CHAPTER 322. SALES AND USE TAXES FOR SPECIAL PURPOSE TAXING AUTHORITIES
TAX CODE
TITLE 3. LOCAL TAXATION
SUBTITLE C. LOCAL SALES AND USE TAXES
CHAPTER 322. SALES AND USE TAXES FOR SPECIAL PURPOSE TAXING
AUTHORITIES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 322.001. APPLICATION OF CHAPTER. (a) This chapter applies
to the imposition, assessment, collection, administration, and
enforcement of a sales and use tax imposed under Chapter 451,
452, 453, or 460, Transportation Code.
(b) The effective dates and rates of the taxes imposed by a
taxing entity are determined under the laws authorizing the
adoption of the taxes.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.266, eff.
Sept. 1, 1997; Acts 2003, 78th Leg., ch. 209, Sec. 56, eff. Oct.
1, 2003.
Sec. 322.002. DEFINITIONS. In this chapter:
(1) "Taxing entity" means a rapid transit authority, a regional
transit authority, including a subregional transportation
authority, or a municipal mass transit department created under
Chapter 451, 452, or 453, Transportation Code, or a coordinated
county transportation authority created under Chapter 460,
Transportation Code, that has adopted a sales and use tax under
the law authorizing the creation of the entity.
(2) "Entity area" means the geographical limits of a taxing
entity.
(3) "Municipal sales and use tax" means a sales and use tax
imposed by a municipality under the Municipal Sales and Use Tax
Act (Chapter 321) within an entity area.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.267, eff.
Sept. 1, 1997; Acts 2003, 78th Leg., ch. 209, Sec. 57, eff. Oct.
1, 2003.
SUBCHAPTER B. ASSESSMENT AND COMPUTATION OF TAXES
Sec. 322.101. SALES TAX. There is imposed in a taxing entity a
sales tax at the rate authorized and set as provided by the law
authorizing the creation of the taxing entity and applied to the
receipts from the sale within the entity area of all taxable
items that are subject to the sales tax under Chapter 151.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.102. USE TAX. In a taxing entity, there is imposed an
excise tax on the use, storage, and other consumption within the
entity area of taxable items purchased, leased, or rented from a
retailer during the period that the sales tax is effective within
the entity area. The rate of the excise tax is the same rate as
the rate of the sales tax imposed by the taxing entity and is
applied to the sales price of the taxable item.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.103. COMPUTATION OF SALES TAXES. (a) Each retailer in
an entity area shall add the sales tax imposed under this
chapter, the sales taxes imposed under Chapter 151, and, if
applicable, any sales taxes imposed under Chapter 321 or 323 to
the sales price, and the sum of the taxes is a part of the price,
a debt of the purchaser to the retailer until paid, and
recoverable at law in the same manner as the purchase price.
(b) The amount of the total tax is computed by multiplying the
combined applicable tax rates by the amount of the sales price.
If the product results in a fraction of a cent less than one-half
of one cent, the fraction of a cent is not collected. If the
fraction is one-half of one cent or more, the fraction shall be
collected as one cent.
(c) The exclusion provided by Section 151.411 applies to a
retailer under this chapter 50 percent of whose receipts from the
sales of taxable items comes from individual transactions in
which the sales price is an amount on which no tax is produced
from the combined applicable tax rates.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.104. COMPUTATION OF USE TAX. (a) In each taxing
entity the tax imposed by Subchapter D, Chapter 151, the tax
imposed under Section 321.104(a), if applicable, and the tax
imposed under Section 322.102 are added together to form a single
combined tax rate, except in a situation described by Section
322.105(b).
(b) The formula prescribed by Section 322.103(b) applies to the
computation of the amount of the tax under this section.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.105. USE TAX: WHERE USE OCCURS. (a) In determining
the incidence of the use tax of a taxing entity, the name of the
taxing entity is substituted in Subchapter D, Chapter 151, for
"this state" where those words are used to designate the taxing
entity or delimit the tax imposed. However, the excise tax of a
taxing entity on the use, storage, or other consumption of a
taxable item does not apply if the item is first used, stored, or
consumed in an area other than an entity area.
(b) If a sale of a taxable item is consummated within this state
but not within an entity area and the item is shipped directly or
brought by the purchaser or lessee directly into an entity area,
the item is subject to the entity's use tax. The use is
considered to be consummated at the location where the item is
first used, stored, or consumed after the intrastate transit has
ceased.
(c) If a taxable item is shipped from outside this state to a
customer within this state, the item is subject to the use tax of
the taxing entity and not its sales tax. A use is considered to
be consummated at the first point in this state where the item is
stored, used, or consumed after the interstate transit has
ceased. A taxable item delivered to a point in this state is
presumed to be for storage, use, or consumption at that point
until the contrary is established.
(d) Repealed by Acts 2007, 80th Leg., R.S., Ch. 823, Sec. 1(1),
eff. September 1, 2007.
(e) With respect to a taxable service, "use" means the
derivation in the taxing entity of direct or indirect benefit
from the service.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.21(a), eff.
Aug. 28, 1989; Acts 1991, 72nd Leg., ch. 705, Sec. 29, eff. Sept.
1, 1991.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
823, Sec. 1(1), eff. September 1, 2007.
Sec. 322.106. TAX INAPPLICABLE WHEN NO STATE TAX; EXCEPTIONS.
(a) The sales tax of a taxing entity does not apply to the sale
of a taxable item unless the sales tax imposed under Subchapter
C, Chapter 151, also applies to the sale.
(b) The excise tax of a taxing entity on the use, storage, or
consumption of a taxable item does not apply to the use, storage,
or consumption of an item unless the tax imposed by Subchapter D,
Chapter 151, also applies to the use, storage, or consumption of
the item.
(c) Subsection (b) does not apply to the application of the tax
in a situation described by Section 322.105(b).
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 30, eff.
Sept. 1, 1991.
Sec. 322.108. CERTAIN PROVISIONS OF MUNICIPAL SALES AND USE TAX
APPLICABLE. (a) Except as provided by Subsection (b), the
following apply to the taxes imposed by this chapter in the same
manner as applicable to a municipality under Chapter 321:
(1) Section 321.002(a)(3);
(2) Section 321.003;
(3) Section 321.203;
(4) Section 321.205(d);
(5) Section 321.208;
(6) Section 321.209;
(7) Section 321.303;
(8) Section 321.304; and
(9) Section 321.305.
(b) The provisions of this chapter applicable to a taxing entity
created under Chapter 453, Transportation Code, prevail over any
inconsistent provision in a statute listed in Subsection (a).
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.20(a), eff.
Aug. 28, 1989; Acts 1997, 75th Leg., ch. 165, Sec. 30.268, eff.
Sept. 1, 1997.
Sec. 322.109. TELECOMMUNICATIONS EXEMPTION. (a) There are
exempted from the taxes imposed by a taxing entity under this
chapter the sales within the entity area of telecommunications
services unless the application of the exemption is repealed
under this section. A taxing entity may not repeal the
application of this exemption as it applies to interstate
long-distance telecommunications services, but if a taxing entity
has repealed the exemption before the effective date of Part 4,
Article 1, H.B. No. 61, Acts of the 70th Legislature, 2nd Called
Session, 1987, interstate long-distance telecommunications
services in that taxing entity are not subject to taxes imposed
under this chapter.
(b) Except as provided by Subsection (d), the board of a taxing
entity may, by a majority vote of the board in the manner
required for the adoption of other orders, repeal the application
of the exemption provided by Subsection (a) for
telecommunications services sold within the city.
(c) A taxing entity board that has repealed the application of
the exemption may in the same manner reinstate the exemption.
(d) The governing board of a taxing entity created under Chapter
451, Transportation Code, may not repeal the application of the
exemption provided by Subsection (a) unless the repeal is first
approved by a majority of the members of the governing body of
each municipality that created the taxing entity. A reinstatement
of the exemption must be approved in the same manner.
(e) A vote of a taxing entity board repealing the application of
or reinstating the exemption must be entered in the minutes of
the entity. The entity board chairman or secretary shall send to
the comptroller by United States certified or registered mail a
copy of each order adopted under this section. The repeal of the
application of the exemption or a reinstated exemption takes
effect within the entity on the first day of the first calendar
quarter after the expiration of the first complete calendar
quarter after the date on which the comptroller receives a copy
of the order.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1,
pt. 4, Sec. 34; Acts 1999, 76th Leg., ch. 1008, Sec. 1, eff. June
18, 1999.
Sec. 322.110. TRANSITION EXEMPTION IN CERTAIN TAXING ENTITIES.
(a) The receipts from the sale, use, or rental of and the
storage, use, or consumption of taxable items in this state are
exempt from the tax imposed under this chapter by a taxing entity
created under Chapter 453, Transportation Code, if the items are
used:
(1) for the performance of a written contract entered into
before the date the tax takes effect in the taxing entity, if the
contract is not subject to change or modification by reason of
the tax; or
(2) pursuant to an obligation of a bid or bids submitted before
the date the tax takes effect in the taxing entity, if the bid or
bids may not be withdrawn, modified, or changed by reason of the
tax.
(b) The exemptions provided by this section have no effect after
three years from the date the tax takes effect in the taxing
entity.
Added by Acts 1989, 71st Leg., ch. 2, Sec. 14.19(a), eff. Aug.
28, 1989. Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.269,
eff. Sept. 1, 1997.
SUBCHAPTER C. ADMINISTRATION OF TAXES
Sec. 322.201. COMPTROLLER TO COLLECT AND ADMINISTER TAXES. (a)
The comptroller shall administer, collect, and enforce the sales
and use tax of a taxing entity.
(b) The sales and use taxes imposed under this chapter, the
taxes imposed under Chapters 321 and 323, and the taxes imposed
under Chapter 151 shall be collected together to the extent that
each is imposed in an entity area.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.202. COMPTROLLER'S REPORTING DUTIES. (a) The
comptroller shall report to a taxing entity on the entity's sales
and use taxes by making substantially the same reports that are
required to be made by the comptroller to a municipality under
Sections 321.302(a), (b), and (c).
(b) The comptroller shall send to a taxing entity by United
States certified or registered mail a notice of each person who
is delinquent in the payment of the entity's sales and use taxes
and shall send to the attorney general a copy of the notice. A
notice sent under this subsection is a certification of the
amount of tax owed and is prima facie evidence of a determination
of that amount and of its delinquency.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.2022. TAX INFORMATION. (a) Except as otherwise
provided by this section, the comptroller on request shall
provide to a taxing entity:
(1) information relating to the amount of tax paid to the entity
under this chapter during the preceding or current calendar year
by each person doing business in the area included in the entity
who annually remits to the comptroller state and local sales tax
payments of more than $25,000; and
(2) any other information as provided by this section.
(b) The comptroller on request shall provide to a taxing entity
information relating to the amount of tax paid to the entity
under this chapter during the preceding or current calendar year
by each person doing business in an area included in the entity,
as defined by the entity, that is part of:
(1) an interlocal agreement;
(2) a revenue sharing agreement;
(3) any other agreement similar to those listed in Subdivisions
(1) and (2); or
(4) any area defined by the entity for the purpose of economic
forecasting.
(c) The comptroller shall provide the information under
Subsection (b) as an aggregate total for all persons doing
business in the defined area without disclosing individual tax
payments.
(d) If the request for information under Subsection (b) involves
not more than three persons doing business in the defined area
who remit taxes under this chapter, the comptroller shall refuse
to provide the information to the taxing entity unless the
comptroller receives permission from each of the persons allowing
the comptroller to provide the information to the entity as
requested.
(e) A separate request for information under this section must
be made in writing by the governing body of the taxing entity
each year.
(f) Information received by a taxing entity under this section
is confidential, is not open to public inspection, and may be
used only for the purpose of economic forecasting, for internal
auditing of a tax paid to the entity under this chapter, or for
the purpose described by Subsection (g).
(g) Information received by a taxing entity under Subsection (b)
may be used by the entity to assist in determining revenue
sharing under a revenue sharing agreement or other similar
agreement.
(h) The comptroller may set and collect from a taxing entity
reasonable fees to cover the expense of compiling and providing
information under this section.
(i) Notwithstanding Chapter 551, Government Code, the governing
body of a taxing entity is not required to confer with one or
more employees or a third party in an open meeting to receive
information or question the employees or third party regarding
the information received by the entity under this section.
Added by Acts 2009, 81st Leg., R.S., Ch.
1360, Sec. 7, eff. September 1, 2009.
Sec. 322.203. COMPTROLLER'S RULES. The comptroller may adopt
reasonable rules and prescribe forms that are consistent with
this chapter for the administration, collection, and enforcement
of this chapter and for the reporting of the taxes imposed under
this chapter.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.204. DELINQUENT TAXES: LIMITATIONS. The limitations
for the bringing of a suit for the collection of a sales and use
tax imposed by a taxing entity or a penalty due on the tax after
the tax and penalty are delinquent or after a determination
against a taxpayer are the same as the limitations provided by
Chapter 151.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.205. SEIZURE AND SALE OF PROPERTY. (a) If the
comptroller lawfully seizes property for the payment of the taxes
imposed under Chapter 151 and the property owner is delinquent in
the payment of taxes under this chapter, the comptroller shall
sell sufficient property to pay the delinquent taxes and
penalties under this chapter, Chapter 151, and Chapter 321.
(b) The proceeds of the sale of seized property shall first be
applied to the payment of amounts due the state, then to the
payments of amounts due a municipality under Chapter 321, and the
remainder, if any, to the payment of amounts due to the taxing
entity to which the taxes are due.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.206. SUITS FOR TAX COLLECTION. (a) A taxing entity
acting through its attorney may join as a plaintiff in any suit
brought by the attorney general to seek a judgment for delinquent
taxes and penalties due to the taxing entity under this chapter.
(b) A taxing entity may bring suit for the collection of taxes
owed to the taxing entity under this chapter if:
(1) the taxes are certified by the comptroller in the notice
required by Section 322.202(b);
(2) a written notice of the tax delinquency and the entity's
intention to bring suit is given by certified mail to the
taxpayer, the attorney general, and the comptroller at least 60
days before the suit is filed; and
(3) neither the comptroller nor the attorney general disapproves
of the suit.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.207. DISAPPROVAL OF SUIT. (a) The comptroller or the
attorney general may disapprove of the institution of a suit by a
taxing entity under Section 322.206(b) if:
(1) negotiations between the state and the taxpayer are being
conducted for the purpose of the collection of delinquent taxes
owed to the state and the taxing entity seeking to bring suit;
(2) the taxpayer owes substantial taxes to the state and there
is a reasonable possibility that the taxpayer may be unable to
pay the total amount owed;
(3) the state will bring suit against the taxpayer for all taxes
due under Chapter 151 and this chapter; or
(4) the suit involves a critical legal question relating to the
interpretation of state law or a provision of the Texas or United
States constitution in which the state has an overriding
interest.
(b) A notice of disapproval to a taxing entity must be in
writing and give the reason for the determination by the
comptroller or attorney general.
(c) A disapproval is final and not subject to review.
(d) Not earlier than one year after the date of a disapproval of
the institution of a taxing entity collection suit, the taxing
entity may again proceed as provided by Section 322.206(b) even
though the liability of the taxpayer includes taxes for which the
entity has previously given notice and the comptroller or
attorney general has disapproved of the suit.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.208. JUDGMENTS IN SUIT. (a) A judgment in a suit
under Section 322.206(b) for or against a taxpayer does not
affect a claim against the taxpayer by a municipality or the
state unless the state is party to the suit.
(b) A taxing entity shall abstract a copy of each final judgment
for taxes imposed under this chapter in a case in which the state
is not a party and shall send to the comptroller a copy of the
judgment and the abstract.
(c) A taxing entity shall by execution collect the taxes awarded
to it in each judgment received by it and is responsible for the
renewal of the judgment before its expiration.
(d) The taxing entity shall notify the comptroller by certified
mail of the amount of any taxes collected on the judgment.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
SUBCHAPTER D. REVENUE DEPOSIT, DISTRIBUTION, AND USE
Sec. 322.301. COLLECTIONS HELD BY COMPTROLLER. The comptroller
shall deposit, hold, account for, and transmit sales and use
taxes collected under this chapter for each taxing entity in the
same manner as required under Section 321.501 for each
municipality.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.302. DISTRIBUTION OF TRUST FUNDS. At least quarterly
during each state fiscal year and as often as feasible, the
comptroller shall send to the person at each taxing entity who
performs the function of entity treasurer, payable to the taxing
entity, the entity's share of the taxes collected by the
comptroller under this chapter.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1989, 71st Leg., ch. 16, Sec. 5, eff. Aug.
31, 1989; Acts 1997, 75th Leg., ch. 165, Sec. 30.270, eff. Sept.
1, 1997; Acts 1999, 76th Leg., ch. 1467, Sec. 2.68, eff. Oct. 1,
1999.
Sec. 322.303. STATE'S SHARE. Before sending any money to a
taxing entity under this subchapter, the comptroller shall deduct
two percent of the amount of the taxes collected within the
entity area during the period for which a distribution is made as
the state's charge for its services under this chapter and shall
credit the money deducted to the general revenue fund.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987.
Sec. 322.304. AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
comptroller may retain in the suspense account of a taxing entity
a portion of the entity's share of the tax collected for the
entity under this chapter, not to exceed five percent of the
amount remitted to the entity. If the entity has abolished the
tax, the amount that may be retained may not exceed five percent
of the final remittance to the entity at the time of the
termination of the collection of the tax.
(b) From the amounts retained in an entity's suspense account,
the comptroller may make refunds for overpayments to the account
and to redeem dishonored checks and drafts deposited to the
credit of the account.
(c) Before the expiration of one year after the effective date
of the abolition of an entity's tax under this chapter other than
a department under Chapter 453, Transportation Code, the
comptroller shall send to the entity the remainder of the money
in the entity's account and shall close the account.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.271, eff.
Sept. 1, 1997.
Sec. 322.305. INTEREST ON TRUST ACCOUNTS. Interest earned on
all deposits made with the comptroller under this chapter,
including interest earned on retained accounts, shall be credited
to the general revenue fund.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,
1987. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.125,
eff. Sept. 1, 1997.
Sec. 322.306. RETENTION OF CERTAIN SPECIAL PURPOSE DISTRICT
SALES TAXES. A taxing entity that holds a sales and use tax
permit issued by the comptroller and that imposes a sales and use
tax may retain the portion of the tax that the taxing entity
collects and that constitutes the entity's own tax. The taxing
entity shall remit to the comptroller all other applicable local
sales and use taxes and the state sales and use tax.
Added by Acts 2001, 77th Leg., ch. 1263, Sec. 76, eff. Oct. 1,
2001.