Sales, Use and International Tax Activity Update - September 2009

Texas Steers Towards New Taxation for Shipped Walk-In Purchases  

The Texas Comptroller of Public Accounts has issued a notice explaining a recent legislation change to the local sales tax collection for businesses with multiple locations in Texas. Effective September 1, 2009, S.B. 636, states that taxable sales, in which a customer places an order in person at a retailer’s place of business, shall be charged the local sales tax based on the location where the order is first received, not at the place in which the item is shipped.

Prior to S.B. 636, Tax Code Sections 321.203 and 323.203, provided that the local sales tax collected on delivery sales by a seller with more than one place of business in Texas was determined by the location from where the items were received. However, the new bill will not affect orders placed over the internet, by telephone or through the mail. These types of orders will continue to collect local sales tax based on the place of business that ships or delivers the goods in Texas.

The full publication can be viewed on the Texas Window on State Government Website.

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