The House Research Organization (HRO) published a May 7 report on Texas’ role seeking collection of internet taxes. The report notes that Texas became the most recent of states to negotiate agreements with Amazon.com, which will require the company to start collecting and remitting sales taxes in Texas this July.
Additionally, legislation enacted in the last session expands the definition of a retailer doing business in Texas. The purpose of this change is to increase the number of companies that must collect sales taxes. Under the new law, retailers responsible for collecting sales tax now include those with a substantial ownership interest in or owned by an entity with a location in Texas where business is conducted if:
- the retailer sells a line of products that is the same as or substantially similar to that of the entity with the Texas location and also sells these products under a business name that is the same as or similar to that of the entity with the Texas location; or
- the facilities or employees of the entity with the Texas location are used to advertise, promote, or facilitate sales by the retailer to consumers or to perform any other activity on behalf of the retailer intended to establish or maintain a marketplace for the retailer in Texas, including receiving or exchanging merchandise.
For more details: HRO report.