The Texas House moved to tighten the State’s rules regarding when online businesses must collect sales tax, in an effort to take a stand against internet retailers like Amazon.com. Proposed House Bill 2403 would amend the state tax code to clarify that a “seller or retailer” is required to collect sales tax if:
– The business “maintains, occupies, or uses in this state permanently, temporarily, directly or indirectly or through a subsidiary or agent by whatever name, an office, distribution center, sales or sample room or place, warehouse, storage place or any other physical location where business is conducted.”
– The seller is “entrusted with possession of tangible personal property” through an agreement with another business or entity and is authorized to sell, rent or lease the property.”
The proposed legislation would also clarify that a person or business is considered to be a retailer if they hold a “substantial ownership interest” in any entity that conducts those activities in Texas.