By: Uresti  S.B. No. 1713          (In the Senate - Filed March 9, 2017; March 22, 2017, read   first time and referred to Committee on Finance; April 27, 2017,   reported adversely, with favorable Committee Substitute by the   following vote:  Yeas 12, Nays 1; April 27, 2017, sent to printer.)Click here to see the committee vote    COMMITTEE SUBSTITUTE FOR S.B. No. 1713 By:  Uresti     A BILL TO BE ENTITLED   AN ACT     relating to the collection of, and notices and reports regarding,   state sales and use taxes; providing an administrative penalty.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 151.008(b), Tax Code, is amended to read   as follows:          (b)  "Seller" and "retailer" include:                (1)  a person in the business of making sales at auction   of tangible personal property owned by the person or by another;                (2)  a person who makes more than two sales of taxable   items during a 12-month period, including sales made in the   capacity of an assignee for the benefit of creditors or receiver or   trustee in bankruptcy;                (3)  a person regarded by the comptroller as a seller or   retailer under Section 151.024;                (4)  a hotel, motel, or owner or lessor of an office or   residential building or development that contracts and pays for   telecommunications services for resale to guests or tenants;                (5)  a person who engages in regular or systematic   solicitation of sales of taxable items in this state by the   distribution of catalogs, periodicals, advertising flyers, or   other advertising, by means of print, radio, or television media,   or by mail, telegraphy, telephone, computer data base, cable,   optic, microwave, or other communication system for the purpose of   effecting sales of taxable items; [and]                (6)  a person who, under an agreement with another   person, is:                      (A)  entrusted with possession of tangible   personal property with respect to which the other person has title   or another ownership interest; and                      (B)  authorized to sell, lease, or rent the   property without additional action by the person having title to or   another ownership interest in the property; and                (7)  a person who is a marketplace provider as provided   by Section 151.013.          SECTION 2.  Subchapter A, Chapter 151, Tax Code, is amended   by adding Section 151.013 to read as follows:          Sec. 151.013.  MARKETPLACE PROVIDERS AND MARKETPLACE   SELLERS. (a)  In this section:                (1)  "Marketplace provider" means a person who, under   an agreement with a seller, facilitates the sale of a taxable item   by the seller.                (2)  "Marketplace seller" means a person who has an   agreement with a marketplace provider under which the marketplace   provider will facilitate the sale of a taxable item by the person.          (b)  For purposes of this section:                (1)  a person facilitates the sale of a taxable item if:                      (A)  the person provides the forum, including an   Internet website or catalog, in which or by means of which the sale   takes place or the offer of sale is accepted; and                      (B)  the person or an affiliate of the person   collects, or contracts with another person to collect, the amount   paid by the purchaser to the seller; and                (2)  two persons are affiliated if:                      (A)  one person has a direct or indirect ownership   interest in the other person of more than five percent; or                      (B)  another person or group of affiliated persons   has a direct or indirect ownership interest in each of the two   persons of more than five percent.          (c)  The facilitation of a sale by a marketplace provider   that results in a sale by a marketplace seller is considered the   making of a sale by the marketplace provider for purposes of   Sections 151.008(a), 151.052, and 151.103 if:                (1)  the marketplace provider holds a permit issued   under Subchapter F; or                (2)  the marketplace provider holds a registration   under Section 151.106 and the marketplace seller does not hold a   permit under Subchapter F.          (d)  Subject to Subsection (f), a marketplace provider is not   subject to liability under Subchapter L for failing to collect and   remit the appropriate amount of tax imposed on a sale if the   marketplace provider can show that, in determining the amount, the   marketplace provider relied exclusively on information provided by   the marketplace seller.  This subsection does not apply if the   marketplace provider and the marketplace seller are affiliated.          (e)  Subject to Subsection (f), a marketplace seller is not   required to collect and remit the tax imposed on a sale and is not   subject to liability under Subchapter L for failing to collect and   remit the appropriate amount of tax imposed on the sale if:                (1)  the sale is considered to be made by a marketplace   provider under Subsection (c);                (2)  the marketplace seller enters into an agreement   with the marketplace provider, as provided by comptroller rule,   under which the marketplace provider is obligated to collect and   remit the tax due on the sale; and                (3)  the marketplace seller can show that any failure   by the marketplace provider to collect and remit the tax on the sale   was not caused by the marketplace seller providing incorrect   information to the marketplace provider.          (f)  A marketplace provider and marketplace seller that are   affiliated are jointly and severally liable for any tax the   marketplace provider fails to collect and remit that is imposed in   connection with a sale of a taxable item by the marketplace seller   that is facilitated by the marketplace provider.          (g)  Notwithstanding Subsection (a), a person described by   Section 151.108(b) or (c) is not a marketplace provider or   marketplace seller with respect to the activities described by   Section 151.108(b) or (c).          (h)  The comptroller may adopt rules necessary to implement   and administer this section, including rules establishing the   requirements for a person to be considered a marketplace provider.          SECTION 3.  Chapter 151, Tax Code, is amended by adding   Subchapter D-1 to read as follows:   SUBCHAPTER D-1.  NOTICE AND REPORT BY RETAILERS WHO DO NOT COLLECT   USE TAX          Sec. 151.121.  APPLICABILITY. (a)  This subchapter applies   only to the sale of a taxable item for storage, use, or consumption   in this state by a retailer who:                (1)  does not hold a permit under Subchapter F;                (2)  does not collect the use tax due from the purchaser   under this chapter; and                (3)  in the previous calendar year had:                      (A)  total receipts of more than $250,000 from the   sale of taxable items for storage, use, or consumption in this   state; or                      (B)  at least 500 sales of taxable items for   storage, use, or consumption in this state.          (b)  For purposes of Subsection (a), the sale of a taxable   item delivered to a purchaser in this state is presumed to be the   sale of a taxable item for storage, use, or consumption in this   state.          (c)  This subchapter applies to a retailer regardless of   whether the retailer has a physical presence in this state.          Sec. 151.122.  NOTICE IN CONNECTION WITH SALE. A retailer   who makes a sale to which this subchapter applies shall provide   written notice to the purchaser that use tax is due on certain   purchases from the retailer and that the State of Texas requires the   purchaser to file a tax report.          Sec. 151.123.  ANNUAL NOTICE TO PURCHASER. (a)  Not later   than January 31 of each year, a retailer shall provide to each   person who made in the preceding calendar year one or more purchases   to which this subchapter applies a written notice:                (1)  stating that the State of Texas requires the   purchaser to file a tax report and pay use tax on certain purchases   from the retailer;                (2)  including the total amount paid by the purchaser   in connection with all sales to which this subchapter applies made   in the preceding calendar year;                (3)  listing each sale to which this subchapter applies   made to the purchaser in the preceding calendar year, including, if   available:                      (A)  the date of the sale;                      (B)  the amount of the sale; and                      (C)  whether the sale is exempted from the taxes   imposed by this chapter, if known by the retailer; and                (4)  containing any other information the comptroller   requires by rule.          (b)  A retailer shall send the notice required by Subsection   (a) to each purchaser by first class mail and may not include the   notice with any other shipment.  The exterior of the mailing must   include the name of the retailer and the phrase "Important Tax   Document Enclosed."           Sec. 151.124.  ANNUAL STATEMENT TO COMPTROLLER. (a)  The   comptroller by rule may require a retailer to submit to the   comptroller an annual statement describing all sales to which this   subchapter applies made to each purchaser in a calendar year.          (b)  Rules under this section may prescribe the content,   form, and format of a statement and the date the statement is due.          Sec. 151.125.  ADMINISTRATIVE PENALTY. (a)  The   comptroller may impose an administrative penalty on a retailer who   fails to:                (1)  provide the notice required by Section 151.122 in   connection with a sale, in an amount not to exceed $5 for each sale;                (2)  provide the notice required by Section 151.123 to   a purchaser for a calendar year, in an amount not to exceed $10 for   each purchaser each calendar year; or                (3)  submit information required by any rules adopted   under Section 151.124 concerning sales made to a purchaser for a   calendar year, in an amount not to exceed $10 for each purchaser   each calendar year.          (b)  The amount of the penalty shall be based on:                (1)  the seriousness of the violation, including the   nature, circumstances, extent, and gravity of the violation;                (2)  the economic harm caused by the violation;                (3)  the history of previous violations;                (4)  the amount necessary to deter a future violation;                (5)  efforts to correct the violation; and                (6)  any other matter that justice may require.          (c)  The enforcement of the penalty may be stayed during the   time the order is under judicial review if the person pays the   penalty to the clerk of the court or files a supersedeas bond with   the court in the amount of the penalty.  A person who cannot afford   to pay the penalty or file the bond may stay the enforcement by   filing an affidavit in the manner required by the Texas Rules of   Civil Procedure for a party who cannot afford to file security for   costs, subject to the right of the comptroller to contest the   affidavit as provided by those rules.           (d)  An administrative penalty collected under this section   may be appropriated only to the comptroller for the purpose of   administering this subchapter.          (e)  A proceeding to impose the penalty is considered to be a   contested case under Chapter 2001, Government Code.          SECTION 4.  The change in law made by this Act does not   affect tax liability accruing before the effective date of this   Act. That liability continues in effect as if this Act had not been   enacted, and the former law is continued in effect for the   collection of taxes due and for civil and criminal enforcement of   the liability for those taxes.          SECTION 5.  Section 151.123, Tax Code, as added by this Act,   applies only to sales made on or after the effective date of this   Act. A retailer shall provide the initial notice required by that   section not later than January 31, 2019.          SECTION 6.  This Act takes effect January 1, 2018.     * * * * *