S.B. No. 636
 
 
 
 
AN ACT
  relating to the imposition of the franchise tax and local sales and
  use taxes, including the authority of a county or other local
  governmental entity to receive local sales tax information.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subsection (c), Section 151.027, Tax Code, is
  amended to read as follows:
         (c)  This section does not prohibit:
               (1)  the examination of information, if authorized by
  the comptroller, by another state officer or law enforcement
  officer, by a tax official of another state, by a tax official of
  the United Mexican States, or by an official of the United States if
  a reciprocal agreement exists;
               (2)  the delivery to a taxpayer, or a taxpayer's
  authorized representative, of a copy of a report or other paper
  filed by the taxpayer under this chapter;
               (3)  the publication of statistics classified to
  prevent the identification of a particular report or items in a
  particular report;
               (4)  the use of records, reports, or information
  secured, derived, or obtained by the attorney general or the
  comptroller in an action under this chapter against the same
  taxpayer who furnished the information;
               (5)  the delivery to a successor, receiver, executor,
  administrator, assignee, or guarantor of a taxpayer of information
  about items included in the measure and amounts of any unpaid tax or
  amounts of tax, penalties, and interest required to be collected;
               (6)  the delivery of information to a municipality,
  county, or other local governmental entity [an eligible
  municipality] in accordance with Section 321.3022, 322.2022, or
  323.3022; or
               (7)  the release of information in or derived from a
  record, report, or other instrument required to be furnished under
  this chapter by a governmental body, as that term is defined in
  Section 552.003, Government Code.
         SECTION 2.  Subchapter C, Chapter 151, Tax Code, is amended
  by adding Section 151.0565 to read as follows:
         Sec. 151.0565.  TAXABLE ITEMS SOLD OR PROVIDED UNDER
  DESTINATION MANAGEMENT SERVICES CONTRACTS. (a)  In this section:
               (1)  "Destination management services" means the
  following services when provided under a qualified destination
  management services contract:
                     (A)  transportation management;
                     (B)  booking and managing entertainers;
                     (C)  coordination of tours or recreational
  activities;
                     (D)  meeting, conference, or event registration;
                     (E)  meeting, conference, or event staffing;
                     (F)  event management; and
                     (G)  meal coordination.
               (2)  "Qualified destination management company" means
  a business entity that:
                     (A)  is incorporated or is a limited liability
  company;
                     (B)  receives at least 80 percent of the entity's
  annual total revenue from providing or arranging for the provision
  of destination management services;
                     (C)  maintains a permanent nonresidential office
  from which the destination management services are provided or
  arranged;
                     (D)  has at least three full-time employees;
                     (E)  spends at least one percent of the entity's
  annual gross receipts to market the destinations with respect to
  which destination management services are provided;
                     (F)  has at least 80 percent of the entity's
  clients described by Subdivision (3)(A) located outside this state;
                     (G)  other than office equipment used in the
  conduct of the entity's business, does not own equipment used to
  directly provide destination management services, including motor
  coaches, limousines, sedans, dance floors, decorative props,
  lighting, podiums, sound or video equipment, or equipment for
  catered meals;
                     (H)  is not doing business as a caterer;
                     (I)  does not provide services for weddings;
                     (J)  does not own a venue at which events or
  activities for which destination management services are provided
  occur; and
                     (K)  is not a subsidiary of another entity that,
  and is not a member of an affiliated group, as that term is defined
  by Section 171.0001, another member of which:
                           (i)  is doing business as, or owns or
  operates another entity doing business as, a caterer; or
                           (ii)  owns or operates a venue described by
  Paragraph (J).
               (3)  "Qualified destination management services
  contract" means a contract under which at least three of the
  destination management services listed in Subdivision (1) are
  provided:
                     (A)  in this state to a client that is not an
  individual and that:
                           (i)  is a corporation, partnership, limited
  liability company, trade association, or other business entity,
  other than a social club or fraternal organization;
                           (ii)  has its principal place of business
  outside the county where the destination management services are to
  be provided; and
                           (iii)  agrees to pay the qualified
  destination management company for all destination management
  services provided to the client under the terms of the contract; and
                     (B)  by a qualified destination management
  company that pays or accrues liability for the payment of taxes
  imposed by this chapter on purchases of taxable items that will be
  consumed or used by the company in performing the contract.
         (b)  A qualified destination management company is the
  consumer of taxable items sold or otherwise provided under a
  qualified destination management services contract, and the
  destination management services provided under the contract are not
  considered taxable services, as that term is defined by Section
  151.0101.
         SECTION 3.  (a)  Section 171.1011, Tax Code, is amended by
  adding Subsection (g-6) to read as follows:
         (g-6)  A taxable entity that is a qualified destination
  management company as defined by Section 151.0565 shall exclude
  from its total revenue, to the extent included under Subsection
  (c)(1)(A), (c)(2)(A), or (c)(3), payments made to other persons to
  provide services, labor, or materials in connection with the
  provision of destination management services as defined by Section
  151.0565.
         (b)  This section applies only to a report originally due on
  or after the effective date of this section.
         (c)  Notwithstanding any other provision of this Act, this
  section takes effect January 1, 2010.
         SECTION 4.  Subdivision (3), Subsection (a), Section
  321.002, Tax Code, is amended to read as follows:
               (3)  "Place of business of the retailer" means an
  established outlet, office, or location operated by the retailer or
  the retailer's agent or employee for the purpose of receiving
  orders for taxable items and includes any location at which three or
  more orders are received by the retailer during a calendar year. A
  warehouse, storage yard, or manufacturing plant is not a "place of
  business of the retailer" unless at least three orders are received
  by the retailer during the calendar year at the warehouse, storage
  yard, or manufacturing plant. An outlet, office, facility, or
  location that contracts with a retail or commercial business
  engaged in activities to which this chapter applies to process for
  that business invoices or bills of lading onto which sales tax is
  added is not a "place of business of the retailer" if the
  comptroller determines that the outlet, office, facility, or
  location functions or exists to avoid the tax imposed by this
  chapter or to rebate a portion of the tax imposed by this chapter to
  the contracting business. Notwithstanding any other provision of
  this subdivision, a kiosk is not a "place of business of the
  retailer."  In this subdivision, "kiosk" means a small stand-alone
  area or structure that:
                     (A)  is used solely to display merchandise or to
  submit orders for taxable items from a data entry device, or both;
                     (B)  is located entirely within a location that is
  a place of business of another retailer, such as a department store
  or shopping mall; and
                     (C)  at which taxable items are not available for
  immediate delivery to a customer.
         SECTION 5.  Section 321.203, Tax Code, is amended by
  amending Subsections (c) and (d) and adding Subsections (c-1),
  (c-2), and (c-3) to read as follows:
         (c)  If a retailer has more than one place of business in this
  state, each [a] sale of each [a] taxable item by the retailer is
  consummated at the [retailer's] place of business of the retailer
  in this state where the retailer first receives the order, provided
  that the order is placed in person by the purchaser or lessee of the
  taxable item at the place of business of the retailer in this state
  where the retailer first receives the order.
         (c-1)  If the retailer has more than one place of business in
  this state and Subsection (c) does not apply, the sale is
  consummated at the place of business of the retailer in this state:
               (1)  from which the retailer ships or delivers the
  item, if the retailer ships or delivers the item to a point
  designated by the purchaser or lessee; or
               (2)  where the purchaser or lessee takes possession of
  and removes the item, if the purchaser or lessee takes possession of
  and removes the item from a place of business of the retailer.
         (c-2)  Subsection (c) does not apply if:
               (1)  the taxable item is shipped or delivered from a
  warehouse:
                     (A)  that is a place of business of the retailer;
                     (B)  in relation to which the retailer has an
  economic development agreement with:
                           (i)  the municipality in which the warehouse
  is located that was entered into under Chapter 380, 504, or 505,
  Local Government Code, or a predecessor statute, before January 1,
  2009; or
                           (ii)  the county in which the warehouse is
  located that was entered into under Chapter 381, Local Government
  Code, before January 1, 2009; and
                     (C)  in relation to which the municipality
  provides information relating to the economic development
  agreement as required by Subsection (c-3) by the deadline
  prescribed by that subsection, or, if appropriate, the county
  complies with Section 323.203(c-3) by the deadline prescribed by
  that section; and
               (2)  the place of business of the retailer at which the
  retailer first receives the order in the manner described by
  Subsection (c) is a retail outlet identified in the information
  required by Subsection (c-3) or Section 323.203(c-3) as being
  served by the warehouse on January 1, 2009.
         (c-3)  Not later than September 1, 2009, a municipality that
  has entered into an economic development agreement described by
  Subsection (c-2) shall send to the comptroller information
  prescribed by the comptroller relating to the agreement that
  identifies each warehouse subject to the agreement and each retail
  outlet that, on January 1, 2009, was served by that warehouse. The
  comptroller shall prescribe the manner in which the information
  must be provided. The provision of information to the comptroller
  under this subsection does not affect whether information described
  by this subsection is confidential or excepted from required public
  disclosure. This subsection and Subsection (c-2) expire September
  1, 2014.
         (d)  If the retailer has more than one place of business in
  this state and Subsections (c) and (c-1) do not apply [neither the
  possession of a taxable item is taken at nor shipment or delivery of
  the item is made from the retailer's place of business in this
  state], the sale is consummated at:
               (1)  the [retailer's] place of business of the retailer
  in this state where the order is received; or
               (2)  if the order is not received at a place of business
  of the retailer, the place of business from which the retailer's
  agent or employee who took the order operates.
         SECTION 6.  Section 321.3022, Tax Code, is amended by
  amending Subsections (a), (a-1), (b), (d), (e), (f), (g), (h), and
  (i) and adding Subsection (a-2) to read as follows:
         (a)  In this section, "other local governmental entity" has
  the meaning assigned by Section 321.107.
         (a-1)  Except as otherwise provided by this section, the
  comptroller on request shall provide to a municipality or other
  local governmental entity that has adopted a tax under this
  chapter:
               (1)  information relating to the amount of tax paid to
  the municipality or other local governmental entity under this
  chapter during the preceding or current calendar year by each
  person doing business in the municipality or other local
  governmental entity who annually remits to the comptroller state
  and local sales tax payments of more than $25,000; and
               (2)  any other information as provided by this section.
         (a-2) [(a-1)]  The comptroller on request shall provide to a
  municipality or other local governmental entity that has adopted a
  tax under this chapter and that does not impose an ad valorem tax
  information relating to the amount of tax paid to the municipality
  or other local governmental entity under this chapter during the
  preceding or current calendar year by each person doing business in
  the municipality or other local governmental entity who annually
  remits to the comptroller state and local sales tax payments of more
  than $500.
         (b)  The comptroller on request shall provide to a
  municipality or other local governmental entity that has adopted a
  tax under this chapter information relating to the amount of tax
  paid to the municipality or other local governmental entity under
  this chapter during the preceding or current calendar year by each
  person doing business in an area, as defined by the municipality or
  other local governmental entity, that is part of:
               (1)  an interlocal agreement;
               (2)  a tax abatement agreement;
               (3)  a reinvestment zone;
               (4)  a tax increment financing district;
               (5)  a revenue sharing agreement;
               (6)  an enterprise zone;
               (7)  a neighborhood empowerment zone;
               (8)  any other agreement, zone, or district similar to
  those listed in Subdivisions (1)-(7); or
               (9)  any area defined by the municipality or other
  local governmental entity for the purpose of economic forecasting.
         (d)  If the request for information under Subsection (b)
  involves not more than three persons doing business in the defined
  area who remit taxes under this chapter, the comptroller shall
  refuse to provide the information to the municipality or other
  local governmental entity unless the comptroller receives
  permission from each of the persons allowing the comptroller to
  provide the information to the municipality or other local
  governmental entity as requested.
         (e)  A separate request for information under this section
  must be made in writing by the municipality's mayor or chief
  administrative officer or by the governing body of the other local
  governmental entity each year.
         (f)  Information received by a municipality or other local
  governmental entity under this section is confidential, is not open
  to public inspection, and may be used only for the purpose of
  economic forecasting, for internal auditing of a tax paid to the
  municipality or other local governmental entity under this chapter,
  or for the purpose described in Subsection (g).
         (g)  Information received by a municipality or other local
  governmental entity under Subsection (b) may be used by the
  municipality or other local governmental entity to assist in
  determining revenue sharing under a revenue sharing agreement or
  other similar agreement.
         (h)  The comptroller may set and collect from a municipality
  or other local governmental entity reasonable fees to cover the
  expense of compiling and providing information under this section.
         (i)  Notwithstanding Chapter 551, Government Code, the
  governing body of a municipality or other local governmental
  entity
  third party in an open meeting to receive information or question
  the employees or third party regarding the information received by
  the municipality or other local governmental entity under this
  section.
         SECTION 7.  Subchapter C, Chapter 322, Tax Code, is amended
  by adding Section 322.2022 to read as follows:
         Sec. 322.2022.  TAX INFORMATION. (a)  Except as otherwise
  provided by this section, the comptroller on request shall provide
  to a taxing entity:
               (1)  information relating to the amount of tax paid to
  the entity under this chapter during the preceding or current
  calendar year by each person doing business in the area included in
  the entity who annually remits to the comptroller state and local
  sales tax payments of more than $25,000; and
               (2)  any other information as provided by this section.
         (b)  The comptroller on request shall provide to a taxing
  entity information relating to the amount of tax paid to the entity
  under this chapter during the preceding or current calendar year by
  each person doing business in an area included in the entity, as
  defined by the entity, that is part of:
               (1)  an interlocal agreement;
               (2)  a revenue sharing agreement;
               (3)  any other agreement similar to those listed in
  Subdivisions (1) and (2); or
               (4)  any area defined by the entity for the purpose of
  economic forecasting.
         (c)  The comptroller shall provide the information under
  Subsection (b) as an aggregate total for all persons doing business
  in the defined area without disclosing individual tax payments.
         (d)  If the request for information under Subsection (b)
  involves not more than three persons doing business in the defined
  area who remit taxes under this chapter, the comptroller shall
  refuse to provide the information to the taxing entity unless the
  comptroller receives permission from each of the persons allowing
  the comptroller to provide the information to the entity as
  requested.
         (e)  A separate request for information under this section
  must be made in writing by the governing body of the taxing entity
  each year.
         (f)  Information received by a taxing entity under this
  section is confidential, is not open to public inspection, and may
  be used only for the purpose of economic forecasting, for internal
  auditing of a tax paid to the entity under this chapter, or for the
  purpose described by Subsection (g).
         (g)  Information received by a taxing entity under
  Subsection (b) may be used by the entity to assist in determining
  revenue sharing under a revenue sharing agreement or other similar
  agreement.
         (h)  The comptroller may set and collect from a taxing entity
  reasonable fees to cover the expense of compiling and providing
  information under this section.
         (i)  Notwithstanding Chapter 551, Government Code, the
  governing body of a taxing entity is not required to confer with one
  or more employees or a third party in an open meeting to receive
  information or question the employees or third party regarding the
  information received by the entity under this section.
         SECTION 8.  Section 323.203, Tax Code, is amended by
  amending Subsections (c) and (d) and adding Subsections (c-1),
  (c-2), and (c-3) to read as follows:
         (c)  If a retailer has more than one place of business in this
  state, each [a] sale of each [a] taxable item by the retailer is
  consummated at the [retailer's] place of business of the retailer
  in this state where the retailer first receives the order, provided
  that the order is placed in person by the purchaser or lessee of the
  taxable item at the place of business of the retailer in this state
  where the retailer first receives the order.
         (c-1)  If the retailer has more than one place of business in
  this state and Subsection (c) does not apply, the sale is
  consummated at the place of business of the retailer in this state:
               (1)  from which the retailer ships or delivers the
  item, if the retailer ships or delivers the item to a point
  designated by the purchaser or lessee; or
               (2)  where the purchaser or lessee takes possession of
  and removes the item, if the purchaser or lessee takes possession of
  and removes the item from a place of business of the retailer.
         (c-2)  Subsection (c) does not apply if:
               (1)  the taxable item is shipped or delivered from a
  warehouse:
                     (A)  that is a place of business of the retailer;
                     (B)  in relation to which the retailer has an
  economic development agreement with:
                           (i)  the county in which the warehouse is
  located that was entered into under Chapter 381, Local Government
  Code, before January 1, 2009; or
                           (ii)  the municipality in which the
  warehouse is located that was entered into under Chapter 380, 504,
  or 505, Local Government Code, or a predecessor statute, before
  January 1, 2009; and
                     (C)  in relation to which the county provides
  information relating to the economic development agreement as
  required by Subsection (c-3) by the deadline prescribed by that
  subsection, or, if appropriate, the municipality complies with
  Section 321.203(c-3) by the deadline prescribed by that section;
  and
               (2)  the place of business of the retailer at which the
  retailer first receives the order in the manner described by
  Subsection (c) is a retail outlet identified in the information
  required by Subsection (c-3) or Section 321.203(c-3) as being
  served by the warehouse on January 1, 2009.
         (c-3)  Not later than September 1, 2009, a county that has
  entered into an economic development agreement described by
  Subsection (c-2) shall send to the comptroller information
  prescribed by the comptroller relating to the agreement that
  identifies each warehouse subject to the agreement and each retail
  outlet that, on January 1, 2009, was served by that warehouse. The
  comptroller shall prescribe the manner in which the information
  must be provided. The provision of information to the comptroller
  under this subsection does not affect whether information described
  by this subsection is confidential or excepted from required public
  disclosure. This subsection and Subsection (c-2) expire September
  1, 2014.
         (d)  If the retailer has more than one place of business in
  this state and Subsections (c) and (c-1) do not apply [neither the
  possession of a taxable item is taken at nor shipment or delivery of
  the item is made from the retailer's place of business in this
  state], the sale is consummated at:
               (1)  the [retailer's] place of business of the retailer
  in this state where the order is received; or
               (2)  if the order is not received at a place of business
  of the retailer, the place of business from which the retailer's
  agent or employee who took the order operates.
         SECTION 9.  Subchapter D, Chapter 323, Tax Code, is amended
  by adding Section 323.3022 to read as follows:
         Sec. 323.3022.  TAX INFORMATION. (a)  In this section,
  "other local governmental entity" includes any governmental entity
  created by the legislature that has a limited purpose or function,
  that has a defined or restricted geographic territory, and that is
  authorized by law to impose a local sales and use tax the
  imposition, computation, administration, enforcement, and
  collection of which is governed by this chapter.
         (b)  Except as otherwise provided by this section, the
  comptroller on request shall provide to a county or other local
  governmental entity that has adopted a tax under this chapter:
               (1)  information relating to the amount of tax paid to
  the county or other local governmental entity under this chapter
  during the preceding or current calendar year by each person doing
  business in the county or other local governmental entity who
  annually remits to the comptroller state and local sales tax
  payments of more than $25,000; and
               (2)  any other information as provided by this section.
         (c)  The comptroller on request shall provide to a county or
  other local governmental entity that has adopted a tax under this
  chapter information relating to the amount of tax paid to the county
  or other local governmental entity under this chapter during the
  preceding or current calendar year by each person doing business in
  an area, as defined by the county or other local governmental
  entity, that is part of:
               (1)  an interlocal agreement;
               (2)  a tax abatement agreement;
               (3)  a reinvestment zone;
               (4)  a tax increment financing district;
               (5)  a revenue sharing agreement;
               (6)  an enterprise zone;
               (7)  any other agreement, zone, or district similar to
  those listed in Subdivisions (1)-(6); or
               (8)  any area defined by the county or other local
  governmental entity for the purpose of economic forecasting.
         (d)  The comptroller shall provide the information under
  Subsection (c) as an aggregate total for all persons doing business
  in the defined area without disclosing individual tax payments.
         (e)  If the request for information under Subsection (c)
  involves not more than three persons doing business in the defined
  area who remit taxes under this chapter, the comptroller shall
  refuse to provide the information to the county or other local
  governmental entity unless the comptroller receives permission
  from each of the persons allowing the comptroller to provide the
  information to the county or other local governmental entity as
  requested.
         (f)  A separate request for information under this section
  must be made in writing each year by the county judge or the
  governing body of the other local governmental entity.
         (g)  Information received by a county or other local
  governmental entity under this section is confidential, is not open
  to public inspection, and may be used only for the purpose of
  economic forecasting, for internal auditing of a tax paid to the
  county or other local governmental entity under this chapter, or
  for the purpose described by Subsection (h).
         (h)  Information received by a county or other local
  governmental entity under Subsection (c) may be used by the county
  or other local governmental entity to assist in determining revenue
  sharing under a revenue sharing agreement or other similar
  agreement.
         (i)  The comptroller may set and collect from a county or
  other local governmental entity reasonable fees to cover the
  expense of compiling and providing information under this section.
         (j)  Notwithstanding Chapter 551, Government Code, the
  commissioners court of a county or the governing body of the other
  local governmental entity is not required to confer with one or more
  employees or a third party in an open meeting to receive information
  or question the employees or third party regarding the information
  received by the county or other local governmental entity under
  this section.
         SECTION 10.  The change in law made by this Act does not
  affect tax liability accruing before the effective date of this
  Act. That liability continues in effect as if this Act had not been
  enacted, and the former law is continued in effect for the
  collection of taxes due and for civil and criminal enforcement of
  the liability for those taxes.
         SECTION 11.  Sections 321.203 and 323.203, Tax Code, as
  amended by this Act, take effect immediately if this Act receives a
  vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution. If this
  Act does not receive the vote necessary for immediate effect,
  Sections 321.203 and 323.203, Tax Code, as amended by this Act, take
  effect August 31, 2009.
         SECTION 12.  Except as otherwise provided by this Act, this
  Act takes effect September 1, 2009.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 636 passed the Senate on
  April 21, 2009, by the following vote: Yeas 30, Nays 0; and that
  the Senate concurred in House amendments on June 1, 2009, by the
  following vote: Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 636 passed the House, with
  amendments, on May 25, 2009, by the following vote: Yeas 143,
  Nays 0, one present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor