TAX CODE
CHAPTER 142. SIMPLIFIED SALES AND USE TAX ADMINISTRATION ACT
§ 142.001. TITLE. This chapter may be cited as the
Simplified Sales and Use Tax Administration Act.
Added by Acts 2001, 77th Leg., ch. 1053, § 1, eff. June 15, 2001.
§ 142.002. DEFINITIONS. In this chapter:
(1) "Agreement" means the Streamlined Sales and Use
Tax Agreement as amended and adopted on November 12, 2002.
(2) "Certified automated system" means software
certified under the agreement to calculate the tax imposed by each
jurisdiction on a transaction, determine the amount of tax to remit
to the appropriate state, and maintain a record of the transaction.
(3) "Certified service provider" means an agent
certified under the agreement to perform all of the seller's sales
tax functions, other than the seller's obligation to remit tax on
the seller's own purchases.
(3-a) "Model 1 seller" means a seller that has selected a
certified service provider as the seller's agent to perform all of
the seller's sales and use tax functions, other than the seller's
obligation to remit tax on the seller's own purchases.
(3-b) "Model 2 seller" means a seller that has selected a
certified automated system to perform part of the seller's sales
and use tax functions, but retains responsibility for remitting the
tax.
(3-c) "Model 3 seller" means a seller that has sales in at
least five member states, has total annual sales revenue of at least
$500 million, has a proprietary system that calculates the amount
of tax due each jurisdiction, and has entered into a performance
agreement with the member states that establishes a tax performance
standard for the seller. The term includes an affiliated group of
sellers using the same proprietary system.
(4) "Sales tax" means a sales tax administered or
computed under Chapter 151.
(5) "Seller" means a person who sells, leases, or
rents personal property or services.
(6) "Use tax" means a use tax administered or computed
under Chapter 151.
Added by Acts 2001, 77th Leg., ch. 1053, § 1, eff. June 15, 2001.
Amended by Acts 2003, 78th Leg., ch. 1310, § 93, eff. Oct. 1,
2003.
§ 142.003. LEGISLATIVE FINDING. The legislature finds
that a simplified sales and use tax system will reduce and over time
eliminate the burden and costs of all vendors to collect this
state's sales and use tax. The legislature also finds that this
state should participate in multistate discussions to review or
amend the terms of the agreement to simplify and modernize sales and
use tax administration to reduce the burden of tax compliance for
all sellers and for all types of commerce.
Added by Acts 2001, 77th Leg., ch. 1053, § 1, eff. June 15, 2001.
§ 142.004. NEGOTIATIONS. This state shall enter into
multistate discussions for the purposes of reviewing or amending
the agreement embodying the simplification requirements prescribed
by Section 142.007. This state may be represented by not more than
four delegates for purposes of those discussions.
Added by Acts 2001, 77th Leg., ch. 1053, § 1, eff. June 15, 2001.
§ 142.005. AUTHORITY TO ENTER INTO AGREEMENT. (a) The
comptroller is authorized and directed to participate in the
development of the Streamlined Sales and Use Tax Agreement with one
or more states to simplify and modernize sales and use tax
administration in order to substantially reduce the burden of tax
compliance for all sellers and for all types of commerce. In the
development of the agreement, the comptroller may act jointly with
other states that are members of the agreement to establish
standards for certification of a certified service provider and
certified automated system and establish performance standards for
multistate sellers.
(b) The comptroller or the comptroller's designee may
represent this state before the other states that are signatories
to the agreement.
(c) The comptroller may enter into the agreement on behalf
of this state if the governor, lieutenant governor, speaker of the
house of representatives, and comptroller unanimously agree that it
would be in this state's best interest to be a signatory to the
agreement.
Added by Acts 2001, 77th Leg., ch. 1053, § 1, eff. June 15, 2001.
Amended by Acts 2003, 78th Leg., ch. 1310, § 94, eff. Oct. 1,
2003.
§ 142.0055. RULES. The comptroller may adopt rules
relating to the administration and collection of the sales and use
tax as necessary to comply with the agreement, including rules
establishing the requirements for a seller to be a Model 1 seller,
Model 2 seller, or Model 3 seller.
Added by Acts 2003, 78th Leg., ch. 1310, § 95, eff. Oct. 1, 2003.
§ 142.006. RELATIONSHIP TO STATE LAW. The agreement
authorized by this chapter does not, in whole or part, invalidate or
amend a law of this state. Adoption of the agreement by this state
does not amend or modify a law of this state. Implementation of a
condition of the agreement in this state, whether adopted before,
at, or after membership of this state in the agreement, must be by
the action of this state.
Added by Acts 2001, 77th Leg., ch. 1053, § 1, eff. June 15, 2001.
§ 142.007. AGREEMENT REQUIREMENTS. (a) The
comptroller may not enter into the agreement authorized by this
chapter unless the agreement requires each state to comply with the
requirements prescribed by this section.
(b) The agreement must set restrictions to limit over time
the number of state rates.
(c) The agreement must establish uniform standards for:
(1) the sourcing of transactions to taxing
jurisdictions;
(2) the administration of exempt sales; and
(3) sales and use tax returns and remittances.
(d) The agreement must provide a central, electronic
registration system that allows a seller to register to collect and
remit sales and use taxes for all signatory states.
(e) The agreement must provide that registration with the
central registration system and the collection of sales and use
taxes in the signatory states will not be used as a factor in
determining whether the seller has nexus with a state for any tax.
(f) The agreement must provide for reduction of the burdens
of complying with local sales and use taxes through:
(1) restricting variances between the state and local
tax bases;
(2) requiring states to administer any sales and use
taxes levied by local jurisdictions within the state so that
sellers collecting and remitting these taxes will not have to
register or file returns with, remit funds to, or be subject to
independent audits from local taxing jurisdictions;
(3) restricting the frequency of changes in the local
sales and use tax rates and setting effective dates for the
application of local jurisdictional boundary changes to local sales
and use taxes; and
(4) providing notice of changes in local sales and use
tax rates and of changes in the boundaries of local taxing
jurisdictions.
(g) The agreement must outline any monetary allowances that
are to be provided by the states to sellers or certified service
providers. The agreement must allow for a joint public and private
sector study of the compliance cost on sellers and certified
service providers to collect sales and use taxes for state and local
governments under various levels of complexity to be completed by
July 1, 2002.
(h) The agreement must require each state to certify
compliance with the terms of the agreement before joining and to
maintain compliance, under the laws of the member state, with all
provisions of the agreement while a member.
(i) The agreement must require each state to adopt a uniform
policy for certified service providers that protects the privacy of
consumers and maintains the confidentiality of tax information.
(j) The agreement must provide for the appointment of an
advisory council of private sector representatives and an advisory
council of nonmember state representatives to consult with in the
administration of the agreement.
Added by Acts 2001, 77th Leg., ch. 1053, § 1, eff. June 15, 2001.
§ 142.008. COOPERATING SOVEREIGNS. The agreement
authorized by this chapter is an accord among individual
cooperating sovereigns in furtherance of their governmental
functions. The agreement provides a mechanism among the member
states to establish and maintain a cooperative, simplified system
for the application and administration of sales and use taxes under
the duly adopted law of each member state.
Added by Acts 2001, 77th Leg., ch. 1053, § 1, eff. June 15, 2001.
§ 142.009. LIMITED BINDING AND BENEFICIAL
EFFECT. (a) The agreement authorized by this chapter binds and
inures only to the benefit of this state and the other member
states. A person, other than a member state, is not an intended
beneficiary of the agreement. A benefit to a person other than a
state is established by the law of this state and the other member
states and not by the terms of the agreement.
(b) Consistent with Subsection (a), a person does not have a
cause of action or defense under the agreement or by virtue of this
state's approval of the agreement. A person may not challenge, in
any action brought under any law, an action or inaction by any
department, agency, or other instrumentality of this state, or any
political subdivision of this state, on the ground that the action
or inaction is inconsistent with the agreement.
(c) A law of this state, or the application of the law, may
not be declared invalid as to any person or circumstance on the
ground that the provision or application is inconsistent with the
agreement.
Added by Acts 2001, 77th Leg., ch. 1053, § 1, eff. June 15, 2001.
§ 142.010. SELLER AND THIRD PARTY LIABILITY. (a) A
certified service provider is the agent of a seller, with whom the
certified service provider has contracted, for the collection and
remittance of sales and use taxes. As the seller's agent, the
certified service provider is liable for sales and use tax due each
member state on all sales transactions the provider processes for
the seller except as provided by this section.
(b) A seller that contracts with a certified service
provider is not liable to this state for sales or use tax due on
transactions processed by the certified service provider unless the
seller misrepresented the type of items it sells or committed
fraud. In the absence of probable cause to believe that the seller
has committed fraud or made a material misrepresentation, the
seller is not subject to audit on the transactions processed by the
certified service provider. A seller is subject to audit for
transactions not processed by the certified service provider. The
member states acting jointly may perform a system check of the
seller and review the seller's procedures to determine if the
certified service provider's system is functioning properly and the
extent to which the seller's transactions are being processed by
the certified service provider.
(c) A person that provides a certified automated system is
responsible for the proper functioning of that system and is liable
to this state for underpayments of tax attributable to errors in the
functioning of the certified automated system. A seller that uses a
certified automated system remains responsible and is liable to
this state for reporting and remitting tax.
(d) A seller that has a proprietary system for determining
the amount of tax due on transactions and has signed an agreement
establishing a performance standard for that system is liable for
the failure of the system to meet the performance standard.
Added by Acts 2001, 77th Leg., ch. 1053, § 1, eff. June 15, 2001.
§ 142.011. SETTLEMENT OF TAX, PENALTY, AND INTEREST. On
or after the later of the date on which the agreement takes effect
as provided by the terms of the agreement or this state becomes a
signatory to the agreement, the comptroller may settle a claim for
tax, penalty, or interest on tax imposed by Chapter 151 if necessary
for the comptroller to comply with the terms of the agreement.
Added by Acts 2003, 78th Leg., ch. 1310, § 96, eff. Oct. 1, 2003.
