Part I.
Comptroller of Public Accounts
Chapter 3.
Tax Administration
Subchapter N. County Sales and Use Tax
34 TAC §3.251
The Comptroller of Public Accounts proposes an amendment
to §3.251, concerning adopting or abolishing county tax. House Bill 92,
75th Legislature, 1997, amended the Local Government Code effective September
1, 1997, by adding Chapter 334 and Chapter 335 concerning sports and community
venue projects and districts. The amendment explains that the notification
requirements, effective dates, and contested election provisions in §3.251
apply to an election to impose sales and use tax for a sports and community
venue project that increases a county tax rate.
The amendment also replaces all references to Texas Civil Statutes, Articles
1118x or 1118y with references to the Transportation Code, Chapters 451 or
452. The provisions in Articles 1118x and 1118y have been recodified in the
Transportation Code.
Mike Reissig, chief revenue estimator, has determined that for the first
five-year period the amendment will be in effect there will be no significant
revenue impact on the state or local government.
Mr. Reissig also has determined that for each year of the first five years
the rule is in effect the public will benefit by the amended rule reflecting
state law, thereby making the rule easier to read and interpret. The rule
is adopted under the Tax Code, Title 2, and does not require a statement of
fiscal implications for small businesses. There is no significant anticipated
economic cost to individuals who are required to comply with the proposed
amendment.
Comments on the proposal may be submitted to Karey W. Barton, Manager,
Tax Policy Division, P.O. Box 13528, Austin, Texas 78711.
This amendment is proposed under the Tax Code, §111.002,
which provides the comptroller with the authority to prescribe, adopt, and
enforce rules relating to the administration and enforcement of the provisions
of the Tax Code, Title 2.
The amendment implements acts by the 75th Legislature, 1997, amending the
Local Government Code.
§3.251.Adopting or Abolishing County Tax.
(a)
General.
(1)
Under the provisions of the County Sales and Use Tax Act,
any county not in a metropolitan transit authority (MTA) formed under
the Transportation Code, Chapters 451 or 452
[
(2)
(No change.)
(b)-(d)
(No change.)
(e)
Sports and community venue project. In
the event that an election to impose a sales and use tax for a sports and
community venue project under Local Government Code, Chapter 334 or Chapter
335, increases a county tax rate, the notification requirements, effective
dates, and contested election provisions in subsections (b), (c), and (d)
of this section shall apply.
(f)
[
Telecommunications services.
Telecommunications services are exempt from county sales tax, but the exemption
may be repealed on certain telecommunications services. See §3.344 of
this title (relating to Telecommunications Services).
(1)
The commissioners court of a county that has imposed the
county sales tax may by a majority vote of the commissioners court repeal
the exemption on telecommunications services. The county judge must forward
to the comptroller by United States registered or certified mail a copy of
the order repealing the exemption. Upon receipt by the comptroller of notification,
one whole calendar quarter shall elapse before county tax applies to telecommunications
services. The following illustrates the effective date of adoption or abolition.
Figure: 34 TAC §3.251
(f)(1)
[
(2)
The commissioners court of a county may exempt telecommunications
services from county tax in the same manner in which the tax was imposed.
(3)
The county sales tax exemption on interstate long-distance
telecommunications services may not be repealed. Notwithstanding any action
on the part of the governing body of a county, charges for interstate long-distance
telecommunications service will be exempt from county sales and use tax.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of the Secretary of State, on
February 6, 1998.
TRD-9801743
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Earliest possible date of adoption: March 22, 1998
For further information, please call: (512) 463-4062
34 TAC §3.285
The Comptroller of Public Accounts proposes an amendment
to §3.285, concerning resale certificate; sales for resale. The Tax Code
was amended effective October 1, 1997, by adding §151.054(f) as a clarification.
The amendment clarifies that a retailer is liable for sales tax on the original
purchase price of a taxable item if the retailer purchases the taxable item
tax free for resale and then uses the taxable item as a trade-in on the purchase
of another taxable item.
Mike Reissig, chief revenue estimator, has determined that for the first
five-year period the amendment will be in effect there will be no significant
revenue impact on the state or local government.
Mr. Reissig also has determined that for each year of the first five years
the rule is in effect the public will benefit by the amended rule reflecting
state law, thereby making the rule easier to read and interpret. The rule
is adopted under the Tax Code, Title 2, and does not require a statement of
fiscal implications for small businesses. There is no significant anticipated
economic cost to individuals who are required to comply with the proposed
amendment.
Comments on the proposal may be submitted to Karey W. Barton, Manager,
Tax Policy Division, P.O. Box 13528, Austin, Texas 78711.
This amendment is proposed under the Tax Code, §111.002,
which provides the comptroller with the authority to prescribe, adopt, and
enforce rules relating to the administration and enforcement of the provisions
of the Tax Code, Title 2.
The amendment implements the acts of the 75th Legislature, 1997, amending
the Tax Code, §151.054.
§3.285.Resale Certificate; Sales for Resale.
(a)-(d)
(No change.)
(e)
Improper use of items purchased for resale.
(1)-(5)
(No change.)
(6)
A purchaser who gives a resale certificate
for the purchase of a taxable item is liable for sales tax if the purchaser
uses the taxable item as a trade-in on the purchase of another taxable item.
Tax must be paid on the original purchase price of the taxable item used as
a trade-in.
(f)-(h)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State, on
February 6, 1998.
TRD-9801746
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Earliest possible date of adoption: March 22, 1998
For further information, please call: (512) 463-4062
34 TAC §3.298
The Comptroller of Public Accounts proposes an amendment
to §3.298, concerning amusement services. The Tax Code was amended effective
October 1, 1997, to add §151.432, concerning the deduction of tax on
a ticket or admission document to an amusement service. The amendment allows
resellers of tickets or admission documents to amusement services to deduct
from reported taxable sales the adjusted value of tickets purchased from non-permitted
purchasers provided the tickets or admission documents had the tax included.
Mike Reissig, chief revenue estimator, has determined that for the first
five-year period the rule will be in effect there will be no significant revenue
impact on the state or local government.
Mr. Reissig also has determined that for each year of the first five years
the rule is in effect the public will benefit by the amended rule reflecting
state law, thereby making the rule easier to read and interpret. The rule
is adopted under the Tax Code, Title 2, and does not require a statement of
fiscal implications for small businesses. There is no significant anticipated
economic cost to individuals who are required to comply with the proposed
amendment.
Comments on the proposal may be submitted to Karey W. Barton, Manager,
Tax Policy Division, P.O. Box 13528, Austin, Texas 78711.
This amendment is proposed under the Tax Code, §111.002,
which provides the comptroller with the authority to prescribe, adopt, and
enforce rules relating to the administration and enforcement of the provisions
of the Tax Code, Title 2.
The amendment implements acts by the 75th Legislature, 1997, amending the
Tax Code by adding §151.432, effective October 1, 1997.
§3.298.Amusement Services.
(a)-(e)
(No change.)
(f)
Taxable item sold or transferred with amusement service.
(1)-(4)
(No change.)
(5)
A reseller of a ticket or admission
document to an amusement service may deduct from taxable sales reported the
"adjusted value" of the ticket or admission document purchased for resale
from a non-permitted purchaser of the ticket or admission document. The "adjusted
value" is the face value of the ticket or admission document, less the included
sales tax. A reseller is allowed the deduction from taxable sales when filing
a sales tax report if all of the following criteria is met:
(A)
the sales tax was paid by the purchaser
and the purchaser does not hold a Texas Sales and Use Tax Permit;
(B)
the language on the ticket or admission
document purchased for resale states that all taxes have been included in
the price of the ticket or admission document;
(C)
the ticket or admission document for which
a deduction is claimed was not purchased tax-free by use of a resale or exemption
certificate; and
(D)
the ticket or admission document is actually
resold.
(g)-(i)
(No change.)
(j)
Records. Every seller of admissions to amusement services
is responsible for keeping accurate records of all sales and purchases. See
§3.281 of this title (relating to Records Required; Information Required).
Every seller of admissions to amusement services must hold a sales tax permit
and must file reports as required by §3.286 of this title (relating to
Seller's and Purchaser's Responsibilities).
A reseller of a ticket or
admission document to an amusement service that is deducting the "adjusted
value" of the ticket or admission document purchased for resale from a non-permitted
purchaser, as provided in subsection (f)(5) of this section, must have records
verifying the deduction that include:
(1)
the name and address of the non-permitted
purchaser;
(2)
the face value of any ticket or admission
document purchased by a non-permitted purchaser;
(3)
proof (such as a copy of the ticket
or admission document) showing that sales tax is included in the price of
the ticket or admission document;
(4)
the sales of tickets or admission
documents; and
(5)
the remaining inventory of unsold
tickets or admission documents.
(k)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State, on
February 6, 1998.
TRD-9801747
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Earliest possible date of adoption: March 22, 1998
For further information, please call: (512) 463-4062
34 TAC §3.329
The Comptroller of Public Accounts proposes an amendment
to §3.329, concerning state sales and use tax refunds available to enterprise
projects and to qualified businesses in enterprise zones. This rule is being
amended as a result of the passage of Senate Bill 226, 75th Legislature, 1997,
which provides for the creation of defense economic readjustment zones (areas
impacted by reductions in federal-defense contracting) and the designation
of defense readjustment projects by the Texas Department of Commerce. Businesses
designated as projects are entitled to franchise tax and sales tax incentives.
Subsection (d) of the proposed rule sets out the definitions pertaining to
this subsection, refunds available, and requirements for filing for the refunds.
The comptroller proposes to rename the rule, Enterprise Projects, Enterprise
Zones, and Defense Readjustment Zones.
Mike Reissig, chief revenue estimator, has determined that for the first
five-year period the amendment will be in effect there will be no significant
revenue impact on the state or local government.
Mr. Reissig also has determined that for each year of the first five years
the rule is in effect the public will benefit by the amended rule reflecting
state law, thereby making the rule easier to read and interpret. The rule
is adopted under the Tax Code, Title 2, and does not require a statement of
fiscal implications for small businesses. There is no significant anticipated
economic cost to individuals who are required to comply with the proposed
amendment.
Comments on the proposal may be submitted to Karey W. Barton, Manager,
Tax Policy Division, P.O. Box 13528, Austin, Texas 78711.
This amendment is proposed under the Tax Code, §111.002,
which provides the comptroller with the authority to prescribe, adopt, and
enforce rules relating to the administration and enforcement of the provisions
of the Tax Code, Title 2.
The amendment implements the Tax Code, §§151.429, 151.4291, and
151.431.
§3.329.[
(a)-(c)
(No change.)
(d)
Defense economic readjustment zones
.
(1)
Definitions applicable to subsection (d)
only:
(A)
Defense readjustment project - A person
designated by the Texas Department of Commerce as a defense readjustment project
under the Government Code, Title 10, Subtitle G, Chapter 2310.
(B)
Qualified business - A person certified
as a qualified business under Government Code, §2310.302.
(C)
Qualified employee - A person who:
(i)
works for a qualified business; and
(ii)
performs at least 50% of the person's
service for the business in the readjustment zone.
(D)
Readjustment zone - An area designated
as a defense economic readjustment zone under the Government Code, Chapter
2310.
(2)
Tax refunds for defense readjustment
projects.
(A)
A defense readjustment project is eligible
for a refund in the amount provided by this section of the state sales and
use taxes imposed by this chapter on purchases of:
(i)
equipment or machinery sold to a defense
readjustment project for use in a readjustment zone;
(ii)
building materials sold to a defense
readjustment project for use in remodeling, rehabilitating, or constructing
a structure in a readjustment zone;
(iii)
labor for remodeling, rehabilitating,
or constructing a structure, not qualifying as a new construction, by a defense
readjustment project in a readjustment zone; and
(iv)
electricity and natural gas purchased
and consumed in the normal course of business in the readjustment zone.
(B)
Subject to the limitations provided by
subparagraph (C) of this paragraph, a defense readjustment project qualifies
for a refund of taxes under this section of $2,500 for each new permanent
job or job that has been retained by the defense readjustment project for
a qualified employee.
(C)
The total amount of tax refund that a
defense readjustment project may apply for in a state fiscal year may not
exceed $250,000. If a defense readjustment project qualifies in a state fiscal
year for a refund of taxes in an amount in excess of the limitation provided
by this subsection, it may apply for a refund of those taxes in a subsequent
year, subject to the $250,000 limitation for each year. However, a defense
readjustment project may not apply for a refund under this section after the
end of the state fiscal year immediately following the state fiscal year in
which the defense readjustment project's designation as a defense readjustment
project expires or is removed. The total amount that may be refunded to a
defense readjustment project under this section may not exceed the amount
determined by multiplying $250,000 by the number of state fiscal years during
which the defense readjustment project created one or more jobs for qualified
employees.
(D)
Only qualified businesses that have been
certified as eligible for a tax refund under this section by the Texas Department
of Commerce to the comptroller and the Legislative Budget Board are entitled
to the tax refund.
(E)
To receive a state tax refund under this
section, a defense readjustment project must apply to the comptroller for
the refund. A refund request submitted to the comptroller must:
(i)
be in writing in a format prescribed by
the comptroller;
(ii)
be accompanied by copies of the certification
by the Texas Department of Commerce;
(iii)
list each qualifying item purchased,
the name of each seller, invoice or contract number, dollar amount of each
purchase, and amount of state tax paid on each purchase.
(F)
A defense readjustment project applying
for a refund of state taxes under this subsection must retain records substantiating
each claim for refund. The records must be verifiable by audit and include
copies of invoices showing the item purchased, the date of purchase, amount
of purchase, the amount of tax paid, and the identity of the seller. The records
must also show that the qualifying taxable items purchased were for use within
the zone. Employment records must also be kept verifying the number of new
jobs created or retained.
(G)
For possible local tax abatements, see
the Government Code, §2310.405.
This agency hereby certifies that the proposal
has been reviewed by legal counsel and found to be within the agency's legal
authority to adopt.
Filed with the Office of the Secretary of State, on
February 6, 1998.
TRD-9801742
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Earliest possible date of adoption: March 22, 1998
For further information, please call: (512) 463-4062
Texas Civil Statutes,
Articles 1118x or 1118y
], may, by a majority vote of the qualified voters
of said county voting at an election held for that purpose, adopt or abolish
a county sales and use tax in accordance with the provisions of the County
Sales and Use Tax Act. An authority is not considered to be located in any
county in which fewer than 250 persons are both residents of the authority
and the county. If adopted, the county tax must be used to reduce the county
property tax rate.
(e)
]
(e)(1)
]
Subchapter O. State Sales and Use Tax
State Sales and Use Tax Refunds Available to ]Enterprise Projects , [ and to Qualified Businesses in ] Enterprise Zones , and Defense Readjustment Zones .
Subchapter P. Municipal Sales and Use Tax