TITLE 34.PUBLIC FINANCE

Part 1. COMPTROLLER OF PUBLIC ACCOUNTS

Chapter 3. TAX ADMINISTRATION

Subchapter F. MOTOR VEHICLE SALES TAX

34 TAC §3.72

The Comptroller of Public Accounts adopts an amendment to §3.72, concerning motor vehicle farm machines, timber machines, and trailers, without changes to the proposed text as published in the December 31, 2000, issue of the Texas Register (24 TexReg 12014).

Senate Bill 977, 76th Legislature, 1999, amends Tax Code, §152.091, effective October 1, 2001, providing for an exemption from motor vehicle sales and use tax on the purchase, use, or rental of a machine or a trailer used in timber operations.

No comments were received regarding adoption of the amendment.

This amendment is adopted 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, §152.091.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 31, 2000.

TRD-200003845

Martin Cherry

Special Counsel

Comptroller of Public Accounts

Effective date: June 20, 2000

Proposal publication date: December 31, 1999

For further information, please call: (512) 463-4062


Subchapter N. COUNTY SALES AND USE TAX

34 TAC §3.252

The Comptroller of Public Accounts adopts an amendment to §3.252, concerning collection and allocation of county tax, with changes to the proposed text as published in the December 31, 1999, issue of the Texas Register (24 TexReg 12015).

This section is being amended to reflect changes to the Tax Code, §151.326, enacted by the 76th Legislature, 1999, providing for exemptions on sales of certain clothing and footwear and providing an option for local taxing jurisdictions to repeal the local tax exemptions on or after January 1, 2000.

Changes have been made to subsection (j)(1) of the proposed rule to replace the term "ordinance" with the term "order." Local Government Code, Subtitle B, authorizes counties to adopt orders rather than ordinances.

No comments were received regarding adoption of the amendment.

This amendment is adopted 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, §151.326.

§3.252.Collection and Allocation of County Tax.

(a)

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

(1)

Itinerant vendor--A retailer who does not operate any "place of business" as defined in this section.

(2)

Place of business--An established outlet, office, or location operated by a retailer, the retailer's agent, or the retailer's employee for the purpose of receiving orders for taxable items. The term includes any location at which three or more orders are received by a retailer in a calendar year. A location such as a warehouse, storage yard, or manufacturing plant is not a "place of business" unless at least three orders for taxable items are received by the retailer during a calendar year.

(3)

Special purpose taxes--Local sales and use taxes governed by the provisions of the Tax Code, Chapter 323, which are imposed for use by special districts or for providing specific services such as health services or emergency services.

(4)

Taxing county--Any county in Texas that has adopted the local sales and use tax imposed by the Tax Code, Chapter 323.

(b)

Allocating county sales tax when taxable items are picked up, delivered, or shipped from a Texas retailer's place of business inside a taxing county.

(1)

One place of business. If a retailer has only one place of business and the place of business is in a taxing county, all sales, leases, and rentals by the retailer are subject to county sales tax based upon the location of the place of business. See the exceptions in subsections (e) and (g) of this section.

(2)

Multiple places of business. If a retailer has more than one place of business in this state, county sales tax is due and is allocated to the county in which the retailer's place of business is located:

(A)

where the customer takes possession of the item sold, leased, or rented; or

(B)

from which the item is shipped or delivered.

(c)

Allocating county sales tax when delivery or shipment is from a location in Texas other than the retailer's place of business.

(1)

If an order is received at the place of business of a Texas retailer, but delivery or shipment is made from a location within the state other than the retailer's place of business, county sales tax is due and is allocated to the county where the order was received.

(2)

If an order is received by a traveling salesperson, and delivery or shipment is made from a location within the state which is not a place of business of the Texas retailer, county sales tax is due and is allocated to the county where the retailer's place of business is located from which the salesperson operates.

(d)

Allocating county sales tax when an order is placed with a supplier located outside Texas.

(1)

If an order is initially received at a retailer's place of business outside the state, but delivery or shipment is made from a location within the state other than a place of business of the retailer, county sales or use tax is due and is allocated to the county where delivery is made or possession is taken by the purchaser.

(2)

If an order is received by a salesperson assigned to a place of business located outside Texas and delivery or shipment is made from a location within the state other than a place of business of that retailer, county sales tax is due and is allocated to the county where delivery is made or possession is taken by the purchaser.

(e)

Drop shipment by suppliers receiving orders. If a purchaser places an order directly with a retailer's supplier, and the taxable items are shipped or delivered directly to the purchaser by the supplier, county sales tax is due and is allocated to the county where delivery is made or possession is taken by the purchaser.

(f)

Itinerant vendor. If a retailer is an itinerant vendor, county sales tax is due and is allocated to the county where delivery is made or possession is taken by the purchaser.

(g)

Shipments from outside a taxing county or outside Texas. Notwithstanding any of the foregoing provisions, if a retailer makes deliveries of taxable items from a location not in a taxing county or from outside the state to a Texas purchaser, the county use tax is applicable. See §3.253 of this title (relating to County Use Tax).

(h)

Gas and electricity. County sales tax is due on the sales of natural gas and electricity for taxable use and is allocated to the county into which delivery is made to the consumer. County sales tax is not due on the residential use of natural gas and electricity.

(i)

Telecommunications. If a county imposes county tax on telecommunications services, county sales tax is due on the sale of intrastate telecommunications services and is allocated to the county in which the telephone or other telecommunications device from which the call or other transmission originates, unless the point of origin cannot be determined. If the point of origin cannot be determined, county sales tax is allocated to the county where the address to which the call is billed is located. No county tax is due on interstate telecommunications services.

(j)

Clothing and footwear exemption. Sales of certain articles of clothing and footwear are exempt beginning at 12:01 a.m. on the first Friday in August and ending 72 hours later at 12:00 midnight on the following Sunday in August. See §3.365 of this title (relating to Sales of Clothing and Footwear During a Three-day Period in August).

(1)

On or after January 1, 2000, the commissioners court of a county may adopt by a majority vote of the governing body an order repealing the exemption for sales of certain clothing and footwear. The commissioner court must hold a public hearing on such order before voting on the order. The county judge must forward to the comptroller by United States registered or certified mail a copy of the order. Upon receipt by the comptroller of notification and after the lapse of one whole calendar quarter after receipt of such notice, clothing and footwear will not be exempt from county tax during the three-day holiday.

(2)

The commissioners court of a county may reinstate the exemption in the same manner in which the exemption was repealed.

(k)

Amusement, garbage, and cable television services. County sales tax is due on the sale of amusement, garbage, and cable television service and is allocated to the county where the service is delivered to the consumer.

(l)

Local sales and use taxes for special purposes. Special purpose taxes are collected and allocated in the same manner as county sales and use taxes. Unless specifically provided for in the enacting statute, the combined total of all local taxes may not exceed 2.0%.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 31, 2000.

TRD-200003868

Martin Cherry

Special Counsel

Comptroller of Public Accounts

Effective date: June 20, 2000

Proposal publication date: December 31, 1999

For further information, please call: (512) 463-3699


Subchapter O. STATE SALES AND USE TAX

34 TAC §3.322

The Comptroller of Public Accounts adopts an amendment to §3.322, concerning exempt organizations, without changes to the proposed text as published in the December 31, 1999, issue of the Texas Register (24 TexReg 12019).

This amendment reflects changes to the Tax Code, §151.310, enacted by the 76th Legislature, 1999, allowing for tax-free sales by certain organizations of items selling for over $5,000. Subsections (b)(8) and (b)(9) are revised to update statutory references which were changed as a result of the enactment of the Utilities Code. A new subsection (b)(10) is added to address the exemption for certain committees in cities competing as host cities for the Olympic Games. Subsection (c)(7) is amended to reflect the repeal of Tax Code, §151.3131, regarding the Texas Hospital Financing Council; subsection (g)(2) is amended to provide an exemption for the sale of items over $5000.

No comments were received regarding adoption of the amendment.

This amendment is adopted 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, §151.310.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 31, 2000.

TRD-200003869

Martin Cherry

Special Counsel

Comptroller of Public Accounts

Effective date: June 20, 2000

Proposal publication date: December 31, 1999

For further information, please call: (512) 463-3699


34 TAC §3.323

The Comptroller of Public Accounts adopts an amendment to §3.323, concerning imports and exports, without changes to the proposed text as published in the December 31, 1999, issue of the Texas Register (24 TexReg 12020).

The amendment expands subsections (e)(1) and (2) regarding refunds. The change to subsection (e)(1) applies only when a custom broker certifies an export to The United Mexican States. The change reflects the requirement in House Bill 2406, 76th Legislature, 1999, that retailers in counties bordering The United Mexican States wait 24 hours from the time of export shown on a Licensed Customs Brokers Export Certification prior to refunding the tax. Retailers in counties not bordering The United Mexican States must wait seven days from the date the Licensed Customs Brokers Export Certification is issued.

The change to subsection (e)(2) reflects the requirement in House Bill 2406 that retailers that make undocumented or improperly documented refunds or that refund tax prior to a waiting period required under subsection (e)(2) are liable for the tax refunded plus interest.

No comments were received regarding adoption of the amendment.

This amendment is adopted 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, §151.307.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 31, 2000.

TRD-200003870

Martin Cherry

Special Counsel

Comptroller of Public Accounts

Effective date: June 20, 2000

Proposal publication date: December 31, 1999

For further information, please call: (512) 463-3699


34 TAC §3.360

The Comptroller of Public Accounts adopts an amendment to §3.360, concerning customs brokers, without changes to the proposed text as published in the December 31, 1999, issue of the Texas Register (24 TexReg 12022).

The amendment refers retailers receiving requests for refund based on licensed custom brokers export certifications to §3.323(e) of this title (relating to Imports and Exports) for information regarding refunds.

No comments were received regarding adoption of the amendment.

This amendment is adopted 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, §151.307.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 31, 2000.

TRD-200003871

Martin Cherry

Special Counsel

Comptroller of Public Accounts

Effective date: June 20, 2000

Proposal publication date: December 31, 1999

For further information, please call: (512) 463-3699


Subchapter P. MUNICIPAL SALES AND USE TAX

34 TAC §3.372

The Comptroller of Public Accounts adopts an amendment to §3.372, concerning adopting, increasing, decreasing, or abolishing city tax, without changes to the proposed text as published in the December 31, 1999, issue of the Texas Register (24 TexReg 12022).

This amendment reflects changes to the Tax Code, Chapter 151, made by the 76th Legislature, 1999, providing for exemptions on sales of certain clothing and footwear and providing an option for local taxing jurisdictions to repeal the local tax exemptions on or after January 1, 2000.

No comments were received regarding adoption of the amendment.

This amendment is adopted 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, §151.326.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 31, 2000.

TRD-200003872

Martin Cherry

Special Counsel

Comptroller of Public Accounts

Effective date: June 20, 2000

Proposal publication date: December 31, 1999

For further information, please call: (512) 463-3699


Subchapter R. TRANSIT SALES AND USE TAX

34 TAC §3.428

The Comptroller of Public Accounts adopts an amendment to §3.428, concerning natural gas and electricity, without changes to the proposed text as published in the December 31, 1999, issue of the Texas Register (24 TexReg 12025).

This amendment reflects changes to Tax Code, §151.317, enacted by the 76th Legislature, 1999, making nonsubstantive revisions and codifying the agency's long-standing policy of using predominant use to determine the taxability of gas or electricity measured through a single meter when used for exempt and taxable purposes.

No comments were received regarding adoption of the amendment.

This amendment is adopted 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, §151.317.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 31, 2000.

TRD-200003873

Martin Cherry

Special Counsel

Comptroller of Public Accounts

Effective date: June 20, 2000

Proposal publication date: December 31, 1999

For further information, please call: (512) 463-3699


Subchapter EE. BOAT AND MOTOR SALES AND USE TAX

34 TAC §3.741

The Comptroller of Public Accounts adopts an amendment to §3.741, concerning imposition and collection of tax, without changes to the proposed text as published in the December 24, 1999, issue of the Texas Register (24 TexReg 11695).

This amendment implements changes made by House Bill 579 passed by the 76th, Legislative Session, 1999. The amendment allows a purchaser of a taxable boat or motor, who has remitted tax to a selling dealer that failed to remit the tax to the Texas Parks and Wildlife Department or the County Tax Assessor-Collector, to transfer the boat or motor without paying tax again.

No comments were received regarding adoption of the amendment.

This amendment is adopted 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, §160.041.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 31, 2000.

TRD-200003846

Martin Cherry

Special Counsel

Comptroller of Public Accounts

Effective date: June 20, 2000

Proposal publication date: December 24, 1999

For further information, please call: (512) 463-4062