Sales/Use:
Texas: Some Administrative Rule Changes Involving Local Tax Sourcing Take Effect on October 1

202107002L, Tex. Comptroller (7/28/21). The Texas Comptroller of Public Accounts (Comptroller) explains that some provisions of its local sales and use tax sourcing rule [see Title 24 Tex. Admin. Code section 3.334 (“Rule 3.334”) for more details on this rule] will take effect on October 1, 2021, rather than as of May 31, 2020. Specifically, the Comptroller states that it has delayed implementation of two provisions “to provide taxpayers time to prepare for these changes” so that effective October 1, local tax sourcing will change as follows:

• Orders received by salespersons while working away from their office will be sourced to the location from where the salesperson works if the location meets the definition of a place of business; and
• Orders received by a shopping website or shopping application will be sourced to the Texas customer’s location unless fulfilled by the seller’s Texas place of business.

According to the Comptroller, Rule 3.334:

1. Implements several provisions related to local tax collection by remote sellers and marketplace providers;
2. Clarifies the definition of a place of business; and
3. Makes clear that sales personnel must be present for a location to be considered a “place of business,” and that a place of business does not include a computer server, internet protocol (IP) address, domain name, website or software application. Please contact us with any questions.