Texas: Recently Signed Bills Expand Marketplace Facilitator Law and Address Procedures

Senate Bill 477, which was signed into law on June 14, 2021, requires marketplace providers to collect and remit certain fees.  Specifically, effective July 1, 2022, marketplace providers are required to collect the state lead-acid battery fee ($2 or $3 depending on the capacity of the battery) and the prepaid wireless 911 emergency service fee. Senate Bill 477 also addresses marketplace providers that are facilitating ticket sales or sales of admissions. A marketplace seller is required to certify to a marketplace provider that the sales and use taxes imposed on the original purchase of the ticket or document were paid. A provider that in good faith accepts the certification may deduct the adjusted value of the ticket or document purchased for resale from taxable sales reported. The bill also confirms that the state’s occasional sale exemption does not apply to the sale of an item made by a marketplace seller through a marketplace. These changes are effective October 1, 2021. 

Other recently signed Texas bills address tax procedure and administration. House Bill 2080 allows taxpayers that have obtained a redetermination by the Comptroller that includes a finding of the disputed and undisputed amounts of any tax to bring a suit related to the disputed portion of the tax in district court, without having first paid the disputed amount in protest. Currently, a suit can be filed only after the entire amount claimed by the state has been paid. The bill takes effect September 1, 2021 and applies only to suits that dispute tax, penalty, or interest that becomes due and payable on or after the effective date.

Senate Bill 903 provides a simplified route to filing a suit related to a tax refund claim. The bill states that a taxpayer claiming a tax refund who files “a notice of intent to bypass the hearing under Section 111.105” with the Comptroller and then participates in a conference with a Comptroller officer to clarify facts or legal issues in dispute and discuss documentation that may resolve outstanding issues regarding the claim, is then authorized to bring a suit in district court.

Senate Bill 296 extends the length of time that a seller has to acquire resale or exemption certificates after the Comptroller requests them in an audit. Currently, sellers must provide certificates within 60 days of the Comptroller request. Effective June 7, 2021, sellers have 90 days to provide certificates after they are requested, or the seller and Comptroller can agree to “a later date” for providing them.

Finally, relating to local tax incentives, House Bill 2404 calls for the creation of a public database that contains information regarding all economic development agreements entered into by municipalities under Section 380.001 (programs for loans and grants to promote economic development or stimulate commercial activity) or 380.002 (programs for grants to 501(c)(3)-exempt organizations) or entered into by counties under Section 381.004 (programs to stimulate commercial activity or further other enumerated policy goals). The database is to include the name of the local government, the name of the entity that entered into the agreement, the start and end dates of the agreement, the focus or scope of the agreement, and an electronic copy of the agreement. Local governments are to provide the necessary information to the Comptroller within 14 days of entering into, amending, or renewing an applicable agreement, and the Comptroller is to update the database no later than 15 business days after receiving the information. The bill takes effect September 1, 2021, and the Comptroller is to publish the database no later than September 1, 2022. Please stay tuned to TWIST for additional legislative changes.