides the calculation for the single local use tax rate.

New subparagraph (G) provides that a purchaser may request a refund based on local use taxes paid in a calendar year. The refund is for the difference between the single local use tax rate paid by the purchaser and the amount the purchaser would have paid based on the combined tax rate for all applicable local use taxes. Non-permitted purchasers may request a refund directly from the comptroller on an annual basis without having to meet the requirements in §3.325(a)(1) of this title (relating to Refunds and Payments Under Protest) and the statute of limitation under Tax Code, §111.104 (Refunds).

New subparagraph (H) addresses marketplace providers and states that a marketplace provider may only use the combined tax rate of all applicable local use taxes when computing the amount of local use tax to collect and remit.

In new paragraph (4), the comptroller restates the language in deleted subsection (g)(4) concerning purchasers responsible for accruing and remitting local taxes if the seller fails to collect without any changes.

In new paragraph (5), the comptroller restates the language in deleted subsection (g)(5) concerning local tax due on the sales price of a taxable item without any changes.

The comptroller adds new paragraph (6) to relieve a purchaser of liability for additional use tax if the purchaser pays local use tax using the single local use tax rate to an eligible remote seller electing to use the single local use tax rate. Paragraph (6) also requires the purchaser to verify on the comptroller's website that a remote seller has elected to use the single local use tax rate. Moreover, paragraph (6) provides that if a remote seller is not listed on the comptroller's website, the purchaser will be liable for additional use tax due.

Mr. Edmonson commented that TechNet believes that paragraph (6) will create an undue burden on the buyer to verify if the remote seller is registered with the comptroller. He commented that the state should pursue the seller, not the buyer. The comptroller declines to make a revision based on this comment.

The comptroller deletes existing subsection (b), relating to the effect of other law, as this information is contained in new subsection (e) with minor, non-substantive changes.

The comptroller deletes existing subsection (c) relating to tax rates, as that information is contained in new subsection (f) without change.

The comptroller deletes existing subsection (d) relating to jurisdictional boundaries, combined areas, and city tax imposed through strategic partnership agreements, as this information is contained in new subsection (g) with non-substantive changes made to the provisions on combined areas for ease of readability.

The comptroller deletes existing subsection (e) relating to place of business - special definitions, as this information is contained in new subsection (b) with changes.

The comptroller deletes existing subsection (f) concerning places of business and job sites crossed by local taxing jurisdiction boundaries, as this information is contained in new subsection (h) with a change only to the title of the subsection to read places of business of the seller.

The comptroller deletes subsection (g) concerning sellers' and purchasers' responsibilities for collecting or accruing local taxes, as those provisions, except for subsection (g)(3), which was deleted in its entirety, are contained in new subsection (i) with changes.

The comptroller deletes existing subsection (h) concerning local sales tax, as this information is contained in new subsection (c) with changes.

The comptroller deletes existing subsection (i) concerning use tax, as this information is contained in new subsection (d) with changes.

The comptroller adds new subsection (k)(5) to implement House Bill 1525, to address sales of taxable items through marketplace providers. Subsequent paragraphs are renumbered.

Mr. Kroll commented that House Bill 1525 could be interpreted to only source third-party marketplace seller transactions to destination. He commented that the provision should be amended to ensure that all taxable sales made via a marketplace, either by the marketplace provider itself or on behalf of a marketplace seller, should be sourced to destination. He suggested language to that effect. The comptroller declines to make this revision because House Bill 1525 is specific to the sales made by marketplace providers on behalf of marketplace sellers. It does not provide for sourcing on the marketplace provider's own sales. Additionally, amending §3.286 of this title in this section is not appropriate.

The provisions related to remote sellers, the single local use tax rate, and marketplace providers took effect October 1, 2019.

Joe Strong, on behalf of Microsoft, made comments pertaining to marketplace providers and marketplace sellers, registration, good faith, and information requirements, which are addressed in §3.286 of this title and not this amendment. Mr. Howard and Ms. Howard commented that they strongly disagree with the amendment.

Mr. Pannell requested guidance on the information that will be audited by the comptroller and the penalties for incorrect application of local tax. Mr. Kroll commented that the comptroller does not have any training or audit materials for this rule, so it appears businesses will not face compliance scrutiny under audit. The comptroller declines to make revisions based on this comment because this section addresses local sales and use tax administration. The comptroller will provide audit guidelines regarding this section in the appropriate audit materials.

Ms. May urged that the amendment continue to designate purchasing offices as places of business if it is deemed that they do not exist solely to avoid or rebate sales tax. The comptroller did not make any amendments to the definition of purchasing offices.

The comptroller adopts this amendment under Tax Code, §111.002 (Comptroller's Rules; Compliance; Forfeiture), which provides the comptroller with the authority to amend rules to reflect changes in the constitution or laws of the United States and judicial interpretations thereof.

The amendments implement Tax Code, §§151.0595 (Single Local Tax Rate for Remote Sellers), 321.203, and 323.203, and South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (June 21, 2018).

§3.334.Local Sales and Use Taxes.

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Cable system--The system through which a cable service provider delivers cable television or bundled cable service, as those terms are defined in §3.313 of this title (relating to Cable Television Service and Bundled Cable Service).

(2) City--An incorporated city, municipality, town, or village.

(3) City sales and use tax--The tax authorized under Tax Code, §321.101(a), including the additional municipal sales and use tax authorized under Tax Code, §321.101(b), the municipal sales and use tax for street maintenance authorized under Tax Code, §327.003, the Type A Development Corporation sales and use tax authorized under Local Government Code, §504.251, the Type B Development Corporation sales and use tax authorized under Local Government Code, §505.251, a sports and community venue project sales and use tax adopted by a city under Local Government Code, §334.081, and a municipal development corporation sales and use tax adopted by a city under Local Government Code, §379A.081. The term does not include the fire control, prevention, and emergency medical services district sales and use tax authorized under Tax Code, §321.106, or the municipal crime control and prevention district sales and use tax authorized under Tax Code, §321.108.

(4) Comptroller's website--The agency's website concerning local taxes located at: https://comptroller.texas.gov/taxes/sales/.

(5) County sales and use tax--The tax authorized under Tax Code, §323.101, including a sports and community venue project sales and use tax adopted by a county under Local Government Code, §334.081. The term does not include the county health services sales and use tax authorized under Tax Code, §324.021, the county landfill and criminal detention center sales and use tax authorized under Tax Code, §325.021, or the crime control and prevention district sales and use tax authorized under Tax Code, §323.105.

(6) Drop shipment--A transaction in which an order is received by a seller at one location, but the item purchased is shipped by the seller from another location, or is shipped by the seller's third-party supplier, directly to a location designated by the purchaser.

(7) Engaged in business--This term has the meaning given in §3.286 of this title (relating to Seller's and Purchaser's Responsibilities).

(8) Extraterritorial jurisdiction--An unincorporated area that is contiguous to the corporate boundaries of a city as defined in Local Government Code, §42.021.

(9) Fulfill--To complete an order by transferring a taxable item directly to a purchaser at a Texas location, or to ship or deliver a taxable item to a location in Texas designated by the purchaser. The term does not include tracking an order, determining shipping costs, managing inventory, or other activities that do not involve the transfer, shipment, or delivery of a taxable item to the purchaser or a location designated by the purchaser.

(10) Itinerant vendor--A seller who travels to various locations for the purpose of receiving orders and making sales of taxable items and who has no place of business in this state. A person who sells items through vending machines is also an itinerant vendor. A salesperson that operates out of a place of business in this state is not an itinerant vendor.

(11) Kiosk--A small stand-alone area or structure:

(A) that is used solely to display merchandise or to submit orders for taxable items from a data entry device, or both;

(B) that is located entirely within a location that is a place of business of another seller, such as a department store or shopping mall; and

(C) at which taxable items are not available for immediate delivery to a purchaser.

(12) Local taxes--Sales and use taxes imposed by any local taxing jurisdiction.

(13) Local taxing jurisdiction--Any of the following:

(A) a city that imposes sales and use tax as provided under paragraph (3) of this subsection;

(B) a county that imposes sales and use tax as provided under paragraph (5) of this subsection;

(C) a special purpose district created under the Special District Local Laws Code or other provisions of Texas law that is authorized to impose sales and use tax by the Tax Code or other provisions of Texas law and as governed by the provisions of Tax Code, Chapters 321 or 323 and other provisions of Texas law; or

(D) a transit authority that imposes sales and use tax as authorized by Transportation Code, Chapters, 451, 452, 453, 457, or 460 and governed by the provisions of Tax Code, Chapter, 322.

(14) Marketplace provider--This term has the meaning given in §3.286 of this title.

(15) Order placed in person--An order placed by a purchaser with the seller while physically present at the seller's place of business regardless of how the seller subsequently enters the order.

(16) Place of business of the seller - general definition--An established outlet, office, or location operated by a seller for the purpose of selling taxable items to those other than employees, independent contractors, and natural persons affiliated with the seller, where sales personnel of the seller receive three or more orders for taxable items during the calendar year. The term does not include a computer server, Internet protocol address, domain name, website, or software application. Additional criteria for determining when a location is a place of business of the seller are provided in subsection (b) of this section for distribution centers, manufacturing plants, storage yards, warehouses and similar facilities; kiosks; and purchasing offices. An outlet, office, facility, or any location that contracts with a retail or commercial business to process for that business invoices, purchase orders, bills of lading, or other equivalent records onto which sales tax is added, including an office operated for the purpose of buying and selling taxable goods to be used or consumed by the retail or commercial business, is not a place of business of the seller if the comptroller determines that the outlet, office, facility, or location functions or exists to avoid the tax legally due under Tax Code, Chapters 321, 322, and 323 or exists solely to rebate a portion of the tax imposed by those chapters to the contracting business. An outlet, office, facility, or location does not exist to avoid the tax legally due under Tax Code, Chapters 321, 322, and 323 or solely to rebate a portion of the tax imposed by those chapters if the outlet, office, facility, or location provides significant business services, beyond processing invoices, to the contracting business, including logistics management, purchasing, inventory control, or other vital business services.

(17) Purchasing office--An outlet, office, facility, or any location that contracts with a retail or commercial business to process for that business invoices, purchase orders, bills of lading, or other equivalent records onto which sales tax is added, including an office operated for the purpose of buying and selling taxable goods to be used or consumed by the retail or commercial business.

(18) Remote Seller--As defined in §3.286 of this title, a remote seller is a seller engaged in business in this state whose only activity in the state is:

(A) engaging in regular or systematic solicitation of sales of taxable items in this state by the distribution of catalogs, periodicals, advertising flyers, or other advertising, by means of print, radio, or television media, or by mail, telegraphy, telephone, computer data base, cable, optic, microwave, or other communication system for the purpose of effecting sales of taxable items; or

(B) soliciting orders for taxable items by mail or through other media including the Internet or other media that may be developed in the future.

(19) Seller--This term has the meaning given in §3.286 of this title and also refers to any agent or employee of the seller.

(20) Special purpose district--A local governmental entity authorized by the Texas legislature for a specific purpose, such as crime control, a local library, emergency services, county health services, or a county landfill and criminal detention center.

(21) Storage--This term has the meaning given in §3.346 of this title (relating to Use Tax).

(22) Temporary place of business of the seller--A location operated by a seller for a limited period of time for the purpose of selling and receiving orders for taxable items and where the seller has inventory available for immediate delivery to a purchaser. For example, a person who rents a booth at a weekend craft fair or art show to sell and take orders for jewelry, or a person who maintains a facility at a job site to rent tools and equipment to a contractor during the construction of real property, has established a temporary place of business. A temporary place of business of the seller includes a sale outside of a distribution center, manufacturing plant, storage yard, warehouse, or similar facility of the seller in a parking lot or similar space sharing the same physical address as the facility but not within the walls of the facility.

(23) Transit authority--A metropolitan rapid transit authority (MTA), advanced transportation district (ATD), regional or subregional transportation authority (RTA), city transit department (CTD), county transit authority (CTA), regional mobility authority (RMA) or coordinated county transportation authority created under Transportation Code, Chapters 370, 451, 452, 453, 457, or 460.

(24) Two percent cap--A reference to the general rule that, except as otherwise provided by Texas law and as explained in this section, a seller cannot collect, and a purchaser is not obligated to pay, more than 2.0% of the sales price of a taxable item in total local sales and use taxes for all local taxing jurisdictions.

(25) Use--This term has the meaning given in §3.346 of this title.

(26) Use tax--A tax imposed on the storage, use or other consumption of a taxable item in this state.

(b) Determining the place of business of a seller.

(1) Distribution centers, manufacturing plants, storage yards, warehouses, and similar facilities.

(A) A distribution center, manufacturing plant, storage yard, warehouse, or similar facility operated by a seller for the purpose of selling taxable items where sales personnel of the seller receive three or more orders for taxable items during the calendar year from persons other than employees, independent contractors, and natural persons affiliated with the seller is a place of business of the seller.

(B) If a location that is a place of business of the seller, such as a sales office, is in the same building as a distribution center, manufacturing plant, storage yard, warehouse, or similar facility operated by a seller, then the entire facility is a place of business of the seller.

(2) Kiosks. A kiosk is not a place of business of the seller for the purpose of determining where a sale is consummated for local tax purposes. A seller who owns or operates a kiosk in Texas is, however, engaged in business in this state as provided in §3.286 of this title.

(3) Purchasing offices.

(A) A purchasing office is not a place of business of the seller if the purchasing office exists solely to rebate a portion of the local sales and use tax imposed by Tax Code, Chapters 321, 322, or 323 to a business with which it contracts; or if the purchasing office functions or exists to avoid the tax legally due under Tax Code, Chapters 321, 322, or 323. A purchasing office does not exist solely to rebate a portion of the local sales and use tax or to avoid the tax legally due under Tax Code, Chapters 321, 322, or 323 if the purchasing office provides significant business services to the contracting business beyond processing invoices, including logistics management, purchasing, inventory control, or other vital business services.

(B) In making a determination under subparagraph (A) of this paragraph, as to whether a purchasing office provides significant business services to the contracting business beyond processing invoices, the comptroller will compare the total value of the other business services to the value of processing invoices. If the total value of the other business services, including logistics management, purchasing, inventory control, or other vital business services, is less than the value of the service to process invoices, then the purchasing office will be presumed not to be a place of business of the seller.

(C) If the comptroller determines that a purchasing office is not a place of business of the seller, the sale of any taxable item is deemed to be consummated at the place of business of the seller from whom the purchasing office purchased the taxable item for resale and local sales and use taxes are due according to the following rules.

(i) When taxable items are purchased from a Texas seller, local sales taxes are due based on the location of the seller's place of business where the sale is deemed to be consummated, as determined in accordance with subsection (c) of this section.

(ii) When the sale of a taxable item is deemed to be consummated at a location outside of this state, local use tax is due based on the location where the items are first stored, used or consumed by the entity that contracted with the purchasing office in accordance with subsection (d) of this section.

(4) Orders received by sales personnel who are not at a place of business of the seller in Texas when they receive the order, including orders received by mail, telephone, including Voice over Internet Protocol and cellular phone calls, facsimile, and email. This type of order is treated as being received at the location from which the salesperson operates, that is, the principal fixed location where the salesperson conducts work-related activities. The location from which a salesperson operates will be a place of business of the seller only if the location meets the definition of a "place of business of a seller" in subsection (a)(16) of this section on its own, without regard to the orders imputed to that location by this paragraph. Orders received prior to October 1, 2021, may also be treated as being received at the outlet, office, or location operated by the seller that serves as a base of operations or that provides administrative support to the salesperson, and these locations will be treated as places of business of the seller for purposes of subsection (c) of this section.

(5) Orders not received by sales personnel, including orders received by a shopping website or shopping software application. Effective October 1, 2021, these orders are received at locations that are not places of business of the seller.

(c) Local sales tax - Consummation of sale - determining the local taxing jurisdictions to which sales tax is due. Except for the special rules applicable to remote sellers in subsection (i)(3) of this section, direct payment permit purchases in subsection (j) of this section, and certain taxable items, including taxable items sold by a marketplace provider, as provided in subsection (k) of this section, each sale of a taxable item is consummated at the location indicated by the provisions of this subsection. The following rules, taken from Tax Code, §321.203 and §323.203, apply to all sellers engaged in business in this state, regardless of whether they have no place of business in Texas, a single place of business in Texas, or multiple places of business in the state.

(1) Consummation of sale - order received at a place of business of the seller in Texas.

(A) Order placed in person. Except as provided by paragraph (3) of this subsection, when an order for a taxable item is placed in person at a seller's place of business in Texas, including at a temporary place of business of the seller in Texas, the sale of that item is consummated at that place of business of the seller, regardless of the location where the order is fulfilled.

(B) Order not placed in person.

(i) Order fulfilled at a place of business of the seller in Texas. When an order is received at a place of business of the seller in Texas and is fulfilled at a place of business of the seller in Texas, the sale is consummated at the place of business where the order is fulfilled.

(ii) Order not fulfilled at a place of business of the seller in Texas. When an order is received at a place of business of the seller in Texas and is fulfilled at a location that is not a place of business of the seller in Texas, the sale is consummated at the place of business where the order is received.

(2) Consummation of sale - order not received at a place of business of the seller in Texas.

(A) Order fulfilled at a place of business of the seller in Texas. When an order is received at a location that is not a place of business of the seller in Texas or is received outside of Texas, and is fulfilled from a place of business of the seller in Texas, the sale is consummated at the place of business where the order is fulfilled.

(B) Order not fulfilled from a place of business of the seller in Texas.

(i) Order fulfilled in Texas. When an order is received at a location that is not a place of business of the seller in Texas and is fulfilled from a location in Texas that is not a place of business of the seller, the sale is consummated at the location in Texas to which the order is shipped or delivered, or at which the purchaser of the item takes possession.

(ii) Order not fulfilled in Texas. When an order is received by a seller at a location outside of Texas or by a remote seller, and is fulfilled from a location outside of Texas, the sale is not consummated in Texas. However, local use tax is due based upon the location in this state to which the item is shipped or delivered or at which the purchaser of the item takes possession as provided in subsection (d) of this section. Except as provided in subsection (i)(3) of this section, a remote seller required to collect state use tax under §3.286(b)(2) of this title must also collect local use tax based on the location to which the item is shipped or delivered or at which the purchaser of the item takes possession.

(3) Exception for qualifying economic development agreements entered into before January 1, 2009, pursuant to Tax Code, §321.203(c-4) - (c-5) or §323.203(c-4) - (c-5). This paragraph is effective until September 1, 2024. If applicable, the local sales tax due on the sale of a taxable item is based on the location of the qualifying warehouse, which is a place of business of the seller, from which the item is shipped or delivered or at which the purchaser of the item takes possession.

(4) Local sales taxes are due to each local taxing jurisdiction with sales tax in effect where the sale is consummated. Local use tax may also be due if the total amount of local sales taxes due does not reach the two percent cap, and the item purchased is shipped or delivered to a location in one or more different local taxing jurisdictions, as provided in subsection (d) of this section.

(5) Multiple special purpose district taxes, multiple transit authority sales taxes, or a combination of the two may apply to a single transaction. If the sale of a taxable item is consummated at a location within the boundaries of multiple special purpose districts or transit authorities, local sales tax is owed to each of the jurisdictions in effect at that location. For example, a place of business of the seller located in the city of San Antonio is within the boundaries of both the San Antonio Advanced Transportation District and the San Antonio Metropolitan Transit Authority, and the seller is required to collect sales tax for both transit authorities. Similarly, a place of business of the seller in Flower Mound is located within the boundaries of two special purpose districts, the Flower Mound Crime Control District and the Flower Mound Fire Control District, and the seller is responsible for collecting sales tax for both special purpose districts.

(6) Itinerant vendors; vending machines.

(A) Itinerant vendors. Sales made by itinerant vendors are consummated at, and itinerant vendors must collect sales tax based upon, the location where the item is delivered or at which the purchaser of the item takes possession. Itinerant vendors do not have any responsibility to collect use tax.

(B) Vending machines. Sales of taxable items made from a vending machine are consummated at the location of the vending machine. See §3.293 of this title (relating to Food; Food Products; Meals; Food Service) for more information about vending machine sales.

(d) Local use tax. The provisions addressing the imposition of state use tax in §3.346 of this title also apply to the imposition of local use tax. For example, consistent with §3.346(e) of this title, all taxable items that are shipped or delivered to a location in this state that is within the boundaries of a local taxing jurisdiction are presumed to have been purchased for use in that local taxing jurisdiction as well as presumed to have been purchased for use in the state.

(1) General rules.

(A) When local use taxes are due in addition to local sales taxes as provided by subsection (c) of this section, all applicable use taxes must be collected or accrued in the following order until the two percent cap is reached: city, county, special purpose district, and transit authority. If more than one special purpose district use tax is due, all such taxes are to be collected or accrued before any transit authority use tax is collected or accrued. See subparagraphs (D) and (E) of this paragraph.

(B) If a local use tax cannot be collected or accrued at its full rate without exceeding the two percent cap, the seller cannot collect it, or any portion of it, and the purchaser is not responsible for accruing it.

(C) If a seller collects a local sales tax on an item, or a purchaser accrues a local sales tax on an item, a use tax for the same type of jurisdiction is not due on the same item. For example, after a city sales tax has been collected or accrued for an item, no use tax is due to that same or a different city on that item, but use tax may be due to a county, special purpose district, or transit authority. Similarly, if one or more special purpose district sales taxes have been collected or accrued for an item, no special purpose district use tax is due on that item, and if one or more transit authority sales taxes have been collected or accrued for an item, no transit authority use tax is due on that item.

(D) Collection or accrual of use tax for multiple special purpose districts. If more than one special purpose district use tax is in effect at the location where use of an item occurs, the special purpose district taxes are due in the order of their effective dates, beginning with the earliest effective date, until the two percent cap is met. The effective dates of all special purpose district taxes are available on the comptroller's website. However, if the collection or accrual of use tax for the district with the earliest effective date would exceed the two percent cap, the tax for that district is not due and the seller or purchaser should determine, following the criteria in subparagraphs (A) - (C) of this paragraph, whether use tax is due for the district that next became effective.

(i) If the competing special purpose district taxes became effective on the same date, the special purpose district taxes are due in the order of the earliest date for which the election in which the district residents authorized the imposition of sales and use tax by the district was held.

(ii) If the elections to impose the local taxes were held on the same date, the special purpose district taxes are due in the order of the earliest date for which the enabling legislation under which each district was created became effective.

(E) Collection or accrual of use tax for multiple transit authorities. If more than one transit authority use tax is in effect at the location where use of an item occurs, and the two percent cap has not been met, the transit authority taxes are due in the order of their effective dates, beginning with the earliest effective date, until the two percent cap is met. The effective dates of all transit authority taxes are available on the comptroller's website. However, if the collection or accrual of use tax for the authority with the earliest effective date would exceed the two percent cap, the tax for that authority is not due and the seller or purchaser should determine, following the criteria in subparagraphs (A) - (D) of this paragraph, whether use tax is due for the authority that next became effective.

(i) If the competing transit authorities became effective on the same date, the transit authority taxes are due in the order of the earliest date for which the election in which the authority residents authorized the imposition of sales and use tax by the authority was held.

(ii) If the elections to impose local taxes were held on the same date, the transit authority use taxes are due in the order of the earliest date for which the enabling legislation under which each authority was created became effective.

(2) General use tax rules applied to specific situations. The following fact patterns explain how local use tax is to be collected or accrued and remitted to the comptroller based on, and subject to, the general rules in paragraph (1) of this subsection.

(A) Sale consummated outside the state, item delivered from outside the state or from a location in Texas that is not operated by the seller - local use tax due. Except as provided in subsection (i)(3) of this section, if a sale is consummated outside of this state according to the provisions of subsection (c) of this section, and the item purchased is either shipped or delivered to a location in this state as designated by the purchaser from a location outside of the state, or if the order is drop shipped directly to the purchaser from a third-party supplier, local use tax is owed based upon the location in this state to which the order is shipped or delivered or at which the purchaser of the item takes possession. The seller is responsible for collecting the local use tax due on the sale. If the seller does not collect the local use taxes due on the sale, the purchaser is responsible for accruing such taxes and remitting them directly to the comptroller according to the provisions in paragraph (1) of this subsection. For example, if an order for a taxable item is received by a seller at a location outside of Texas, and the order is shipped to the purchaser from a location outside of the state, local use tax is due based upon the location to which the order is shipped or delivered or at which the purchaser of the item takes possession.

(B) Sale consummated in Texas outside a local taxing jurisdiction, item delivered into one or more local taxing jurisdictions - local use tax due. If a sale is consummated at a location in Texas that is outside of the boundaries of any local taxing jurisdiction according to the provisions of subsection (c) of this section, and the order is shipped or delivered to the purchaser at a location in this state that is within the boundaries of one or more local taxing jurisdictions, local use tax is due based on the location to which the items are shipped or delivered or at which the purchaser of the item takes possession. The seller is responsible for collecting the local use taxes due on the sale, regardless of the location of the seller in Texas. If the seller fails to collect any local use taxes due, the purchaser is responsible for accruing such taxes and remitting them directly to the comptroller.

(C) Sale consummated in any local taxing jurisdictions imposing less than 2.0% in total local taxes - local sales taxes and use taxes due. If a sale is consummated at a location in Texas where the total local sales tax rate imposed by the taxing jurisdictions in effect at that location does not equal 2.0% according to the provisions of subsection (c) of this section, and the item is shipped or delivered to the purchaser at a location in this state that is inside the boundaries of a different local taxing jurisdiction, additional local use tax may be due based on the location to which the order is shipped or delivered or at which the purchaser of the item takes possession, subject to the two percent cap. The seller is responsible for collecting any additional local use taxes due on the sale, regardless of the location of the seller in Texas. See subsection (i) of this section. If the seller fails to collect the additional local use taxes due, the purchaser is responsible for accruing such taxes and remitting them directly to the comptroller.

(i) Example one - if an order is received in person at a place of business of the seller, such that the sale is consummated at the location where the order is received as provided under subsection (c)(1)(A) of this section, and the local sales tax due on the sale does not meet the two percent cap, additional local use taxes are due based on the location to which the order is shipped or delivered or at which the purchaser of the item takes possession, subject to the provisions in paragraph (1) of this subsection.

(ii) Example two - if a seller receives an order for a taxable item at a seller's place of business in Texas, and the seller ships or delivers the item from an out-of-state location to a location in this state as designated by the purchaser, local sales tax is due based upon the location of the place of business of the seller where the order is received. If the local sales tax due on the item does not meet the two percent cap, use taxes, subject to the provisions in paragraph (1) of this subsection, are due based upon the location where the items are shipped or delivered or at which the purchaser of the item takes possession.

(e) Effect of other law.

(1) Tax Code, Title 2, Subtitles A (General Provisions) and B (Enforcement and Collection), Tax Code, Chapter 141 (Multistate Tax Compact) and Tax Code, Chapter 151 (Limited Sales, Excise, and Use Tax) apply to transactions involving local taxes. Related sections of this title and comptroller rulings shall also apply with respect to local taxes. This includes authorities such as court cases and federal law that affect whether an item is taxable or is excluded or exempt from taxation.

(2) Permits, exemption certificates, and resale certificates required by Tax Code, Chapter 151, shall also satisfy the requirements for collecting and remitting local taxes, unless otherwise indicated by this section or other sections of this title. For example, see subsection (n) of this section concerning prior contract exemptions.

(3) Any provisions in this section or other sections of this title related to a seller's responsibilities for collecting and remitting local taxes to the comptroller shall also apply to a purchaser if the seller does not collect local taxes that are due. The comptroller may proceed against the seller or purchaser for the local tax owed by either.

(f) Tax rates. Except as otherwise provided by law, no local governmental entity may adopt or increase a sales and use tax if, as a result of the adoption or increase of the tax, the combined rate of all sales and use taxes imposed by local taxing jurisdictions having territory in the local governmental entity would exceed 2.0% at any location within the boundaries of the local governmental entity's jurisdiction. The following are the local tax rates that may be adopted.

(1) Cities. Cities may impose sales and use tax at a rate of up to 2.0%.

(2) Counties. Counties may impose sales and use tax at rates ranging from 0.5% to 1.5%.

(3) Special purpose districts. Special purpose districts may impose sales and use tax at rates ranging from 0.125% to 2.0%.

(4) Transit authorities. Transit authorities may impose sales and use tax at rates ranging from 0.25% to 1.0%.

(g) Jurisdictional boundaries, combined areas, and city tax imposed through strategic partnership agreements.

(1) Jurisdictional boundaries.

(A) City boundaries. City taxing jurisdictional boundaries cannot overlap one another and a city cannot impose a sales and use tax in an area that is already within the jurisdiction of another city.

(B) County boundaries. County tax applies to all locations within that county.

(C) Special purpose district and transit authority boundaries. Special purpose districts and transit authorities may cross or share boundaries with other local taxing jurisdictions and may encompass, in whole or in part, other local taxing jurisdictions, including cities and counties. A geographic location or address in this state may lie within the boundaries of more than one special purpose district or more than one transit authority.

(D) Extraterritorial jurisdictions. Except as otherwise provided by paragraph (3) of this subsection concerning strategic partnership agreements and subsection (l)(5) of this section concerning the City of El Paso and Fort Bliss, city sales and use tax does not apply to taxable sales that are consummated outside the boundaries of the city, including sales made in a city's extraterritorial jurisdiction. However, an extraterritorial jurisdiction may lie within the boundaries of a special purpose district, transit authority, county, or any combination of the three, and the sales and use taxes for those jurisdictions would apply to those sales.

(2) Combined areas. A combined area is an area where the boundaries of a city overlap the boundaries of one or more other local taxing jurisdictions as a result of an annexation of additional territory by the city, and where, as the result of the imposition of the city tax in the area in addition to the local taxes imposed by the existing taxing jurisdictions, the combined local tax rate would exceed 2.0%. The comptroller shall make accommodations to maintain a 2.0% rate in any combined area by distributing the 2.0% tax revenue generated in these combined areas to the local taxing jurisdictions located in the combined areas as provided in Tax Code, §321.102 or Health and Safety Code, §775.0754. Combined areas are identified on the comptroller's website. Sellers engaged in transactions on which local sales or use taxes are due in a combined area, or persons who must self-accrue and remit tax directly to the comptroller, must use the combined area local code when reporting the tax rather than the codes for the individual city, county, special purpose districts, or transit authorities that make up the combined area.

(3) City tax imposed through strategic partnership agreements.

(A) The governing bodies of a district, as defined in Local Government Code, §43.0751, and a city may enter into a limited-purpose annexation agreement known as a strategic partnership agreement. Under this agreement, the city may impose sales and use tax within all or part of the boundaries of a district. Areas within a district that are annexed for this limited purpose are treated as though they are within the boundaries of the city for purposes of city sales and use tax.

(B) Counties, transit authorities, and special purpose districts may not enter into strategic partnership agreements. Sales and use taxes imposed by those taxing jurisdictions do not apply in the limited-purpose annexed area as part of a strategic partnership agreement between a city and an authorized district. However, a county, special purpose district, or transit authority sales and use tax, or any combination of these three types of taxes, may apply at locations included in a strategic partnership agreement between a city and an authorized district if the tax is imposed in that area by the applicable jurisdiction as allowed under its own controlling authorities.

(C) Prior to September 1, 2011, the term "district" was defined in Local Government Code, §43.0751 as a municipal utility district or a water control and improvement district. The definition was amended effective September 1, 2011, to mean a conservation and reclamation district operating under Water Code, Chapter 49.

(h) Places of business of the seller and job sites crossed by local taxing jurisdiction boundaries.

(1) Places of business of the seller crossed by local taxing jurisdiction boundaries. If a place of business of the seller is crossed by one or more local taxing jurisdiction boundaries so that a portion of the place of business of the seller is located within a taxing jurisdiction and the remainder of the place of business of the seller lies outside of the taxing jurisdiction, tax is due to the local taxing jurisdictions in which the sales office is located. If there is no sales office, sales tax is due to the local taxing jurisdictions in which any cash registers are located.

(2) Job sites.

(A) Residential repair and remodeling; new construction of an improvement to realty. When a contractor is improving real property under a separated contract, and the job site is crossed by the boundaries of one or more local taxing jurisdictions, the local taxes due on any separately stated charges for taxable items incorporated into the real property must be allocated to the local taxing jurisdictions based on the total square footage of the real property improvement located within each jurisdiction, including the square footage of any standalone structures that are part of the construction, repair, or remodeling project. For more information about tax due on materials used at residential and new construction job sites, refer to §3.291 of this title (relating to Contractors).

(B) Nonresidential real property repair and improvement. When taxable services are performed to repair, remodel, or restore nonresidential real property, including a pipeline, transmission line, or parking lot, that is crossed by the boundaries of one or more local taxing jurisdictions, the local taxes due on the taxable services, including materials and any other charges connected to the services performed, must be allocated among the local taxing jurisdictions based upon the total mileage or square footage, as appropriate, of the repair, remodeling, or restoration project located in each jurisdiction. For more information about tax due on materials used at nonresidential real property repair and remodeling job sites, refer to §3.357 of this title (relating to Nonresidential Real Property Repair, Remodeling, and Restoration; Real Property Maintenance).

(i) Sellers' and purchasers' responsibilities for collecting or accruing local taxes.

(1) Sale consummated in Texas; seller responsible for collecting local sales taxes and applicable local use taxes. When a sale of a taxable item is consummated at a location in Texas as provided by subsection (c) of this section, the seller must collect each local sales tax in effect at the location. If the total rate of local sales tax due on the sale does not reach the two percent cap, and the seller ships or delivers the item into another local taxing jurisdiction, then the seller is required to collect additional local use taxes due, if any, based on the location to which the item is shipped or delivered or at which the purchaser of the item takes possession, regardless of the location of the seller in Texas. For more information regarding local use taxes, refer to subsection (d) of this section.

(2) Out-of-state sale; seller engaged in business in Texas. Except as provided in paragraph (3) of this subsection, when a sale is not consummated in Texas, a seller who is engaged in business in this state is required to collect and remit local use taxes due, if any, on orders of taxable items shipped or delivered at the direction of the purchaser into a local taxing jurisdiction in this state based upon the location in this state to which the item is shipped or delivered or at which the purchaser of the item takes possession as provided in subsection (d) of this section.

(3) Local use tax rate for remote sellers.

(A) A remote seller required to collect and remit one or more local use taxes in connection with a sale of a taxable item must compute the amount using:

(i) the combined tax rate of all applicable local use taxes based on the location to which the item is shipped or delivered or at which the purchaser of the item takes possession; or

(ii) at the remote seller's election, the single local use tax rate published in the Texas Register.

(B) A remote seller that is storing tangible personal property in Texas to be used for fulfillment at a facility of a marketplace provider that has certified that it will assume the rights and duties of a seller with respect to the tangible personal property, as provided for in §3.286 of this title, may elect the single local use tax rate under subparagraph (A)(ii) of this paragraph.

(C) Notice to the comptroller of election and revocation of election.

(i) Before using the single local use tax rate, a remote seller must notify the comptroller of its election using a form prescribed by the comptroller. A remote seller may also notify the comptroller of the election on its use tax permit application form. The remote seller must use the single local use tax rate for all of its sales of taxable items until the election is revoked as provided in clause (ii) of this subparagraph.

(ii) A remote seller may revoke its election by filing a form prescribed by the comptroller. If the comptroller receives the notice by October 1, the revocation will be effective January 1 of the following year. If the comptroller receives the notice after October 1, the revocation will be effective January 1 of the year after the following year. For example, a remote seller must notify the comptroller by October 1, 2020, for the revocation to be effective January 1, 2021. If the comptroller receives the revocation on November 1, 2020, the revocation will be effective January 1, 2022.

(D) Single local use tax rate.

(i) The single local use tax rate in effect for the period beginning October 1, 2019, and ending December 31, 2019, is 1.75%.

(ii) The single local use tax rate in effect for the period beginning January 1, 2020, and ending December 31, 2020, is 1.75%.

(E) Annual publication of single local use tax rate. Before the beginning of a calendar year, the comptroller will publish notice of the single local use tax rate in the Texas Register that will be in effect for that calendar year.

(F) Calculating the single local use tax rate. The single local use tax rate effective in a calendar year is equal to the estimated average rate of local sales and use taxes imposed in this state during the preceding state fiscal year. As soon as practicable after the end of a state fiscal year, the comptroller must determine the estimated average rate of local sales and use taxes imposed in this state during the preceding state fiscal year by:

(i) dividing the total amount of net local sales and use taxes remitted to the comptroller during the state fiscal year by the total amount of net state sales and use tax remitted to the comptroller during the state fiscal year;

(ii) multiplying the amount computed under clause (i) of this subparagraph by the rate provided in Tax Code, §151.051; and

(iii) rounding the amount computed under clause (ii) of this subparagraph to the nearest .0025.

(G) Direct refund. A purchaser may request a refund based on local use taxes paid in a calendar year for the difference between the single local use tax rate paid by the purchaser and the amount the purchaser would have paid based on the combined tax rate for all applicable local use taxes. Notwithstanding the refund requirements under §3.325(a)(1) of this title (relating to Refunds and Payments Under Protest), a non-permitted purchaser may request a refund directly from the comptroller for the tax paid in the previous calendar year, no earlier than January 1 of the following calendar year within the statute of limitation under Tax Code, 111.104 (Refunds).

(H) Marketplace providers. Notwithstanding subparagraph (A) of this paragraph, marketplace providers may not use the single local use tax rate and must compute the amount of local use tax to collect and remit using the combined tax rate of all applicable local use taxes.

(4) Purchaser responsible for accruing and remitting local taxes if seller fails to collect.

(A) If a seller does not collect the state sales tax, any applicable local sales taxes, or both, on a sale of a taxable item that is consummated in Texas, then the purchaser is responsible for filing a return and paying the tax. The local sales taxes due are based on the location in this state where the sale is consummated as provided in subsection (c) of this section.

(B) A purchaser who buys an item for use in Texas from a seller who does not collect the state use tax, any applicable local use taxes, or both, is responsible for filing a return and paying the tax. The local use taxes due are based on the location where the item is first stored, used, or consumed by the purchaser.

(C) For more information about how to report and pay use tax directly to the comptroller, see §3.286 of this title.

(5) Local tax is due on the sales price of a taxable item, as defined in Tax Code, §151.007, in the report period in which the taxable item is purchased or the period in which the taxable item is first stored, used, or otherwise consumed in a local taxing jurisdiction.

(6) A purchaser is not liable for additional local use tax if the purchaser pays local use tax using the rate elected by an eligible remote seller according to paragraph (3) of this subsection. The remote seller must be identified on the comptroller's website as electing to use the single local use tax rate. A purchaser must verify that the remote seller is listed on the comptroller's website. If the remote seller is not listed on the comptroller's website, the purchaser will be liable for additional use tax due in accordance to paragraph (4) of this subsection.

(j) Items purchased under a direct payment permit.

(1) When taxable items are purchased under a direct payment permit, local use tax is due based upon the location where the permit holder first stores the taxable items, except that if the taxable items are not stored, then local use tax is due based upon the location where the taxable items are first used or otherwise consumed by the permit holder.

(2) If, in a local taxing jurisdiction, storage facilities contain taxable items purchased under a direct payment exemption certificate and at the time of storage it is not known whether the taxable items will be used in Texas, then the taxpayer may elect to report the use tax either when the taxable items are first stored in Texas or are first removed from inventory for use in Texas, as long as use tax is reported in a consistent manner. See also §3.288(i) of this title (relating to Direct Payment Procedures and Qualifications) and §3.346(g) of this title.

(3) If local use tax is paid on stored items that are subsequently removed from Texas before they are used, the tax may be recovered in accordance with the refund and credit provisions of §3.325 of this title and §3.338 of this title (relating to Multistate Tax Credits and Allowance of Credit for Tax Paid to Suppliers).

(k) Special rules for certain taxable goods and services. Sales of the following taxable goods and services are consummated at, and local tax is due based upon, the location indicated in this subsection.

(1) Amusement services. Local tax is due based upon the location where the performance or event occurs. For more information on amusement services, refer to §3.298 of this title (relating to Amusement Services).

(2) Cable services. When a service provider uses a cable system to provide cable television or bundled cable services to customers, local tax is due as provided for in §3.313 of this title. When a service provider uses a satellite system to provide cable services to customers, no local tax is due on the service in accordance with the Telecommunications Act of 1996, §602.

(3) Florists. Local sales tax is due on all taxable items sold by a florist based upon the location where the order is received, regardless of where or by whom delivery is made. Local use tax is not due on deliveries of taxable items sold by florists. For example, if the place of business of the florist where an order is taken is not within the boundaries of any local taxing jurisdiction, no local sales tax is due on the item and no local use tax is due regardless of the location of delivery. If a Texas florist delivers an order in a local taxing jurisdiction at the instruction of an unrelated florist, and if the unrelated florist did not take the order within the boundaries of a local taxing jurisdiction, local use tax is not due on the delivery. For more information about florists' sales and use tax obligations, refer to §3.307 of this title (relating to Florists).

(4) Landline telecommunications services. Local taxes due on landline telecommunications services are based upon the location of the device from which the call or other transmission originates. If the seller cannot determine where the call or transmission originates, local taxes due are based on the address to which the service is billed. For more information, refer to §3.344 of this title (relating to Telecommunications Services).

(5) Marketplace provider sales. Local taxes are due on sales of taxable items through a marketplace provider based on the location in this state to which the item is shipped or delivered or at which the purchaser takes possession. For more information, refer to §3.286 of this title.

(6) Mobile telecommunications services. Local taxes due on mobile telecommunications services are based upon the location of the customer's place of primary use as defined in §3.344(a)(8) of this title, and local taxes are to be collected as indicated in §3.344(h) of this title.

(7) Motor vehicle parking and storage. Local taxes are due based on the location of the space or facility where the vehicle is parked. For more information, refer to §3.315 of this title (relating to Motor Vehicle Parking and Storage).

(8) Natural gas and electricity. Any local city and special purpose taxes due are based upon the location where the natural gas or electricity is delivered to the purchaser. As explained in subsection (l)(1) of this section, residential use of natural gas and electricity is exempt from all county sales and use taxes and all transit authority sales and use taxes, most special purpose district sales and use taxes, and many city sales and use taxes. A list of the cities and special purpose districts that do impose, and those that are eligible to impose, local sales and use tax on residential use of natural gas and electricity is available on the comptroller's website. For more information, also refer to §3.295 of this title (relating to Natural Gas and Electricity).

(9) Nonresidential real property repair and remodeling services. Local taxes are due on services to remodel, repair, or restore nonresidential real property based on the location of the job site where the remodeling, repair, or restoration is performed. See also subsection (h)(2)(B) of this section and §3.357 of this title.

(10) Residential real property repair and remodeling and new construction of a real property improvement performed under a separated contract. When a contractor constructs a new improvement to realty pursuant to a separated contract or improves residential real property pursuant to a separated contract, the sale is consummated at the job site at which the contractor incorporates taxable items into the customer's real property. See also subsection (h)(2)(A) of this section and §3.291 of this title.

(11) Waste collection services. Local taxes are due on garbage or other solid waste collection or removal services based on the location at which the waste is collected or from which the waste is removed. For more information, refer to §3.356 of this title (relating to Real Property Service).

(l) Special exemptions and provisions applicable to individual jurisdictions.

(1) Residential use of natural gas and electricity.

(A) Mandatory exemptions from local sales and use tax. Residential use of natural gas and electricity is exempt from most local sales and use taxes. Counties, transit authorities, and most special purpose districts are not authorized to impose sales and use tax on the residential use of natural gas and electricity. Pursuant to Tax Code, §321.105, any city that adopted a local sales and use tax effective October 1, 1979, or later is prohibited from imposing tax on the residential use of natural gas and electricity. See §3.295 of this title.

(B) Imposition of tax allowed in certain cities. Cities that adopted local sales tax prior to October 1, 1979, may, in accordance with the provisions in Tax Code, §321.105, choose to repeal the exemption for residential use of natural gas and electricity. The comptroller's website provides a list of cities that impose tax on the residential use of natural gas and electricity, as well as a list of those cities that do not currently impose the tax, but are eligible to do so.

(C) Effective January 1, 2010, a fire control, prevention, and emergency medical services district organized under Local Government Code, Chapter 344 that imposes sales tax under Tax Code, §321.106, or a crime control and prevention district organized under Local Government Code, Chapter 363 that imposes sales tax under Tax Code, §321.108, that is located in all or part of a municipality that imposes a tax on the residential use of natural gas and electricity as provided under Tax Code, §321.105 may impose tax on residential use of natural gas and electricity at locations within the district. A list of the special purpose districts that impose tax on residential use of natural gas and electricity and those districts eligible to impose the tax that do not currently do so is available on the comptroller's website.

(2) Telecommunication services. Telecommunications services are exempt from all local sales taxes unless the governing body of a city, county, transit authority, or special purpose district votes to impose sales tax on these services. However, since 1999, under Tax Code, §322.109(d), transit authorities created under Transportation Code, Chapter 451 cannot repeal the exemption unless the repeal is first approved by the governing body of each city that created the local taxing jurisdiction. The local sales tax is limited to telecommunications services occurring between locations within Texas. See §3.344 of this title. The comptroller's website provides a list of local taxing jurisdictions that impose tax on telecommunications services.

(3) Emergency services districts.

(A) Authority to exclude territory from imposition of emergency services district sales and use tax. Pursuant to the provisions of Health and Safety Code, §775.0751(c-1), an emergency services district wishing to enact a sales and use tax may exclude from the election called to authorize the tax any territory in the district where the sales and use tax is then at 2.0%. The tax, if authorized by the voters eligible to vote on the enactment of the tax, then applies only in the portions of the district included in the election. The tax does not apply to sales made in the excluded territories in the district and sellers in the excluded territories should continue to collect local sales and use taxes for the local taxing jurisdictions in effect at the time of the election under which the district sales and use tax was authorized as applicable.

(B) Consolidation of districts resulting in sales tax sub-districts. Pursuant to the provisions of Health and Safety Code, §775.018(f), if the territory of a district proposed under Health and Safety Code, Chapter 775 overlaps with the boundaries of another district created under that chapter, the commissioners court of each county and boards of the counties in which the districts are located may choose to create a consolidated district in the overlapping territory. If two districts that want to consolidate under Health and Safety Code, §775.024 have different sales and use tax rates, the territory of the former districts located within the consolidated area will be designated as sub-districts and the sales tax rate within each sub-district will continue to be imposed at the rate the tax was imposed by the former district that each sub-district was part of prior to the consolidation.

(4) East Aldine Management District.

(A) Special sales and use tax zones within district; separate sales and use tax rate. As set out in Special District Local Laws Code, §3817.154(e) and (f), the East Aldine Management District board may create special sales and use tax zones within the boundaries of the District and, with voter approval, enact a special sales and use tax rate in each zone that is different from the sales and use tax rate imposed in the rest of the district.

(B) Exemptions from special zone sales and use tax. The sale, production, distribution, lease, or rental of; and the use, storage, or other consumption within a special sales and use tax zone of; a taxable item sold, leased, or rented by the entities identified in clauses (i) - (vi) of this subparagraph are exempt from the special zone sales and use tax. State and all other applicable local taxes apply unless otherwise exempted by law. The special zone sales and use tax exemption applies to:

(i) a retail electric provider as defined by Utilities Code, §31.002;

(ii) an electric utility or a power generation company as defined by Utilities Code, §31.002;

(iii) a gas utility as defined by Utilities Code, §101.003 or §121.001, or a person who owns pipelines used for transportation or sale of oil or gas or a product or constituent of oil or gas;

(iv) a person who owns pipelines used for the transportation or sale of carbon dioxide;

(v) a telecommunications provider as defined by Utilities Code, §51.002; or

(vi) a cable service provider or video service provider as defined by Utilities Code, §66.002.

(5) Imposition of city sales tax and transit tax on certain military installations; El Paso and Fort Bliss. Pursuant to Tax Code, §321.1045 (Imposition of Sales and Use Tax in Certain Federal Military Installations), for purposes of the local sales and use tax imposed under Tax Code, Chapter 321, the city of El Paso includes the area within the boundaries of Fort Bliss to the extent it is in the city's extraterritorial jurisdiction. However, the El Paso transit authority does not include Fort Bliss. See Transportation Code, §453.051 concerning the Creation of Transit Departments.

(m) Restrictions on local sales tax rebates and other economic incentives. Pursuant to Local Government Code, §501.161, Section 4A and 4B development corporations may not offer to provide economic incentives, such as local sales tax rebates authorized under Local Government Code, Chapters 380 or 381, to persons whose business consists primarily of purchasing taxable items using resale certificates and then reselling those same items to a related party. A related party means a person or entity which owns at least 80% of the business enterprise to which sales and use taxes would be rebated as part of an economic incentive.

(n) Prior contract exemptions. The provisions of §3.319 of this title (relating to Prior Contracts) concerning definitions and exclusions apply to prior contract exemptions.

(1) Certain contracts and bids exempt. No local taxes are due on the sale, use, storage, or other consumption in this state of taxable items used:

(A) for the performance of a written contract executed prior to the effective date of any local tax if the contract may not be modified because of the tax; or

(B) pursuant to the obligation of a bid or bids submitted prior to the effective date of any local tax if the bid or bids and contract entered into pursuant thereto are at a fixed price and not subject to withdrawal, change, or modification because of the tax.

(2) Annexations. Any annexation of territory into an existing local taxing jurisdiction is also a basis for claiming the exemption provided by this subsection.

(3) Local taxing jurisdiction rate increase; partial exemption for certain contracts and bids. When an existing local taxing jurisdiction raises its sales and use tax rate, the additional amount of tax that would be due as a result of the rate increase is not due on the sale, use, storage, or other consumption in this state of taxable items used:

(A) for the performance of a written contract executed prior to the effective date of the tax rate increase if the contract may not be modified because of the tax; or

(B) pursuant to the obligation of a bid or bids submitted prior to the effective date of the tax rate increase if the bid or bids and contract entered into pursuant thereto are at a fixed price and not subject to withdrawal, change, or modification because of the tax.

(4) Three-year statute of limitations.

(A) The exemption in paragraph (1) of this subsection and the partial exemption in paragraph (3) of this subsection have no effect after three years from the date the adoption or increase of the tax takes effect in the local taxing jurisdiction.

(B) The provisions of §3.319 of this title apply to this subsection to the extent they are consistent.

(C) Leases. Any renewal or exercise of an option to extend the time of a lease or rental contract under the exemptions provided by this subsection shall be deemed to be a new contract and no exemption will apply.

(5) Records. Persons claiming the exemption provided by this subsection must maintain records which can be verified by the comptroller or the exemption will be lost.

(6) Exemption certificate. An identification number is required on the prior contract exemption certificates furnished to sellers. The identification number should be the person's 11-digit Texas taxpayer number or federal employer's identification (FEI) number.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 11, 2020.

TRD-202001858

William Hamner

Special Counsel for Tax Administration

Comptroller of Public Accounts

Effective date: May 31, 2020

Proposal publication date: January 3, 2020

For further information, please call: (512) 475-2220


CHAPTER 9. PROPERTY TAX ADMINISTRATION

SUBCHAPTER A. PRACTICE AND PROCEDURE

34 TAC §9.103

The Comptroller of Public Accounts adopts the repeal of existing §9.103, concerning audits of school district taxable property values, without changes to the proposed text as published in the February 14, 2020, issue of the Texas Register (45 TexReg 998). The rule will not be republished.

The comptroller repeals existing §9.103 in order to adopt new §9.103 with revisions to improve clarity, organization and implementation of the section. The repeal of §9.103 will be effective as of the date the new §9.103 takes effect.

The comptroller did not receive any comments regarding adoption of the repeal.

The repeal is adopted under Government Code, §403.302 (Determination of School District Property Values), which provides the comptroller with the authority to adopt rules governing the conduct of the property value study after consultation with the Comptroller's Property Tax Administration Advisory Board, and under Government Code, §403.303 (Protest), which provides the comptroller with the authority to adopt rules governing the conduct of protest hearings related to the property value study.

The repeal implements Government Code, §403.302 (Determination of School District Property Values) and §403.303 (Protests).

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 6, 2020.

TRD-202001798

Victoria North

Chief Counsel Fiscal and Agency Affairs Legal Services Division

Comptroller of Public Accounts

Effective date: May 26, 2020

Proposal publication date: February 14, 2020

For further information, please call: (512) 475-2220


34 TAC §9.103

The Comptroller of Public Accounts adopts new §9.103, concerning audit of total taxable value of property in a school district, with changes to the proposed text as published in the February 14, 2020, issue of the Texas Register (45 TexReg 998). The rule will be republished.

The comptroller repeals existing §9.103, concerning audits of school district taxable property value, in order to reorganize the rule and update the rule to be consistent with statutes. The comptroller adopts new §9.103 to clarify definitions, identify required submissions, clarify deadlines, update references and remove the requirement to adopt audit forms by rule. The comptroller also adopts this new section to better organize the information in the current section.

The comptroller received written comments from: Ms. Sandra Griffin, with Perdue, Brandon, Fielder, Collins & Mott, LLP; Mr. Steve Bird and Mr. Chris Young of Linebarger, Goggan, Blair & Sampson, LLP; Ms. Robin Willim, with Tarrant Appraisal District; Ms. Missy Pope, of Pope Audit Group, LLC; Mr. Steve Wise, with Dallas Central Appraisal District; Mr. Daniel Combs, with Alvin Independent School District; Mr. Rostam Kavoussi, of Linebarger, Goggan, Blair & Sampson, LLP on behalf of Alamo Heights ISD, East Central ISD, Fredericksburg ISD, Harlandale ISD, Medina Valley ISD, North East ISD, Northside ISD, and Southwest ISD; Mr. John Passero, Sr.; and Mr. Andrew Peters of Caldwell ISD.

Subsection (a) defines relevant terms and phrases, including clarified definitions from the existing §9.103 and new definitions for terms which appear in the existing section but were not defined therein.

Subsection (b) identifies the procedures and required submissions for a request for audit received from a school district. Paragraphs (1)(A) through (E) list the required forms by name and number and paragraph (1)(F) describes the summary or recapitulation of information from the local appraisal roll for the requesting school district.

Ms. Sandra Griffin requested retaining language from current subsection (b) or adding language to new subsection (b) only requiring additional forms for schools that have value loss under Tax Code, §33.06 or §33.065, participate in Tax Increment Financing, or have Chapter 313 Agreements.

The forms required by subsection (b) report statutorily required deductions enumerated to determine taxable value as set forth in Government Code, §403.302(d). Without the forms required under subsection (b), the comptroller cannot distinguish between a complete or incomplete request without seeking additional information upon receipt of a request for school district taxable value audit. The comptroller instead amends new subsection (b) by adding paragraph (2) allowing school districts to submit a signed affirmative statement that the district has zero value to report on the required forms, providing documentation for the determination of the completeness of a request.

Mr. Steve Bird and Mr. Chris Young provided comments on subsection (b) asserting that discretion on the part of the director to exclude some of the six items required by subsection (b) is an apparent acknowledgment of discretion in Government Code, §403.302 to change the scope of an audit.

Mr. Bird and Mr. Young also commented that subsection (b) lacks clarity as to when and how the director's discretion will be utilized and provides no guidelines as to under what conditions the director may or may not grant a request to exclude such information.

The discretion afforded the director in proposed new subsection (b) was discretion for reporting requirements, not discretion in the statutory scope of an audit of the statutorily required determination of total taxable value of all property in each school district. The comptroller amends new subsection (b) to remove this language.

Ms. Robin Willim posed a question on subsection (b) as to whether the requirements of subsection (b) would apply to school districts that do not have a TIF (Form 50-755) or Chapter 313 (Form 50-767). As previously addressed, the comptroller amends new subsection (b) to allow school districts to submit a signed affirmative statement that the district has zero value to report on the required forms, providing documentation for the determination of the completeness of a request.

Subsection (c) identifies the procedures and required submissions for a request for audit received from the Commissioner of Education.

Subsection (d) identifies the deadlines for submitting a request for audit in accordance with Government Code, §403.302(h). This subsection explains the process for certifying a material reduction in taxable value in response to stakeholder concerns received. This subsection clarifies that the superintendent, or other individual authorized by the school district, makes the determination of a material reduction in the total taxable value of property in a school district.

Ms. Griffin commented that paragraph (2) states that a request for an audit "must" be filed not later than one year from a chief appraiser's change to the appraisal roll under Tax Code, §25.25 or §42.41. Ms. Griffin recommends changing the language in paragraph (2) from "must" to "may".

The comptroller agrees to make this change.

Ms. Griffin further recommends adding the phrase, "In addition to the deadline in (d)(1)..." to the beginning of paragraph (2). The comptroller instead amends the language of paragraph (1) to include the phrase, "Except as otherwise provided by this subsection...", to stay consistent with the statutory language of Government Code, §403.302(h).

Ms. Griffin also requested that the comptroller draft the new rule to continue a practice of not requiring a full audit when a school district is requesting a change based on reductions resulting from a lawsuit or a Tax Code, §25.25 correction. Similarly, Mr. Bird and Mr. Young comments indicate disagreement with requiring a complete audit for value changes that are a result of Tax Code, §25.25 or §42.41 changes.

Government Code, §403.302(h) requires an audit of the total taxable value of property in a school district. Mr. Bird and Mr. Young assert the use of the term "may" in Government Code, §403.302(h) indicates an intent by the legislature for the comptroller to have discretion in the implementation of the audit process. The discretion afforded the comptroller is whether to conduct an audit upon receiving a valid request, not discretion as to the scope of the audit. Reduction in a school district's total taxable value resulting from a lawsuit or a Tax Code, §25.25 correction is included in an audit of total taxable value. The comptroller declines to amend the rule to permit a partial audit.

Mr. Bird and Mr. Young expressed concern that full, complete audits are lengthy, complex processes and by requiring an audit of total taxable value, the comptroller places undue restriction on a district's ability to adequately respond to Tax Code, §25.25 or §42.41 changes. Since the scope of the audit is statutory, these concerns are best addressed through legislative amendments and not rulemaking authority.

Mr. Bird and Mr. Young also commented that the proposed changes to §9.103 could potentially have a significant fiscal impact on school districts and that the result fails to meet the minimum standards required by Government Code, §2001.024(a)(4) and (5) and §2006.002.

There is no change between the current §9.103, to be repealed, and new §9.103 concerning the scope of an audit requested pursuant to Government Code, §403.302. Nowhere in current §9.103 or new §9.103 is anything less than or in addition to an audit of total taxable value authorized or addressed.

Subsection (e) provides a maximum number of requests for audit, based on logistical and administrative limits, which may be submitted to the division relating to the same school district and the same study year.

Subsection (f) provides the methods of delivery for requests and the required submissions for taxable value audits. Paragraphs (1) through (4) list the methods specifically.

Subsection (g) states specific circumstances for rejection of a request for audit.

Subsection (h) states the consequences of providing incomplete submissions and the ability to resubmit a request for audit. Paragraphs (1) and (2) detail how the comptroller will count incomplete submissions and resubmissions in calculating the number of requests for audit relating to the same school district for the same study year, under subsection (e).

Ms. Griffin commented that new subsection (h) would make an incomplete audit count as one audit, and any resubmission or additional information count as a second audit. Ms. Griffin commented that this would deprive a school district of funding due to technical errors in submission of an audit which could be easily cured. Ms. Griffin requested that the comptroller amend the proposed rule to allow an amendment or addition to an audit request to be counted as one audit, or in the alternative, add a definition for an "incomplete submission" to allow reasonable opportunity to supplement a pending audit without counting it as an additional audit request. The comptroller agrees to add a definition for an "incomplete submission" described in more detail below.

Mr. Andrew Peters provided comments regarding §9.103 stating the rule appears to limit or remove the ability for school districts to correct information. Mr. Steve Wise provided separate comments concerning subsection (h) stating he disagreed with counting an audit submitted but rejected as an audit for purposes of subsection (e) (limiting number of requests submitted under subsection (d)(1)). Mr. Wise commented that subsection (h)(1) and (2) could penalize school districts by not allowing them to have three taxable value audits due to some unforeseen technicality. Mr. Wise commented that if a submission is incorrect, some reasonable amount of time should be given to remedy the problem. Mr. Wise commented that a particular submission should only be counted when it is fully adjudicated.

As previously addressed, the comptroller amends subsection (h) to add a definition for an "incomplete submission" to minimize the number of incomplete submissions from any particular school district. Subsection (h) refers to subsection (e) which provides a maximum number of requests for audits submitted under the time constraints of subsection (d)(1), which in turn is based on logistical and administrative limits. There is no maximum number of requests in §9.103 for requests for audits submitted under subsection (d)(2).

Subsection (i) provides the ability to require additional information, if necessary, to complete an audit. This subsection clarifies the language found in subsection (g) of the current section, which the comptroller has repealed. Paragraphs (1) and (2) provide timelines for response, reducing the response and extension time period from 30 days in the current subsection (g) to 15 days.

Ms. Griffin, Ms. Missy Pope and Mr. Wise provided separate comments regarding subsection (i) concerning the reduction in days to respond to a request from the comptroller for additional information. Current subsection (g) allows thirty days to respond to a request from the comptroller for additional information. Proposed subsection (i) allowed fifteen days to respond to a request from the comptroller for additional information. The comptroller agrees to amend the timeframe to provide additional information to thirty days.

Ms. Pope requested the comptroller add a provision to create a timeframe for the comptroller's processing of audit requests and add a requirement that the comptroller process audit requests in the order in which they are received.

Government Code, §403.302 does not provide a timeframe for completion of an audit. Similarly, the statute does not require that the comptroller process audits in the order in which received. The statute does, however, provide the comptroller discretion to decide whether to conduct an audit. The comptroller declines to include a timeframe or order for audit processing. These restrictions could have an unintended consequence of requiring the comptroller to use its discretion to not conduct an audit if the logistical and administrative limits for prevent timely completion. The comptroller will continue its practice of providing a practical timeframe for completion of each request for an audit and processing audits in the order they are received.

Subsection (j) addresses the conduct of the audit to include the ability of comptroller staff to accept nominal inconsistencies in numerical documentation, reject numerical documentation that leads to unreasonable results and for the examination, inspection or review of information in person. This subsection clarifies and amends subsection (i) of the current section, which the comptroller has repealed.

Subsection (k) addresses the ability to withdraw a request for audit. This subsection clarifies language found in subsection (k) of the current section, which the comptroller has repealed.

Subsection (l) addresses the completion of an audit, certification of the findings of the audit by the comptroller, and the ability to protest the findings. This subsection clarifies language found in subsection (l) of the current section, which the comptroller has repealed.

Mr. Rostam Kavoussi commented on subsection (l) stating it has omitted a provision for certified preliminary taxable value audit findings found in current §9.103(l). The comptroller declines to amend subsection (l) because certification of a preliminary audit finding is not required or authorized by Government Code, §403.302(h). Additionally, the code section does require certification of audit findings to the commissioner of education. Government Code, §403.303(a) authorizes protests of the certified audit findings and procedures to protest audit findings are found under 34 TAC §§9.4301 - 9.4317.

Subsection (m) addresses the availability of the forms identified in the section on the comptroller's website, or through the Property Tax Assistance Division of the Comptroller of Public Accounts. Subsection (m) also provides that the forms may be revised at the discretion of the comptroller.

General comments were provided by Mr. Daniel Combs in regard to House Bill 3, 89th Legislature, 2019. Mr. Combs expressed concerns with the timing of the proposed rule given significant changes to school finance in House Bill 3 and unknowns surrounding the change to current year values. Mr. Combs requested consideration of the timing of the rule change as it may limit the opportunity to correct unforeseen variances and financial impacts related to value.

New §9.103 complies with the statutory authority for an audit of total taxable value of property in a school district found in Government Code, §403.302(h). The timing of the findings required by Government Code, §403.302 and the authority and requirements for an audit found in subsection (h) of that section were not changed during the 89th Legislature.

General comments were provided by Mr. John R. Passero, Jr. stating there should be no repeal.

The comptroller is repealing existing §9.103 and adopting new §9.103 to clarify definitions, identify required submissions, clarify deadlines, update references, remove the requirement to adopt audit forms by rule, and better organize information.

The comptroller adopts the new section under Government Code, §403.302, which provides the comptroller with the authority to adopt rules governing the conduct of the property value study after consultation with the Comptroller's Property Tax Administration Advisory Board, and under Government Code, §403.303 (Protests), which provides the comptroller with the authority to adopt rules governing the conduct of protest hearings related to the property value study.

The new section implements Government Code, §403.302 (Determination of School District Property Values) and §403.303 (Protests).

§9.103.Audit of Total Taxable Value of Property in a School District.

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Agent--A duly authorized individual designated to act as agent on behalf of a school district for the purpose of filing a request for audit pursuant to this section.

(2) Commissioner--The Texas Commissioner of Education.

(3) Comptroller--The Texas Comptroller of Public Accounts.

(4) Director--The director of the Property Tax Assistance Division.

(5) Division--The Property Tax Assistance Division of the office of the comptroller.

(6) Effective date--A single date designated in a request for audit for which all values and other reported information are submitted for an audit under Government Code, §403.302(h) (Determination of School District Property Values).

(7) Property value study or study--A study conducted by the comptroller pursuant to Government Code, §403.302.

(8) Request for audit or request--A request for an audit filed with the division pursuant to Government Code, §403.302(h).

(9) Study year--A tax year, as defined by Tax Code, §1.04(13) (Definitions), for which the comptroller has conducted a study, or is conducting a study.

(10) Taxable value--The "taxable value" as defined by Government Code, §403.302(d).

(11) Taxable value audit or audit--An examination, inspection and review of the total taxable value of property in a school district conducted pursuant to Government Code, §403.302(h).

(b) Requests from school districts.

(1) A school district may request an audit of the total taxable value of property in the school district. A school district must make the request for audit by submitting a Request for School District Taxable Value Audit (Form 50-302) to the director, in writing, with a stated effective date and must include the following:

(A) School District Report of Property Value (Form 50-108);

(B) Report of Value Lost Because of the School Tax Limitation on Homesteads of the Elderly/Disabled (Form 50-253);

(C) Report of Value Lost Because of Deferred Tax Collections Under Tax Code, §33.06 and §33.065 (Form 50-851);

(D) Report of Value Lost Because of School District Participation in Tax Increment Financing (TIF) (Form 50-755);

(E) Report of Value Lost Because of Value Limitations Under Tax Code, Chapter 313 (Form 50-767); and

(F) An automated or computer-generated summary of appraisal roll information that:

(i) is certified in accordance with Tax Code, §26.01 (Submission of Rolls to Taxing Units) by the chief appraiser who appraises property for the requesting school district;

(ii) is produced by the certifying chief appraiser or a taxing unit that collects for the school district; and

(iii) reports values with the same effective date as, and matching each value shown as a line item on, the School District Report of Value (Form 50-108).

(2) In lieu of the Report of Value Lost Because of Deferred Tax Collections Under Tax Code §33.06 and §33.065 (Form 50-851), or the Report of Value Lost Because of School District Participation in Tax Increment Financing (TIF) (Form 50-755), or the Report of Value Lost Because of Value Limitations Under Tax Code, Chapter 313 (Form 50-767), the school district may provide a written, signed affirmative statement that the school district has $-0- of lost value to report on the form or forms. The statement must list each form by title and be signed by the superintendent of the school district or the school district's properly designated agent.

(c) Requests from the commissioner. The commissioner may request an audit of any school district's total taxable value. The commissioner must make the request for audit in writing, with a stated effective date, and submit the request to the director. The request must be signed by the commissioner. A school district subject to a request for audit from the commissioner must submit all documentation required under subsection (b)(1) - (2) of this section within 30 days of notification by the division that an audit has been requested.

(d) Deadlines for filing requests.

(1) Except as otherwise provided in this subsection, a request for audit must be filed with the division not later than the third anniversary of the date of the final certification of the property value study findings for the study year subject to the request for audit.

(2) If the chief appraiser corrects the appraisal roll under Tax Code, §25.25 (Correction of Appraisal Roll) or §42.41 (Correction of Rolls), and the change to the appraisal roll results in a material reduction in the total taxable value of property in the school district, then the request for audit may be filed with the division not later than the first anniversary of the date the chief appraiser certified the change to the appraisal roll under Tax Code, §25.25 or §42.41. For purposes of this subsection, a reduction in the total taxable value of property in a school district is considered a material reduction if the superintendent, or other individual authorized by the school district with specific knowledge of the school district's finances, signs a written statement certifying that the correction to the appraisal roll results in a material reduction in the total taxable value of property in the school district.

(e) Number of requests. For the purpose of audits subject to the deadline prescribed by subsection (d)(1) of this section, up to three separate requests for audit pertaining to the same school district and study year may be submitted at any time before the deadline.

(f) Methods of delivery for requests. The requestor is responsible for verifying receipt by the division regardless of the method of delivery. A request for audit may be submitted to the division as follows:

(1) by personal delivery at 1711 San Jacinto Blvd., Third Floor, Austin, Texas 78701;

(2) by United States Postal Service, regular first-class mail, properly addressed with postage prepaid and bearing a post office cancellation mark on or before the applicable deadline for a request under subsection (d) of this section;

(3) by common or contract carrier in a properly addressed envelope or package, bearing a receipt mark on or before the applicable deadline for a request for audit under subsection (d) of this section; or

(4) electronically, via email sent to and received by ptad.audit@cpa.texas.gov with the title "AUDIT REQUEST" in the subject line. A file transfer protocol ("FTP") is available if requested in the email.

(g) Rejection of requests. The division may reject a request for audit if:

(1) the request does not meet the requirements of this section;

(2) the request omits or fails to complete any item required in subsection (b) of this section;

(3) the request fails to meet the deadlines prescribed by subsection (d) of this section;

(4) the request raises an issue previously determined in a protest of preliminary findings of value;

(5) the request asks for revisions that duplicate revisions requested in a previous audit for which the comptroller has certified a final audit finding under Government Code, §403.302(h); or

(6) the request involves a study year for which the relevant comptroller records do not exist or cannot be retrieved or replicated.

(h) Incomplete submissions and resubmissions of requests. A request for an audit submitted to the division which omits a required item listed in subsection (b) of this section is an incomplete submission. A request that is rejected based on an incomplete submission may be brought into compliance and resubmitted before the applicable deadlines prescribed in subsection (d) of this section.

(1) A request that is rejected based on an incomplete submission shall be counted as a request for audit for purposes of subsection (e) of this section.

(2) A request that is resubmitted shall be counted as a new request for audit for the purposes of subsection (e) of this section.

(i) Additional information. The director may require additional information from the school district, its appraisal district, or any other source as needed to complete the taxable value audit. The director shall provide written notice of the requirement for additional information.

(1) If the school district or its appraisal district does not provide the additional information requested by the director within 30 days, plus any applicable period of extension, the director may deny any adjustments related to the additional information.

(2) Upon the written request of the school district or its appraisal district, the 30 day period may be extended for an additional 15 days if the school district or its appraisal district cannot obtain the information for reasons outside of the school district's or its appraisal district's control, and the school district or its appraisal district reports the reasons in the written request for extension.

(j) Conduct of the examination, inspection and review. Division staff may accept numerical documentation with nominal internal inconsistencies, reject numerical documentation that leads to unreasonable results, and otherwise exercise sound judgment in arriving at the most accurate total taxable value for the school district. Division staff may conduct the taxable value audit by examining, inspecting or reviewing the required documentation submitted with the request for audit, or may include an examination, inspection and review of the relevant information in person at the tax office, appraisal office, or any other public office.

(k) Withdrawal of request. A request for audit may be withdrawn at any time before the comptroller certifies the audit findings.

(l) Certification of findings and protest. After considering all the relevant information submitted by the school district and other reliable sources, division staff shall recalculate the school district's total taxable value. Upon the determination of the findings of the audit, the comptroller shall certify the findings to the commissioner in accordance with Government Code, §403.302(h). A school district, or a property owner whose property is included in the audit under Government Code, §403.302(h) and whose tax liability on the property is $100,000 or more, may protest the audit findings pursuant to Subchapter L of this chapter.

(m) Forms for audit request. The forms identified in this section are available on the comptroller's website or may be obtained from the Comptroller of Public Accounts, Property Tax Assistance Division, P.O. Box 13528, Austin, Texas 78711-3528. These forms may be revised at the discretion of the comptroller.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 6, 2020.

TRD-202001801

Victoria North

Chief Counsel Fiscal and Agency Affairs Legal Services Division

Comptroller of Public Accounts

Effective date: May 26, 2020

Proposal publication date: February 14, 2020

For further information, please call: (512) 475-2220