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                                                                  H.B. No. 3534




AN ACT

relating to the place of business of a retailer for purposes of the 
collection of the municipal sales and use tax.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 321.002(a)(3), 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.
	SECTION 2.  Section 321.203, Tax Code, is amended by adding 
Subsection (l) to read as follows:
	(l)  If there is no place of business of the retailer because 
the comptroller determines that an outlet, office, facility, or 
location contracts with a retail or commercial business to process 
for that business invoices or bills of lading and 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, a sale is consummated at 
the place of business of the retailer from whom the outlet, office, 
facility, or location purchased the taxable item for resale to the 
contracting business.
	SECTION 3.  (a)  This Act takes effect September 1, 2003, and 
applies only to a sale of a taxable item that occurs on or after that 
date.  A sale of a taxable item that occurs before that date is 
governed by the law in effect on the date the item is sold, and that 
law is continued in effect for that purpose.
	(b)  Notwithstanding Subsection (a) of this section, the 
change in law made to Section 321.002(a)(3), Tax Code, by this Act, 
may not, before September 1, 2005, be applied to an outlet, office, 
facility, or location that was in existence on May 27, 2003.




______________________________              ______________________________
 
   President of the Senate                               Speaker of the House      

	I certify that H.B. No. 3534 was passed by the House on May 5, 
2003, by a non-record vote; and that the House concurred in Senate 
amendments to H.B. No. 3534 on May 30, 2003, by a non-record vote.

                                                  ______________________________
                                                     Chief Clerk of the House   

	
I certify that H.B. No. 3534 was passed by the Senate, with 
amendments, on May 28, 2003, by the following vote:  Yeas 30, Nays 
1.

                                                  ______________________________
                                                      Secretary of the Senate   



APPROVED: __________________                                                
 
                Date                                                         




 
         __________________                                              
 
              Governor