Texas Register, Volume 45, Number 21, Pages 3389-3544, May 22, 2020 Page: 3,502
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The comptroller also deletes the reference to call centers, show-
rooms, and clearance centers because those facilities are places
of business of the seller only if sales personnel of the seller re-
ceive three or more orders during a calendar year at those fa-
cilities. The amendment deletes the former example regarding
a home office at which items are sold through an online auction
website because the example is addressed by new language re-
garding orders received through a shopping website. The comp-
troller also amends the definition to delete repetitive language.
The comptroller deletes a reference to "administrative offices"
because the comptroller determines that an administrative office
does not meet the definition of a place of business of the seller
under Tax Code, 321.002(a)(3)(A).
The comptroller also adds to the definition of "place of busi-
ness of the seller - general definition" that an outlet, office, fa-
cility, or any similar location that contracts with a business to
process certain orders or invoices is not a place of business of
the seller if the comptroller determines that these certain loca-
tions are for the sole purpose of avoiding tax due or of rebating
tax to the contracting location. This change is made pursuant to
the definition of "place of business of the retailer" in Tax Code,
321.002(a)(3)(B).
Paul Voelker, on behalf of the City of Richardson; George Kele-
men, on behalf of the Texas Retailers Association; and Mr. Har-
ris expressed concerns with the definition of a place of business.
Specifically, Mr. Harris stated that the definition is not consistent
with the statute or the decision in Combs v. City of Webster;
311 S.W.3d 85 (Tex. App. Austin 2009, pet. denied). He also
stated that it contradicts the statutory definition. Mr. Harris and
Mr. Kelemen requested that the comptroller revise the definition
to restate the statutory language. Mr. Voelker requested that
no revisions be made to the current definition. Rudy Durham, on
behalf of the City of Lewisville, commented that the place of busi-
ness definition needs to be updated to keep up with changes in
technology. The comptroller declines to make the requested re-
visions because the amended definition gives effect to the statu-
tory language.
The comptroller adds a definition for "remote seller" in new sub-
section (a)(18) as defined in 3.286 of this title. Subsequent
paragraphs are renumbered.
The comptroller amends the definition of "temporary place of
business of the seller" in renumbered subsection (a)(22) to clarify
that a temporary place of business of the seller includes a sale
outside the walls of a distribution center, manufacturing plant,
storage yard, warehouse, or similar facility of the seller in a park-
ing lot or similar space sharing the same physical address as the
facility. Sellers may hold sales to the public outside the walls of
their facilities on a temporary basis. The comptroller clarifies that
these sales constitute temporary places of business of the seller.
The comptroller makes these changes throughout the section.
Subsequent paragraphs are renumbered.
The comptroller deletes the definition of "traveling salesperson"
in subsection (a)(21) because the comptroller will treat traveling
salespersons as seller's agents or employees as referenced
in Tax Code, 321.002(a)(3)(A). Subsequent paragraphs are
renumbered.
The comptroller adds new subsection (b), determining the place
of business of a seller. Subsection (b) revises and expands the
provisions of former subsection (e) concerning place of business
- special definitions.Former subsection (e)(1) addressed administrative offices sup-
porting traveling salespersons, and former subsection (e)(2) ad-
dressed distribution centers, manufacturing plants, and other fa-
cilities. In new subsection (b), the comptroller no longer includes
administrative offices supporting a traveling salesperson, and
distribution centers, manufacturing plants, storage yards, ware-
houses, or similar facilities operated by a seller at which sales-
persons are assigned to work in the determination of "place of
business of the seller." A seller does not receive orders at ad-
ministrative offices that solely serve as the base of operations
for a salesperson, or that provide administrative support to a
salesperson. Moreover, the mere fact that a salesperson is as-
signed to work from, or work at, a distribution center, manufac-
turing plant, storage yard, warehouse, or similar facility oper-
ated by a seller does not mean that a seller receives orders at
these locations. These locations by themselves do not meet the
definition of a place of business of the retailer under Tax Code,
321.002(a)(3)(A). The comptroller amends the section to reflect
these changes throughout.
Brady Olsen, Tom Hart, and Andrew Fortune, on behalf of the
City of Grand Prairie, and Mr. Voelker commented that their
cities anticipate losses of sales tax revenues. Mr. Olsen, Mr.
Hart, and Mr. Fortune commented the amendment will nega-
tively impact their city's Local Government Code, Chapter 380
agreements (Chapter 380 agreements) due to removing travel-
ing salesperson from the definition of a place of business.
Mr. Kasner commented that business-to-business warehouses
and distribution centers often rely heavily on traveling salesper-
sons who are based at those locations. Mr. Kasner requested
that the comptroller define "sales office" and contrast it to an
"administrative office" that supports traveling salespersons. Mr.
Kroll made a similar request.
The comptroller declines to reinsert the omitted provisions be-
cause subsection (b) gives effect to Tax Code, 321 .002(a)(3)(A)
that requires administrative offices and sales offices to indepen-
dently meet the statutory definition of a place of business. How-
ever, new paragraph (4), discussed below, will allow a transition
period for these facilities until September 30, 2021.
In new paragraph (1)(A), the comptroller clarifies that locations
must be operated by a seller for the purpose of receiving orders
and receive three or more orders in a calendar year from per-
sons other than employees, independent contractors, and natu-
ral persons affiliated with the seller to be considered a place of
business of the seller in Texas. In new paragraph (3), the comp-
troller restates the provisions from former subsection (e) relating
to purchasing offices with minor changes for ease of readability.
Mr. Kroll commented that the language "other than employees,
independent contractors, and natural persons affiliated with the
seller" contradicts the language in Senate Bill 1533, 83rd Leg-
islature, 2013, as that statute did not impose a related persons
test and that bill does not support the new language regarding
purchasing offices in paragraph (3). Ms. May requested clarity
related to a traveling salesperson working on a campus (group of
business buildings that house sales persons, call centers, fulfill-
ment warehouses, and administrative offices) but not in the same
building as a place of business. She recommended changing
the word "building" to "campus" to avoid confusion. The comp-
troller declines to make these suggested changes because the
clarification gives effect to the statute's definition of a place of
business.45 TexReg 3502 May 22, 2020 Texas Register
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Texas. Secretary of State. Texas Register, Volume 45, Number 21, Pages 3389-3544, May 22, 2020, periodical, May 22, 2020; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1289734/m1/114/: accessed April 25, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.