State Comptroller Issues New Sales and Use Tax Regulations

Tax Professionals' Resource
November 30, 2012 — 1,335 views  
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In the October 2012 publication of Tax Policy News, the Texas State Comptroller's Office announced a number of changes to the state's sales and use tax rules. Many of these changes are attempts to clarify existing law or to remove ambiguities that have arisen over the years. Some of the more significant changes include:

  • Requiring over the counter medications to be labeled with a Drug Fact panel compliant with Federal Drug Administration standards in order to be exempt from sales tax
  • · Granting fire control, emergency service districts and crime control districts the authority to impose sales and use tax on residential electricity and natural gas usage
  • · Clarifying that oilfield portable units are subject to sales and use tax, not motor vehicle or hotel occupancy tax
  • · Authorizing tax exempt firefighting organizations to hold 10 tax free auctions or sales each calendar year, provided those sales last no more than 72 hours
  • · Set the dates for the state's annual three-day sales tax holiday by using a calculation based upon the date the majority of non-year-round school districts may begin classes
  • · Amend the definition of occasional sale to exempt from sales tax the sale of personal property by an individual who first obtained the property for private or family use

    Other changes that are being implemented are intended to codify long-standing policy or to clarify ambiguous parts of existing regulations. These include:
  • Codifying that a publication's masthead price will be used to determine average sales price for the purpose of determining a publication's qualification for exemption
  • Clarifying that the acquisition of natural resources is preparation for production, not manufacturing
  • Clarifying that rules implemented in October 2003 relating to cable television service were meant to encompass all services related to cable service and not to expand the consummation of sales to include unrelated services

A new rule being implemented applies the collection and accrual of local sales and use taxes by both sellers and purchasers. The new rule supersedes sections of Title 34 and incorporates relevant sections being proposed for repeal. This new rule generally clarifies the point and which a sale is consummated and therefore incorporates relevant local law.

For a complete listing of all changes being implemented or considered, see the October issue of Tax Policy News on the Window on State Government website.


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