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  H.B. No. 2403
 
 
 
 
AN ACT
  relating to retailers engaged in business in this state for
  purposes of sales and use taxes.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 151.008(b), Tax Code, is amended to read
  as follows:
         (b)  "Seller" and "retailer" include:
               (1)  a person in the business of making sales at auction
  of tangible personal property owned by the person or by another;
               (2)  a person who makes more than two sales of taxable
  items during a 12-month period, including sales made in the
  capacity of an assignee for the benefit of creditors or receiver or
  trustee in bankruptcy;
               (3)  a person regarded by the comptroller as a seller or
  retailer under Section 151.024 [of this code];
               (4)  a hotel, motel, or owner or lessor of an office or
  residential building or development that contracts and pays for
  telecommunications services for resale to guests or tenants; [and]
               (5)  a person who 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; and
               (6)  a person who, under an agreement with another
  person, is:
                     (A)  entrusted with possession of tangible
  personal property with respect to which the other person has title
  or another ownership interest; and
                     (B)  authorized to sell, lease, or rent the
  property without additional action by the person having title to or
  another ownership interest in the property.
         SECTION 2.  Section 151.107, Tax Code, is amended by
  amending Subsection (a) and adding Subsection (d) to read as
  follows:
         (a)  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 center, sales or sample room or place, warehouse,
  storage place, or any other physical location where [place of]
  business is conducted;
               (2)  has a representative, agent, 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 receipts [rentals] from the sale, [a]
  lease, or rental 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)  holds a substantial ownership interest in, or is
  owned in whole or substantial part by, a person who maintains a
  location in this state from which business is conducted and if:
                     (A)  the retailer sells the same or a
  substantially similar line of products as the person with the
  location in this state and sells those products under a business
  name that is the same as or substantially similar to the business
  name of the person with the location in this state; or
                     (B)  the facilities or employees of the person
  with the location in this state are used to:
                           (i)  advertise, promote, or facilitate sales
  by the retailer to consumers; or
                           (ii)  perform any other activity on behalf
  of the retailer that is intended to establish or maintain a
  marketplace for the retailer in this state, including receiving or
  exchanging returned merchandise;
               (8)  holds a substantial ownership interest in, or is
  owned in whole or substantial part by, a person that:
                     (A)  maintains a distribution center, warehouse,
  or similar location in this state; and
                     (B)  delivers property sold by the retailer to
  consumers; or
               (9)  otherwise does business in this state.
         (d)  In this section:
               (1)  "Ownership" includes:
                     (A)  direct ownership;
                     (B)  common ownership; and
                     (C)  indirect ownership through a parent entity,
  subsidiary, or affiliate.
               (2)  "Substantial" means, with respect to an ownership
  interest, an interest in an entity that is:
                     (A)  if the entity is a corporation, at least 50
  percent, directly or indirectly, of:
                           (i)  the total combined voting power of all
  classes of stock of the corporation; or
                           (ii)  the beneficial ownership interest in
  the voting stock of the corporation;
                     (B)  if the entity is a trust, at least 50 percent,
  directly or indirectly, of the current beneficial interest in the
  trust corpus or income;
                     (C)  if the entity is a limited liability company,
  at least 50 percent, directly or indirectly, of:
                           (i)  the total membership interest of the
  limited liability company; or
                           (ii)  the beneficial ownership interest in
  the membership interest of the limited liability company; or
                     (D)  for any entity, including a partnership or
  association, at least 50 percent, directly or indirectly, of the
  capital or profits interest in the entity.
         SECTION 3.  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 4.  This Act takes effect January 1, 2012.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2403 was passed by the House on April
  27, 2011, by the following vote:  Yeas 125, Nays 20, 3 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 2403 was passed by the Senate on May
  13, 2011, by the following vote:  Yeas 30, Nays 1
  .
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor