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  82R13652 T
 
  By: Harper-Brown H.B. No. 2719
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the clarification of the circumstances under which a
  retailer is considered to be engaged in business in this state, and
  the information required to be provided by certain retailers, for
  purposes of the collection of sales and use taxes.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 151.024, Tax Code, is amended to read as
  follows:
         Sec. 151.024.  PERSONS WHO MAY BE REGARDED AS RETAILERS. (a)
  If the comptroller determines that it is necessary for the
  efficient administration of this chapter to regard a salesperson
  [salesman], representative, peddler, or canvasser as the agent of a
  dealer, distributor, supervisor, or employer under whom the person
  [he] operates or from whom the person [he] obtains the tangible
  personal property that the person [he] sells, whether or not the
  sale is made in the person's [his] own behalf or for the dealer,
  distributor, supervisor, or employer, the comptroller may so regard
  the salesperson [salesman], representative, peddler, or canvasser,
  and may regard the dealer, distributor, supervisor, or employer as
  a retailer or seller for the purpose of this chapter.
         (b)  A dealer, distributor, supervisor, or employer may not
  be regarded under this section as a retailer or seller for the
  purpose of this chapter if the dealer, distributor, supervisor, or
  employer directly or indirectly, or through a subsidiary,
  affiliate, or agent by whatever name, maintains, occupies,
  operates, or uses, permanently or temporarily, only:
               (1)  a fulfillment center as described by Section
  151.107(i); or
               (2)  a computer server.
         SECTION 2.  Subchapter B, Chapter 151, Tax Code, is amended
  by adding Section 151.028 to read as follows:
         Sec. 151.028.  INFORMATION NOT REQUIRED FROM CERTAIN
  RETAILERS. The comptroller or any other official or agency of this
  state may not require for purposes of this chapter a retailer that
  is not engaged in business in this state to:
               (1)  file any report, statement, or other information
  regarding purchases made by customers in this state; or
               (2)  send to a customer in this state any type of notice
  regarding the customer's purchase.
         SECTION 3.  Section 151.107, Tax Code, is amended by
  amending Subsection (a) and adding Subsections (f), (g), (h), and
  (i) to read as follows:
         (a)  Except as otherwise provided by this section, for [For]
  the purpose of this subchapter and in relation to the use tax, a
  retailer is engaged in business in this state if the retailer:
               (1)  maintains, occupies, or uses in this state
  permanently, temporarily, directly, or indirectly or through a
  subsidiary or agent by whatever name, an office, place of
  distribution, sales or sample room or place, warehouse, storage
  place, or any other place of business;
               (2)  has a representative, agent, salesperson
  [salesman], canvasser, or solicitor operating in this state under
  the authority of the retailer or its subsidiary for the purpose of
  selling or delivering or the taking of orders for a taxable item;
               (3)  derives rentals from a lease of tangible personal
  property situated in this state;
               (4)  engages in regular or systematic solicitation of
  sales of taxable items in this state by the distribution of
  catalogs, periodicals, advertising flyers, or other advertising,
  by means of print, radio, or television media, or by mail,
  telegraphy, telephone, computer data base, cable, optic,
  microwave, or other communication system for the purpose of
  effecting sales of taxable items;
               (5)  solicits orders for taxable items by mail or
  through other media and under federal law is subject to or permitted
  to be made subject to the jurisdiction of this state for purposes of
  collecting the taxes imposed by this chapter;
               (6)  has a franchisee or licensee operating under its
  trade name if the franchisee or licensee is required to collect the
  tax under this section; or
               (7)  otherwise does business in this state.
         (f)  A retailer whose physical presence in this state is
  attributable to the maintenance, occupation, operation, or use by
  the retailer indirectly, or through the retailer's subsidiary,
  affiliate, or agent by whatever name, of an office, place of
  distribution, sales or sample room or place, warehouse, storage
  place, or any other place of business in this state is engaged in
  business in this state as provided by Subsection (a)(1) only if:
               (1)  the place of business in this state is a physical
  location that is open to the public for the sale of goods at retail;
  and
               (2)  at least one of the following activities is
  performed on the retailer's behalf at that place of business:
                     (A)  promotion of the retailer's business, such as
  distributing the retailer's coupons or compiling the retailer's
  mailing list, except that making the retailer's catalog available
  for use as a reference or providing the catalog to a customer in
  this state at the customer's request is not considered promotion of
  the business;
                     (B)  acceptance of returns or exchanges of, or
  credits for, merchandise purchased from or through the retailer;
                     (C)  maintenance of telephone or Internet kiosks
  that allow customers to access inventory and purchase merchandise
  from or through the retailer; or
                     (D)  acceptance or placement of customers' orders
  with the retailer if a product is unavailable at the place of
  business.
         (g)  Notwithstanding any other law, a retailer is not
  considered to be engaged in business in this state if the retailer's
  physical presence in this state is attributable to:
               (1)  the maintenance, occupation, operation, or use in
  this state permanently, temporarily, directly, or indirectly or
  through a subsidiary, affiliate, or agent by whatever name, of a
  fulfillment center;
               (2)  the ownership of tangible personal property
  located on the premises of a fulfillment center described by
  Subdivision (1); or
               (3)  the maintenance, occupation, operation, or use in
  this state permanently, temporarily, directly, or indirectly or
  through a subsidiary, affiliate, or agent by whatever name, of a
  computer server.
         (h)  For purposes of this section, a retailer and another
  person are affiliates if:
               (1)  either the retailer or the other person has a
  direct or indirect ownership interest in the other of more than 50
  percent; or
               (2)  a third person, or a group of persons affiliated
  with each other, has a direct or indirect ownership interest of more
  than 50 percent in the retailer and more than 50 percent in the
  other person.
         (i)  In this section, "fulfillment center" means an
  establishment in this state at which shipments of tangible personal
  property are processed for delivery to customers. The term does not
  include an establishment at which retail sales of tangible personal
  property are made to retail customers on more than 12 days per year
  unless the establishment processes customer sales orders by mail,
  telephone, or electronic means, also processes shipments of
  tangible personal property to customers, and, of the goods sold by
  or shipped through the establishment, the goods sold or shipped to
  customers outside this state represent at least 75 percent of the
  fair market value of the total goods sold by or shipped through the
  establishment. Retail sales made inside an establishment to
  employees working at the establishment are not considered in
  determining the number of days per year on which sales are made to
  retail customers or the value of goods sold by or shipped through an
  establishment.
         SECTION 4.  Section 151.028, Tax Code, as added by this Act,
  and Sections 151.024 and 151.107, Tax Code, as amended by this Act,
  are a clarification of existing law and do not imply that the former
  law may be construed as inconsistent with the law as amended by this
  Act.
         SECTION 5.  This Act takes effect immediately if it 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, this
  Act takes effect September 1, 2011.