Sec. 151.350. LABOR TO RESTORE CERTAIN PROPERTY

(a) Labor to restore real or tangible personal property is exempted from the taxes imposed by this chapter if:

(1) the amount of the charge for labor is separately itemized; and

(2) the restoration is performed on property damaged within a disaster area by the condition that caused the area to be declared a disaster area.

(b) The exemption under this section does not apply to tangible personal property transferred by the service provider to the purchaser as part of the service.

(1) an area declared a disaster area by the governor under Chapter 418, Government Code; or

(2) an area declared a disaster area by the president of the United States under 42 U.S.C. Section 5141.

(d) In this section, “restore” means:

(1) launder, clean, repair, treat, or apply protective chemicals to an item, to the extent the service is a personal service as defined in Section 151.0045; and

(2) repair, restore, or remodel, to the extent the service is:

(A) a real property repair or remodeling service as defined in Section 151.0047; or

(B) defined as a taxable service in Section 151.0101(a)(5).

Added by Acts 1993, 73rd Leg., ch. 587, Sec. 17, eff. Oct. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 1000, Sec. 20, eff. Oct. 1, 1995; Acts 1999, 76th Leg., ch. 1467, Sec. 2.22, eff. Oct. 1, 1999.

Sec. 151.3501. LABOR TO RESTORE, REPAIR, OR REMODEL HISTORIC SITES. (a) Labor to restore, repair, or remodel an improvement to real property is exempted from the taxes imposed by this chapter if:

(1) the amount of the charge for labor is separately itemized; and

(2) the restoration, repair, or remodeling is performed on an improvement to real property listed in the National Register of Historic Places.

(b) The exemption provided by this section does not apply to tangible personal property transferred by the service provider to the purchaser as part of the service.

Added by Acts 2003, 78th Leg., ch. 209, Sec. 23, eff. Oct. 1, 2003.

Sec. 151.3503. SERVICES BY EMPLOYEES. (a) The following are exempted from the taxes imposed by this chapter:

(1) a service performed by an employee for the employee’s employer in the regular course of business, within the scope of the employee’s duties, and for which the employee is paid regular wages or salary;

(2) a service performed by an employee of a temporary employment service for a host employer to supplement the host employer’s existing work force on a temporary basis, if:

(A) the service is normally performed by the host employer’s own employees;

(B) the host employer provides all supplies and equipment necessary to perform the service, other than personal protective equipment provided by the temporary employment service pursuant to a federal law or regulation;

(C) the host employer does not rent, lease, purchase, or otherwise acquire for use the supplies and equipment described by Paragraph (B), other than the personal protective equipment described by that paragraph, from the temporary employment service or an entity that is a member of an affiliated group of which the temporary employment service is also a member; and

(D) the host employer has the sole right to supervise, direct, and control the work performed by the employee of the temporary employment service as necessary to conduct the host employer’s business or to comply with any licensing, statutory, or regulatory requirement applicable to the host employer; or

(3) a service performed by covered employees of a professional employer organization, either licensed under Chapter 91, Labor Code, or exempt from the licensing requirements of that chapter, for a client under a written contract that provides for shared employment responsibilities between the professional employer organization and the client for the covered employees, most of whom must have been previously employed by the client.

(b) The comptroller shall prescribe by rule the minimum percentage of covered employees that must have been previously employed by the client, the minimum time period the covered employees must have been employed by the client prior to the commencement of its contract, and such other criteria as the comptroller may deem necessary to properly implement Subsection (a)(3).

(1) “Affiliated group” has the meaning assigned by Section 171.0001.

(2) “Host employer” means the employer who owns, manages, or controls the property or worksite where an employee of a temporary employment service performs a service.

(3) “Temporary employment service” has the meaning assigned by Section 93.001, Labor Code.

Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 6, Sec. 9, eff. Oct. 2, 1984. Amended by Acts 1989, 71st Leg., ch. 254, Sec. 1, eff. Oct. 1, 1989; Acts 1997, 75th Leg., ch. 1040, Sec. 18, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 1263, Sec. 14, eff. Oct. 1, 2001.

Amended by:

Acts 2013, 83rd Leg., R.S., Ch. 117 (S.B. 1286), Sec. 22, eff. September 1, 2013.

Transferred, redesignated and amended from Tax Code, Section 151.057 by Acts 2017, 85th Leg., R.S., Ch. 573 (S.B. 745), Sec. 1, eff. September 1, 2017.

Sec. 151.351. INFORMATION SERVICES AND DATA PROCESSING SERVICES. There is exempted from the taxes imposed by this chapter 20 percent of the value of information services and data processing services.

Added by Acts 1999, 76th Leg., ch. 394, Sec. 8, eff. Oct. 1, 1999.

Sec. 151.353. COURT REPORTING SERVICES. (a) Court reporting services relating to the preparation of a document or other record in a civil or criminal suit by a notary public or a court reporter licensed by the Judicial Branch Certification Commission are exempted from the taxes imposed by this chapter if the document is:

(1) prepared for the use of a person participating in a suit or the court in which a suit or administrative proceeding is brought; and

(2) sold to a person participating in the suit.

(b) Court reporting services covered by this section include services in the preparation of a:

(1) deposition or discovery document;

(2) transcript of testimony; and

(3) statement of facts.

(c) The exemption provided by this section applies to a document or record on audio or video tape or a computer readable format and courtroom presentation of same.

(d) Court reporting services by a video photographer who is not a court reporter and who videotapes or films a deposition, testimony, discovery document, or statement of fact pertaining to a civil or criminal suit are exempted from the taxes imposed by this chapter if the services are provided and sold as described by Subsections (a)(1) and (2).

Added by Acts 1995, 74th Leg., ch. 973, Sec. 1, eff. Oct. 1, 1995. Amended by Acts 1997, 75th Leg., ch. 1040, Sec. 25, eff. Oct. 1, 1997.

Amended by:

Acts 2013, 83rd Leg., R.S., Ch. 42 (S.B. 966), Sec. 2.28, eff. September 1, 2014.

Sec. 151.354. SERVICES BY EMPLOYEES OF PROPERTY MANAGEMENT COMPANIES. (a) There are exempted from the taxes imposed by this chapter services performed by an employee of a property management company if:

(1) the employee is permanently assigned to one rental property by the property management company;

(2) the property management company is reimbursed on a dollar-for-dollar basis for the services provided; and

(3) the employee remains assigned to that property while employed by successive owners or management companies.

(b) This exemption does not apply to services performed by an employee for properties other than the one to which the employee is permanently assigned.

(c) For purposes of this section, a person is an employee of a property management company if either the property management company or an affiliate of the property management company employs the person.

(d) The property management company must:

(1) be contractually obligated to the property owner to exercise control over the activities of the employee providing the service; and

(2) manage and direct the employee’s day-to-day activities.

(e) The property management company or the affiliate must pay tax on the taxable items purchased and provided to employees providing services on managed property.

(f) In this section, “property management company” means a person:

(1) who, for consideration, operates and manages all the activities at a property held by the owner for purposes of rental, including an office building, mall, or other retail or office complex, an apartment complex, a duplex, or a home; and

(2) whose responsibilities include securing tenants, hiring, and supervising employees for operation or upkeep of the property, receiving and applying revenues, and incurring and paying expenses derived from the operation of the property as directed by the owner.

(g) In this section, a corporation, limited liability company, partnership, trust, or estate is an affiliate of the property management company if an 80 percent ownership interest in the property management company or the corporation, limited liability company, partnership, trust, or estate is held by the other, or if a third person has an 80 percent ownership interest either directly or indirectly in both the property management company and the corporation, limited liability company, partnership, trust, or estate.

Added by Acts 1999, 76th Leg., ch. 1467, Sec. 2.23, eff. Oct. 1, 1999.

Sec. 151.355. WATER-RELATED EXEMPTIONS. The following are exempted from taxes imposed by this chapter:

(1) rainwater harvesting equipment or supplies, water recycling and reuse equipment or supplies, or other equipment, services, or supplies used solely to reduce or eliminate water use;

(2) equipment, services, or supplies used solely for desalination of surface water or groundwater;

(3) equipment, services, or supplies used solely for brush control designed to enhance the availability of water;

(4) equipment, services, or supplies used solely for precipitation enhancement;

(5) equipment, services, or supplies used solely to construct or operate a water or wastewater system certified by the Texas Commission on Environmental Quality as a regional system;

(6) equipment, services, or supplies used solely to construct or operate a water supply or wastewater system by a private entity as a public-private partnership as certified by the political subdivision that is a party to the project; and

(7) tangible personal property specifically used to process, reuse, or recycle wastewater that will be used in fracturing work performed at an oil or gas well.

Added by Acts 2001, 77th Leg., ch. 966, Sec. 4.25, eff. Sept. 1, 2001, and Acts 2001, 77th Leg., ch. 1234, Sec. 39. Amended by Acts 2003, 78th Leg., ch. 209, Sec. 24, eff. Oct. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1352 (H.B. 4), Sec. 14, eff. June 15, 2007.

Sec. 151.356. OFFSHORE SPILL RESPONSE CONTAINMENT PROPERTY. (a) In this section, “offshore spill response containment property” means tangible personal property:

(1) described by Section 11.271(c);

(2) owned or leased by an entity described by Section 11.271(f); and

(3) used or intended to be used solely in an offshore spill response containment system as defined by Section 11.271(a).

(b) This section does not apply to an item used, wholly or partly, for the exploration for or production of oil, gas, sulfur, or other minerals, including the equipment, piping, casing, and other components of an oil or gas well. For purposes of this subsection, the offshore capture of fugitive oil, gas, sulfur, or other minerals that is entirely incidental to the item’s temporary use as an offshore spill response containment system is not considered to be production of those substances.

(c) The sale, lease, rental, storage, use, or other consumption by an entity described by Section 11.271(f) of offshore spill response containment property used solely for the purposes described by Section 11.271(c) and this section is exempted from the taxes imposed by this chapter.

(d) A service performed exclusively on offshore spill response containment property is exempted from the taxes imposed by this chapter.

Added by Acts 2013, 83rd Leg., R.S., Ch. 942 (H.B. 1712), Sec. 3, eff. June 14, 2013.

Sec. 151.3565. EMERGENCY PREPARATION SUPPLIES FOR LIMITED PERIOD. (a) The sale of an emergency preparation item is exempted from the taxes imposed by this chapter if the sale takes place during a period beginning at 12:01 a.m. on the Saturday before the last Monday in April and ending at 12 midnight on the last Monday in April.

(b) For purposes of this section, “emergency preparation item” means:

(1) a portable generator used to provide light or communications or to preserve perishable food in the event of a power outage, the sales price of which is less than $3,000;

(2) an item listed in this subdivision, the sales price of which is less than $300:

(A) a storm protection device manufactured, rated, and marketed specifically to prevent damage to a glazed or non-glazed opening during a storm; or

(B) an emergency or rescue ladder; or

(3) an item listed in this subdivision, the sales price of which is less than $75:

(A) a reusable or artificial ice product;

(B) a portable, self-powered light source;

(D) a AAA cell, AA cell, C cell, D cell, 6 volt, or 9 volt battery, or a package containing more than one battery, other than an automobile or boat battery;

(E) a nonelectric cooler or ice chest for food storage;

(F) a tarpaulin or other flexible waterproof sheeting;

(G) a ground anchor system or tie-down kit;

(H) a mobile telephone battery or battery charger;

(I) a portable self-powered radio, including a two-way radio or weatherband radio;

(J) a fire extinguisher, smoke detector, or carbon monoxide detector;

(K) a hatchet or axe;

(L) a self-contained first aid kit; or

(M) a nonelectric can opener.

Added by Acts 2015, 84th Leg., R.S., Ch. 475 (S.B. 904), Sec. 1, eff. September 1, 2015.

Sec. 151.359. PROPERTY USED IN CERTAIN DATA CENTERS; TEMPORARY EXEMPTION. (a) In this section:

(1) “County average weekly wage” means the average weekly wage in a county for all jobs during the most recent four quarterly periods for which data is available, as computed by the Texas Workforce Commission, at the time a data center creates a job used to qualify under this section.

(2) “Data center” means at least 100,000 square feet of space in a single building or portion of a single building, which space:

(A) is located in this state;

(B) is specifically constructed or refurbished and actually used primarily to house servers and related equipment and support staff for the processing, storage, and distribution of data;

(D) is not used primarily by a telecommunications provider to place tangible personal property that is used to deliver telecommunications services; and

(E) has an uninterruptible power source, generator backup power, a sophisticated fire suppression and prevention system, and enhanced physical security that includes restricted access, video surveillance, and electronic systems.

(3) “Permanent job” means an employment position that will exist for at least five years after the date the job is created.

(4) “Qualifying data center” means a data center that meets the qualifications prescribed by Subsection (d).

(5) “Qualifying job” means a full-time, permanent job that pays at least 120 percent of the county average weekly wage in the county in which the job is based. The term includes a new employment position staffed by a third-party employer if a written contract exists between the third-party employer and a qualifying owner, qualifying operator, or qualifying occupant that provides that the employment position is permanently assigned to an associated qualifying data center.

(6) “Qualifying operator” means a person who controls access to a qualifying data center, regardless of whether that person owns each item of tangible personal property located at the qualifying data center. A qualifying operator may also be the qualifying owner.

(7) “Qualifying owner” means a person who owns the building in which a qualifying data center is located. A qualifying owner may also be the qualifying operator.

(8) “Qualifying occupant” means a person who:

(A) contracts with a qualifying owner or qualifying operator to place, or cause to be placed, and to use tangible personal property at the qualifying data center; or

(B) in the case of a qualifying occupant who is also the qualifying owner and the qualifying operator, places or causes to be placed, and uses tangible personal property at the qualifying data center.

(b) Except as otherwise provided by this section, tangible personal property that is necessary and essential to the operation of a qualified data center is exempted from the taxes imposed by this chapter if the tangible personal property is purchased for installation at, incorporation into, or in the case of Subdivision (1), use in a qualifying data center by a qualifying owner, qualifying operator, or qualifying occupant, and the tangible personal property is:

(1) electricity;

(2) an electrical system;

(3) a cooling system;

(4) an emergency generator;

(5) hardware or a distributed mainframe computer or server;

(6) a data storage device;

(7) network connectivity equipment;

(8) a rack, cabinet, and raised floor system;

(9) a peripheral component or system;

(10) software;

(11) a mechanical, electrical, or plumbing system that is necessary to operate any tangible personal property described by Subdivisions (2)-(10);

(12) any other item of equipment or system necessary to operate any tangible personal property described by Subdivisions (2)-(11), including a fixture; and

(13) a component part of any tangible personal property described by Subdivisions (2)-(10).

(1) office equipment or supplies;

(2) maintenance or janitorial supplies or equipment;

(3) equipment or supplies used primarily in sales activities or transportation activities;

(4) tangible personal property on which the purchaser has received or has a pending application for a refund under Section 151.429;

(5) tangible personal property not otherwise exempted under Subsection (b) that is incorporated into real estate or into an improvement of real estate;

(6) tangible personal property that is rented or leased for a term of one year or less; or

(7) notwithstanding Section 151.3111, a taxable service that is performed on tangible personal property exempted under this section.

(d) Subject to Subsection (k), a data center may be certified by the comptroller as a qualifying data center for purposes of this section if, on or after September 1, 2013:

(1) a single qualifying occupant:

(A) contracts with a qualifying owner or qualifying operator to lease space in which the qualifying occupant will locate a data center; or

(B) occupies a space that was not previously used as a data center in which the qualifying occupant will locate a data center, in the case of a qualifying occupant who is also the qualifying operator and the qualifying owner; and

(2) the qualifying owner, qualifying operator, or qualifying occupant, jointly or independently:

(A) creates at least 20 qualifying jobs in the county in which the data center is located, not including jobs moved from one county in this state to another county in this state; and

(B) makes or agrees to make a capital investment, on or after September 1, 2013, of at least $200 million in that particular data center over a five-year period beginning on the date the data center is certified by the comptroller as a qualifying data center.

(e) A data center that is eligible under Subsection (d) to be certified by the comptroller as a qualified data center shall apply to the comptroller for certification as a qualifying data center and for issuance of a registration number or numbers by the comptroller. The application must be made on a form prescribed by the comptroller and include the information required by the comptroller. The application must include the name and contact information for the qualifying occupant and, if applicable, the name and contact information for the qualifying owner and the qualifying operator who will claim the exemption authorized under this section. The application form must include a section for the applicant to certify that the capital investment required by Subsection (d)(2)(B) will be met independently or jointly by the qualifying occupant, qualifying owner, or qualifying operator within the time period prescribed by Subsection (d)(2)(B).

(f) The exemption provided by this section begins on the date the data center is certified by the comptroller as a qualifying data center and expires:

(1) on the 10th anniversary of that date, if the qualifying occupant, qualifying owner, or qualifying operator independently or jointly makes a capital investment of at least $200 million but less than $250 million as provided by Subsection (d)(2)(B); or

(2) on the 15th anniversary of that date, if the qualifying occupant, qualifying owner, or qualifying operator independently or jointly makes a capital investment of $250 million or more as provided by Subsection (d)(2)(B).

(g) Each person who is eligible to claim an exemption authorized by this section must hold a registration number issued by the comptroller. The registration number must be stated on the exemption certificate provided by the purchaser to the seller of tangible personal property eligible for the exemption.

(h) The comptroller shall revoke all registration numbers issued in connection with a qualifying data center that the comptroller determines does not meet the requirements prescribed by Subsection (d). Each person who has the person’s registration number revoked by the comptroller is liable for taxes, including penalty and interest from the date of purchase, imposed under this chapter on purchases for which the person claimed an exemption under this section, regardless of whether the purchase occurred before the date the registration number was revoked.

(i) The comptroller shall adopt rules consistent with and necessary to implement this section, including rules relating to:

(1) a qualifying data center, qualifying owner, qualifying operator, and qualifying occupant;

(2) issuance and revocation of a registration number required under this section; and

(3) reporting and other procedures necessary to ensure that a qualifying data center, qualifying owner, qualifying operator, and qualifying occupant comply with this section and remain entitled to the exemption authorized by this section.

(j) The exemption in this section does not apply to the taxes imposed under Chapter 321, 322, or 323.

(k) A data center is not eligible to receive an exemption under this section if the data center is subject to an agreement limiting the appraised value of the data center’s property under former Subchapter B or C, Chapter 313.

Added by Acts 2013, 83rd Leg., R.S., Ch. 1274 (H.B. 1223), Sec. 1, eff. September 1, 2013.

Amended by:

Acts 2017, 85th Leg., R.S., Ch. 378 (H.B. 4038), Sec. 1, eff. June 1, 2017.

Acts 2025, 89th Leg., R.S., Ch. 204 (H.B. 1620), Sec. 19.002(a), eff. September 1, 2025.

Sec. 151.3595. PROPERTY USED IN CERTAIN LARGE DATA CENTER PROJECTS; TEMPORARY EXEMPTION. (a) In this section:

(1) “County average weekly wage” means the average weekly wage in a county for all jobs during the most recent four quarterly periods for which data is available, as computed by the Texas Workforce Commission, at the time a large data center project creates a job used to qualify under this section.

(2) “Large data center project” means a project that:

(A) is located in this state;

(B) is composed of one or more buildings comprising at least 250,000 square feet of space located or to be located on a single parcel of land or on contiguous parcels of land that are commonly owned or owned by affiliation with the qualifying operator;

(C) is specifically constructed or refurbished and actually used primarily to house servers and related equipment and support staff for the processing, storage, and distribution of data;

(D) is used by a single qualifying occupant for the processing, storage, and distribution of data;

(E) is not used primarily by a telecommunications provider to place tangible personal property used to deliver telecommunications services; and

(F) has an uninterruptible power source, a backup generator, a fire suppression and prevention system, and physical security that includes restricted access, video surveillance, and electronic systems.

(3) “Permanent job” means an employment position that will exist for at least five years after the date the job is created.

(4) “Qualifying job” means a full-time, permanent job that pays at least 120 percent of the county average weekly wage in the county in which the job is based. The term includes a new employment position staffed by a third-party employer if a written contract exists between the third-party employer and a qualifying owner, qualifying operator, or qualifying occupant that provides that the employment position is permanently assigned to an associated qualifying large data center project.

(5) “Qualifying large data center project” means a large data center project that meets the qualifications prescribed by Subsection (d).

(6) “Qualifying operator” means a person who controls access to a qualifying large data center project, regardless of whether that person owns each item of tangible personal property located at the qualifying large data center project. A qualifying operator may also be the qualifying owner.

(7) “Qualifying owner” means a person who owns a building in which a qualifying large data center project is located. A qualifying owner may also be the qualifying operator.

(8) “Qualifying occupant” means a person who:

(A) contracts with a qualifying owner or qualifying operator to place, or cause to be placed, and to use tangible personal property at the qualifying large data center project; or

(B) in the case of a qualifying occupant who is also the qualifying owner and the qualifying operator, places or causes to be placed and uses tangible personal property at the qualifying large data center project.

(b) Except as otherwise provided by this section, tangible personal property that is necessary and essential to the operation of a qualifying large data center project is exempted from the taxes imposed by this chapter if the tangible personal property is purchased for installation at, incorporation into, or in the case of electricity, use in a qualifying large data center project by a qualifying owner, qualifying operator, or qualifying occupant, and the tangible personal property is:

(1) electricity;

(2) an electrical system;

(3) a cooling system;

(4) an emergency generator;

(5) hardware or a distributed mainframe computer or server;

(6) a data storage device;

(7) network connectivity equipment;

(8) a rack, cabinet, and raised floor system;

(9) a peripheral component or system;

(10) software;

(11) a mechanical, electrical, or plumbing system that is necessary to operate any tangible personal property described by Subdivisions (2)-(10);

(12) any other item of equipment or system necessary to operate any tangible personal property described by Subdivisions (2)-(11), including a fixture; and

(13) a component part of any tangible personal property described by Subdivisions (2)-(10).

(1) office equipment or supplies;

(2) maintenance or janitorial supplies or equipment;

(3) equipment or supplies used primarily in sales activities or transportation activities;

(4) tangible personal property on which the purchaser has received or has a pending application for a refund under Section 151.429;

(5) tangible personal property not otherwise exempted under Subsection (b) that is incorporated into real estate or into an improvement of real estate;

(6) tangible personal property that is rented or leased for a term of one year or less; or

(7) notwithstanding Section 151.3111, a taxable service that is performed on tangible personal property exempted under this section.

(d) Subject to Subsection (j), a large data center project may be certified by the comptroller as a qualifying large data center project for purposes of this section if, on or after June 1, 2015:

(1) a single qualifying occupant:

(A) contracts with a qualifying owner or qualifying operator to lease space in which the qualifying occupant will locate a large data center project; or

(B) occupies a space that was not previously used as a data center in which the qualifying occupant will locate a large data center project, in the case of a qualifying occupant who is also the qualifying operator and the qualifying owner; and

(2) the qualifying owner, qualifying operator, or qualifying occupant, independently or jointly:

(A) creates at least 40 qualifying jobs in the county in which the large data center project is located, not including jobs moved from one county in this state to another county in this state;

(B) on or after May 1, 2015, makes or agrees to make a capital investment of at least $500 million in that particular large data center project, the amount of which may not include a capital investment to replace personal property previously placed in service in that large data center project, over a five-year period beginning on the earlier of:

(i) the date the large data center project submits the application described by Subsection (e); or

(ii) the date the large data center project is certified by the comptroller as a qualifying large data center project; and

(C) agrees to contract for at least 20 megawatts of transmission capacity for operation of the large data center project.

(e) A large data center project that is eligible under Subsection (d) to be certified by the comptroller as a qualifying large data center project shall apply to the comptroller for certification and for the issuance of a registration number or numbers by the comptroller. The application must be made on a form prescribed by the comptroller and must include the information required by the comptroller. The application must include the name and contact information for the qualifying occupant, and, if applicable, the name and contact information for the qualifying owner and the qualifying operator who will claim the exemption authorized under this section. The application form must include a section for the applicant to certify that the capital investment required by Subsection (d)(2)(B) will be met independently or jointly by the qualifying occupant, qualifying owner, or qualifying operator within the time period prescribed by Subsection (d)(2)(B).

(f) The exemption provided by this section begins on the date the large data center project is certified by the comptroller as a qualifying large data center project and expires on the 20th anniversary of that date, if the qualifying occupant, qualifying owner, or qualifying operator, independently or jointly makes the capital investment of at least $500 million as provided by Subsection (d)(2)(B).

(h) The comptroller shall revoke all registration numbers issued in connection with a qualifying large data center project that the comptroller determines does not meet the requirements prescribed by Subsection (d). Each person who has the person’s registration number revoked by the comptroller is liable for taxes, including penalty and interest from the date of purchase, imposed under this chapter on purchases for which the person claimed an exemption under this section, regardless of whether the purchase occurred before the date the registration number was revoked.

(i) The comptroller shall adopt rules consistent with and necessary to implement this section, including rules relating to:

(1) a qualifying large data center project, qualifying owner, qualifying operator, and qualifying occupant;

(2) issuance and revocation of a registration number required under this section; and

(3) reporting and other procedures necessary to ensure that a qualifying large data center project, qualifying owner, qualifying operator, and qualifying occupant comply with this section and remain entitled to the exemption authorized by this section.

(j) A data center is not eligible to receive an exemption under this section if the data center is subject to an agreement limiting the appraised value of the data center’s property under former Subchapter B or C, Chapter 313.

Added by Acts 2015, 84th Leg., R.S., Ch. 412 (H.B. 2712), Sec. 1, eff. June 10, 2015.

Amended by:

Acts 2025, 89th Leg., R.S., Ch. 204 (H.B. 1620), Sec. 19.002(b), eff. September 1, 2025.

SUBCHAPTER I. REPORTS, PAYMENTS, AND METHODS OF REPORTING

Sec. 151.401. TAX DUE DATES. (a) The taxes imposed by this chapter are due and payable to the comptroller on or before the 20th day of the month following the end of each calendar month unless a taxpayer qualifies as a quarterly filer under Subsection (b) of this section or unless the taxpayer prepays the tax on a quarterly basis as permitted by Section 151.424 of this code.

(b) If a taxpayer owes less than $500 for a calendar month or $1,500 for a calendar quarter, the taxes are due and payable on the 20th day of the month following the end of the calendar quarter.

(d) Repealed by Acts 2013, 83rd Leg., R.S., Ch. 431, Sec. 3(1), eff. June 14, 2013.

(e) Repealed by Acts 2013, 83rd Leg., R.S., Ch. 431, Sec. 3(1), eff. June 14, 2013.

Acts 1981, 67th Leg., p. 1569, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., p. 2779, ch. 752, Sec. 10, eff. Jan. 1, 1982; Acts 1983, 68th Leg., p. 1362, ch. 281, Sec. 1, eff. Oct. 1, 1983; Acts 1993, 73rd Leg., ch. 486, Sec. 2.01, eff. Sept. 1, 1994.

Amended by:

Acts 2011, 82nd Leg., 1st C.S., Ch. 4 (S.B. 1), Sec. 13.01, eff. September 28, 2011.

Acts 2013, 83rd Leg., R.S., Ch. 431 (S.B. 559), Sec. 3(1), eff. June 14, 2013.

Sec. 151.402. TAX REPORT DATES. (a) A tax report required by this chapter for a reporting period is due on the same date that the tax payment for the period is due as provided by Section 151.401.

(b) Repealed by Acts 2013, 83rd Leg., R.S., Ch. 431, Sec. 3(2), eff. June 14, 2013.

Acts 1981, 67th Leg., p. 1569, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1993, 73rd Leg., ch. 486, Sec. 2.02, eff. Sept. 1, 1994.

Amended by:

Acts 2011, 82nd Leg., 1st C.S., Ch. 4 (S.B. 1), Sec. 13.02, eff. September 28, 2011.

Acts 2013, 83rd Leg., R.S., Ch. 431 (S.B. 559), Sec. 3(2), eff. June 14, 2013.

Sec. 151.403. WHO MUST FILE A REPORT. (a) A person subject to the sales tax shall file a tax report.

(b) A retailer engaged in business in this state as provided by Section 151.107 of this code shall file a tax report with respect to the use tax.

(c) A person who acquires a taxable item, the storage, use, or consumption of which is subject to the use tax, shall file a tax report if the person did not pay the use tax to a retailer.

Acts 1981, 67th Leg., p. 1569, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.405. OTHER DUE DATES SET BY COMPTROLLER. (a) The comptroller may require a seller, retailer, or purchaser to file a return or pay the taxes imposed by this chapter for a period other than a monthly period if necessary to ensure the payment or to facilitate the collection of the taxes due.

(b) A requirement under Subsection (a) of this section may by rule be made generally applicable to retailers providing amusement services at locations other than the regular business establishment of the retailer or to retailers who provide amusement services and who have no regular business establishment in this state.

Acts 1981, 67th Leg., p. 1570, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1983, 68th Leg., p. 1363, ch. 281, Sec. 2, eff. Oct. 1, 1983; Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 7, Sec. 17, eff. Oct. 2, 1984.

Sec. 151.406. CONTENTS AND FORM OF REPORT. (a) Except as provided by Section 151.407, a tax report required by this chapter must:

(1) for sales tax purposes, show the amount of the total receipts of a seller for the reporting period;

(2) for use tax purposes, show the amount of the total receipts from sales by a retailer of taxable items during the reporting period for storage, use, or consumption in this state;

(3) show the amount of the total sales prices of taxable items that are subject to the use tax during the reporting period and that were acquired for storage, use, or consumption in this state by a purchaser who did not pay the tax to a retailer;

(4) show the amount of the taxes due for the reporting period;

(5) show the amount of sales tax refunded for items exported beyond the territorial limits of the United States after receiving documentation under Section 151.307(b)(2); and

(6) include other information that the comptroller determines to be necessary for the proper administration of this chapter.

(b) The comptroller by rule may determine the manner of reporting gross proceeds from taxable rentals and leases of tangible personal property.

(d) A tax report must be signed by the person required to file it or by the person’s authorized agent.

Acts 1981, 67th Leg., p. 1570, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 2003, 78th Leg., ch. 1001, Sec. 5, eff. Jan. 1, 2004.

Sec. 151.407. SPECIAL USE TAX REPORTS. (a) The comptroller may require any person or class of persons who have in their possession or custody information relating to the sale of a taxable item, the storage, use, or consumption of which is subject to the use tax, to file a report.

(b) A report required under this section must:

(1) be filed at the time required by the comptroller; and

(2) contain the name and address of the purchaser of the tangible personal property, the sales price of the property, the date of the sale, and other information required by the comptroller.

Acts 1981, 67th Leg., p. 1570, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.408. ACCOUNTING BASIS FOR REPORTS. A taxpayer whose regular books are kept on a cash basis, accrual basis, or some other generally recognized accounting basis that accurately reflects the operation of the business may file the tax reports required by this chapter on the same basis that is used for the taxpayer’s regular books.

Acts 1981, 67th Leg., p. 1570, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.409. REPORTS AND PAYMENTS: WHERE MADE. A tax report or tax payment shall be delivered to the office of the comptroller.

Acts 1981, 67th Leg., p. 1570, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.410. METHOD OF REPORTING SALES TAX: GENERAL RULE. A seller shall compute the sales tax imposed by Subchapter C of this chapter to be paid to the comptroller by multiplying the percentage rate of the sales tax times the total receipts of the seller from all sales of taxable tangible personal property and of taxable services.

Acts 1981, 67th Leg., p. 1571, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.411. METHOD OF REPORTING: SELLERS HAVING SALES BELOW TAXABLE AMOUNT. (a) If not less than 50 percent of the total receipts of a seller from the sale of taxable items come from separate transactions in which the sales price is an amount on which no tax is produced, the seller may exclude the receipts from those transactions when reporting and paying the sales tax.

(b) A seller may not exclude any receipts from sales as permitted under Subsection (a) of this section unless the seller has received from the comptroller before the filing of the tax report written approval allowing the exclusion, and all receipts from sales of taxable tangible personal property and taxable services are subject to the tax until the approval is granted.

(c) The comptroller shall approve the reporting and computation of the sales tax as permitted under Subsection (a) of this section by a seller if the seller qualifies for the exclusion and if the seller submits to the comptroller satisfactory evidence that the seller can and will maintain records adequate to substantiate the authorized exclusion.

Acts 1981, 67th Leg., p. 1571, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 13, Sec. 3, eff. Oct. 2, 1984; Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1, Sec. 4, eff. Jan. 1, 1987; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 3, Sec. 2.

Sec. 151.412. OPTIONAL METHOD OF REPORTING: PERCENTAGE OF SALES. (a) A seller who is a retail grocer, a seller who operates a separate grocery department having separate records that are separately auditable, or any other seller whose taxable receipts from the sale of taxable items are less than 10 percent of the total receipts of the seller may determine the total taxable receipts of the grocer, separate grocery department, or other seller by:

(1) adding the amount of all invoices for merchandise sold to the seller during the preceding calendar or fiscal year to obtain the total sum of merchandise purchased;

(2) adding the amount of all invoices for exempt merchandise sold to the seller during the preceding calendar or fiscal year to obtain the total sum of exempt merchandise purchased;

(3) dividing the sum obtained under Subdivision (2) of this subsection by the sum obtained under Subdivision (1) of this subsection to obtain a percentage relationship;

(4) multiplying the percentage obtained under Subdivision (3) of this subsection times the total sales by the seller for the reporting period to obtain the total nontaxable sales of the seller; and

(5) subtracting the total nontaxable sales of the seller obtained under Subdivision (4) of this subsection from the total sales by the seller during the reporting period to obtain the total taxable receipts of the seller from sales of tangible personal property.

(b) A seller determining taxable receipts as provided by Subsection (a) of this section shall add to the total taxable receipts the sales prices of all purchases made by the seller that are subject to the use tax and on which the use tax has not been paid.

(c) If the comptroller audits a seller who qualifies for and uses the method of reporting allowed by this section and determines that the actual tax liability of the seller computed on the actual taxable receipts of the seller differs from the amount reported and paid under this section, the comptroller shall collect the difference due to the state, if any, or refund or credit the seller with the difference that is an overpayment to the state, if any.

(d) The comptroller may not assess a penalty or interest against a seller because of an underpayment of the actual tax due disclosed by an audit under Subsection (c) of this section unless the audit discloses wilful evasion of the tax or fraud. The state may not pay interest on an overpayment disclosed by an audit under Subsection (c) of this section.

(e) Under procedures adopted by and with the consent of the comptroller, a seller eligible to determine its total taxable receipts under this section may add to the amount provided by Subdivision (2) of Subsection (a) of this section an additional amount that represents that portion of the amount of all invoices for merchandise sold to the seller during the preceding calendar or fiscal year that was not considered exempt merchandise for purposes of Subdivision (1) of Subsection (a) of this section but that became exempt under Section 151.3141 of this code when sold.

Acts 1981, 67th Leg., p. 1571, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1987, 70th Leg., c. 1116, Sec. 2, eff. Oct. 1, 1987.

Sec. 151.413. OPTIONAL METHOD OF REPORTING: SMALL GROCERS. (a) A seller who is a retail grocer and whose annual total receipts do not exceed $100,000 may pay the taxes imposed by this chapter by multiplying 15 percent times the total receipts of the seller to obtain the amount of taxable receipts.

(b) A state audit of a retailer electing to report his taxable receipts as provided by this section is limited to determining whether or not the grocer is eligible to use this method. No additional tax may be assessed or a refund or credit granted because of a showing that the tax liability of the retail grocer electing this method of reporting differs or would differ under any other method of reporting.

(c) A retail grocer who elects to report under this section shall continue to report as provided by this section for three years unless the grocer’s total receipts for a year exceed $100,000.

(d) If a retail grocer electing to report under this section has gross receipts in excess of $100,000 for a year, the grocer is ineligible to continue reporting under this section beginning on the first day of the calendar month after the month in which the limitation was exceeded, shall report the ineligibility to the comptroller, and shall immediately cease to use the method of reporting permitted by this section.

(e) Subsection (b) of this section does not apply to audits or the tax liability of a retail grocer who fails to report his ineligibility to the comptroller as required by Subsection (d) of this section.

Acts 1981, 67th Leg., p. 1572, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.414. “RETAIL GROCER” DEFINED. In this subchapter, “retail grocer” means a retail vendor who sells food for human consumption off the premises, together with household supplies and nondurable household goods.

Acts 1981, 67th Leg., p. 1572, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.415. ASSESSMENT OF PENALTIES AND INTEREST AGAINST SELLER USING OPTIONAL METHOD OF REPORTING. The comptroller may assess a penalty and interest against a seller using an optional method of reporting under Section 151.412 or Section 151.413 of this code if the seller fails to file a tax report on or before its due date or fails to remit the correct amount of tax due with the report. This section prevails over Section 151.412(d) and Section 151.413(b) of this code.

Acts 1981, 67th Leg., p. 1572, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.416. COMMINGLED RECEIPTS AND TAX. A seller who has an accounting system under which the taxes collected under this chapter are commingled with the receipts from the sales of taxable items may compute his taxable receipts by:

(1) subtracting from the total receipts of the seller the receipts from the sales of items that are exempted or are specifically excluded from the taxes imposed by this chapter to obtain a remainder consisting of the commingled receipts from taxable sales and the taxes collected; and

(2) dividing this remainder by one plus the sales tax rate expressed as a decimal fraction to obtain a quotient that is the taxable receipts that may be reported under Section 151.410 of this code.

Acts 1981, 67th Leg., p. 1573, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 13, Sec. 4, eff. Oct. 2, 1984; Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1, Sec. 3, eff. Jan. 1, 1987; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 3, Sec. 3.

Sec. 151.417. DIRECT PAYMENT OF TAX BY PURCHASER. (a) The holder of a direct payment permit issued by the comptroller may give a blanket exemption certificate to sellers who sell, lease, or rent taxable items to the holder of the direct payment permit. The blanket exemption certificate covers all future sales of taxable items to the permit holder and relieves the seller of the obligation of collecting the taxes imposed by this chapter from the permit holder.

(b) A blanket exemption certificate given under this section must contain the direct payment permit number and the statement that the direct payment permit holder agrees to accrue and pay to this state all taxes that are or may become due on the taxable items sold under the exemption certificate to the permit holder.

Acts 1981, 67th Leg., p. 1573, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.4171. OPTIONAL REPORTING METHOD: PERCENTAGE-BASED. (a) In this section, “percentage-based reporting method” means a method by which a taxpayer categorizes purchase transactions according to standards specified in the letter of authorization, reviews an agreed-on sample of invoices in that category to determine the percentage of taxable transactions, and uses that percentage to calculate the amount of tax to be reported.

(b) The comptroller may authorize the holder of a direct payment permit to use a percentage-based reporting method. The authorized percentage must be used for a three-year period specified by the comptroller, unless the authorization is revoked by the comptroller.

(c) The comptroller may revoke the authorization to report under this section if the comptroller determines that the percentage being used is no longer representative because of a change:

(1) in law, including a change in the interpretation of a law or rule; or

(2) in the taxpayer’s business operations.

(d) The decision of the comptroller to deny or revoke authorization under this section is not appealable.

(e) In deciding whether to authorize reporting under this section, the comptroller may categorize transactions by dollar amount, by type of taxable item purchased, by the purpose for which the taxable item will be used, or by other standards appropriate to the taxpayer’s operations.

(f) The comptroller by rule may specify additional procedures that must be followed and conditions that must be met before the comptroller authorizes a taxpayer to report under this section.

Added by Acts 1999, 76th Leg., ch. 457, Sec. 2, eff. Oct. 1, 1999.

Sec. 151.418. ISSUANCE OF DIRECT PAYMENT PERMIT. (a) The comptroller shall issue a direct payment permit to an applicant for the permit who qualifies as provided by Section 151.419 of this code.

(b) The comptroller is the sole judge of an applicant’s qualifications, and the comptroller’s refusal to issue a permit to an applicant is not appealable.

(1) request permission from the comptroller to submit an amended application; or

(2) submit a new application for a direct payment permit after a reasonable period after the denial of the original application.

Acts 1981, 67th Leg., p. 1573, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.419. APPLICATION FOR DIRECT PAYMENT PERMITS: QUALIFICATIONS. (a) A person desiring a direct payment permit must file with the comptroller a written application for the permit.

(b) The application must be accompanied with:

(1) an agreement that is signed by the applicant or a responsible officer of an applicant corporation, that is in a form prescribed by the comptroller, and that provides that the applicant agrees to:

(A) accrue and pay all taxes imposed by Subchapter D of this chapter on the storage and use of all taxable items sold to or leased or rented by the permit holder unless the items are exempted from the taxes imposed by this chapter;

(B) pay the imposed taxes monthly on or before the 20th day of the month following the end of each calendar month; and

(C) waive the discount permitted by Section 151.423 of this code on the payment of all taxes under the direct payment permit only;

(2) a description, in the amount of detail that the comptroller requires, of the accounting method by which the applicant proposes to differentiate between taxable and exempt transactions; and

(3) records establishing that the applicant is a responsible person who annually purchases taxable items that have a value when purchased of $800,000 or more excluding the value of taxable items for which resale certificates were or could have been given.

Acts 1981, 67th Leg., p. 1573, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1983, 68th Leg., p. 849, ch. 197, Sec. 1, eff. May 24, 1983; Acts 1983, 68th Leg. p. 1363, ch. 281, Sec. 3, eff. Oct. 1, 1983.

Sec. 151.420. REVOCATION OF DIRECT PAYMENT PERMIT. (a) A person to whom a direct payment permit has been issued holds the permit as a matter of revocable privilege and not as a matter of right. The comptroller on his own initiative may cancel a direct payment permit, and the cancellation is not appealable.

(b) A person whose direct payment permit is canceled by the comptroller is entitled to written notice of the cancellation, which shall be sent by the comptroller by registered mail.

Acts 1981, 67th Leg., p. 1574, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.421. VOLUNTARY RELINQUISHMENT OF DIRECT PAYMENT PERMIT. (a) The holder of a direct payment permit may notify the comptroller that the direct payment permit is to be voluntarily relinquished.

(b) A direct payment permit and the direct payment agreement remain valid and enforceable until the comptroller issues a termination notice.

Acts 1981, 67th Leg., p. 1574, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.422. CANCELLATION OR TERMINATION OF DIRECT PAYMENT PERMIT: DUTY OF PERMIT HOLDER. (a) On the receipt of a notice issued under Section 151.420 of this code canceling a direct payment permit or of a notice issued under Section 151.421 of this code terminating a direct payment permit, the person who held the permit shall immediately notify each seller to whom a blanket exemption certificate has been given that the exemption certificate is no longer valid.

(b) The failure of a person to notify a seller as required by Subsection (a) of this section is a failure and refusal to pay the taxes imposed by this chapter by the person required to make the notification.

Acts 1981, 67th Leg., p. 1574, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.423. REIMBURSEMENT TO TAXPAYER FOR TAX COLLECTIONS. A taxpayer may deduct and withhold one-half of one percent of the amount of taxes due from the taxpayer on a timely return as reimbursement for the cost of collecting the taxes imposed by this chapter. The comptroller shall provide a card with each form distributed for the collection of taxes under this chapter. The card may be inserted by the taxpayer with the tax payment to provide for contribution of all or part of the reimbursement provided by this section for use as grants under Subchapter M, Chapter 56, Education Code. If the taxpayer chooses to contribute the reimbursement for the grants, the taxpayer shall include the amount of the reimbursement contribution with the tax payment. The comptroller shall transfer money contributed under this section for grants under Subchapter M, Chapter 56, Education Code, to the appropriate fund.

Acts 1981, 67th Leg., p. 1574, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1983, 68th Leg., p. 1364, ch. 281, Sec. 4, eff. Oct. 1, 1983; Acts 1985, 69th Leg., ch. 708, Sec. 18, eff. Aug. 26, 1985; Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec. 32; Acts 1999, 76th Leg., ch. 1590, Sec. 4, eff. June 19, 1999.

Sec. 151.424. DISCOUNT FOR PREPAYMENTS. (a) A taxpayer who prepays the taxpayer’s tax liability on the basis of a reasonable estimate of the tax liability for a quarter in which a prepayment is made or for a month in which a prepayment is made may deduct and withhold 1.25 percent of the amount of the prepayment in addition to the amount permitted to be deducted and withheld under Section 151.423 of this code. A reasonable estimate of the tax liability must be at least 90 percent of the tax ultimately due or the amount of tax paid in the same quarter, or month, if a monthly prepayer, in the last preceding year. Failure to prepay a reasonable estimate of the tax will result in the loss of the entire prepayment discount.

(b) In order to qualify for the deduction permitted by Subsection (a) of this section, the taxpayer must make the tax prepayment:

(1) on or before the 15th day of the second month of the calendar quarter for which the prepayment is made if the taxpayer pays the tax quarterly; or

(2) on or before the 15th day of the month for which the prepayment is made if the taxpayer pays the tax monthly.

(c) A taxpayer who prepays the tax liability as permitted by this section must file a report when due as provided by this chapter. The amount of a prepayment made by a taxpayer under this section shall be credited against the amount of actual tax liability of the taxpayer as shown on the tax report of the taxpayer. If there is a tax liability owed by the taxpayer in excess of the prepayment credit, the taxpayer shall send to the comptroller the remaining tax liability at the time of filing the quarterly or monthly report. The taxpayer is entitled to the deduction permitted under Section 151.423 of this code on the amount of the remaining tax liability.

(d) If the amount of a prepayment exceeds the actual tax liability, the excess of the prepayment shall be credited against future tax liability of the taxpayer or refunded to the taxpayer as provided by Subchapter C of Chapter 111 of this code.

Acts 1981, 67th Leg., p. 1574, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1983, 68th Leg., p. 1364, ch. 281, Sec. 5, eff. Oct. 1, 1983.

Sec. 151.425. FORFEITURE OF DISCOUNT OR REIMBURSEMENT. If a taxpayer fails to file a report required by this chapter when due or to pay the tax when due, the taxpayer forfeits any claim to a deduction or discount allowed under Section 151.423 or Section 151.424 of this code.

Acts 1981, 67th Leg., p. 1575, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.426. CREDITS AND REFUNDS FOR BAD DEBTS, RETURNED MERCHANDISE, AND REPOSSESSIONS. (a) A seller may withhold the payment of the tax on a portion of the sales price of a taxable item that remains unpaid by the purchaser if:

(1) during the reporting period in which the item was sold, leased, or rented the seller determines that the unpaid portion will remain unpaid;

(2) the seller enters the unpaid portion of the sales price in the seller’s books as a bad debt; and

(3) the bad debt is claimed as a deduction for federal tax purposes during the same or a subsequent reporting period.

(b) If the portion of a debt determined to be bad under Subsection (a) of this section is paid, the seller shall report and pay the tax on the portion during the reporting period in which the payment is made.

(c) Subject to Subsection (e), a retailer or any person who extends credit to a purchaser under a retailer’s private label credit agreement, or an assignee or affiliate of either, is entitled to credit or reimbursement for taxes paid on the portion of:

(1) an account determined to be worthless and actually charged off for federal income tax purposes; or

(2) the remaining unpaid sales price of a taxable item when the item is repossessed under a conditional sales contract.

(d) A seller is entitled to credit for the amount of taxes paid on the amount of a refund or credit made to a purchaser under a bona fide agreement in which the sales price of a taxable item is renegotiated. This credit applies to a refund or credit made under an agreement in settlement of a claim for an alleged breach of warranty on a taxable item sold by the seller to the person with whom the agreement is made.

(e) A person is entitled to a credit or reimbursement provided by Subsection (c) only if:

(1) the retailer:

(A) has a valid sales or use tax permit; and

(B) remits the tax for which the credit or reimbursement is sought;

(2) all payments on an account are prorated between taxable and nontaxable charges; and

(3) the retailer or person claiming the credit or reimbursement provides detailed records outlining:

(A) the amount the purchaser contracted to pay;

(B) taxable and nontaxable charges;

(D) the unpaid portion of the sales price assigned; and

(E) the taxpayer number of the seller who collected and remitted the tax.

(f) A person whose volume and character of uncollectible accounts warrants an alternative method of substantiating the reimbursement or credit may:

(1) maintain records other than the records specified in Subsection (e) if:

(A) the records fairly and equitably apportion taxable and nontaxable elements of a bad debt and compute the amount of sales tax imposed and remitted with respect to the taxable charges remaining unpaid on the debt; and

(B) the comptroller approves the procedures used; or

(2) implement a system to report its future tax responsibilities based on a historical percentage calculated from a sample of transactions if:

(A) the system utilizes records provided by the person claiming the credit or reimbursement; and

(B) the comptroller approves the procedures used.

(g) The comptroller may revoke the authorization to report under Subsection (f)(2) if the comptroller determines that the percentage being used is no longer representative because of:

(1) a change in law, including a change in the interpretation of an existing law or rule; or

(2) a change in the taxpayer’s business operations.

(h) A person claiming a credit or reimbursement under this section shall remit tax on any payments received on an account that has been written off and claimed as a bad debt.

(i) A person who is not a retailer may claim a credit or reimbursement authorized by Subsection (c) only for taxes imposed by Section 151.051 or 151.101.

(j) For purposes of this section, “affiliate” means any entity or entities that would be classified as a member of an affiliated group under 26 U.S.C. Section 1504.

Acts 1981, 67th Leg., p. 1575, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1983, 68th Leg., p. 1043, ch. 235, art. 7, Sec. 6, eff. Sept. 1, 1983; Acts 1999, 76th Leg., ch. 1467, Sec. 2.24, eff. Oct. 1, 1999.

Sec. 151.4261. CREDIT OR REIMBURSEMENT IN RETURN TRANSACTIONS. A seller is entitled to a credit or reimbursement equal to the amount of sales tax refunded to a purchaser when the purchaser receives a full or partial refund of the sales price of a returned taxable item.

Added by Acts 2009, 81st Leg., R.S., Ch. 1378 (S.B. 1199), Sec. 2, eff. September 1, 2009.

Sec. 151.427. DEDUCTION FOR PROPERTY ON WHICH THE TAX IS PAID AND HELD FOR RESALE. (a) A seller who has paid the tax imposed by this chapter on the sales price of tangible personal property acquired for storage or use may deduct the amount of the tax paid if the seller resells, leases, or rents the item to another in the regular course of business before the seller has made any use of the property other than retaining, displaying, or demonstrating it while holding it for sale in the regular course of business.

(b) If a deduction is taken under Subsection (a) of this section, the person who sold the property to the seller may not receive a credit or refund with respect to the sale of the property to the seller.

(c) The deduction allowed by Subsection (a) of this section must be taken in accordance with any rule on the deduction made by the comptroller.

Acts 1981, 67th Leg., p. 1576, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.428. INTEREST CHARGED BY RETAILER ON AMOUNTS OF TAXES FINANCED. (a) A retailer who sells taxable items on credit or under any other deferred payment agreement and charges interest or time price differential on the amount of the credit extended for the payment of the sales price of the item and the amount of all sales taxes, and who remits the tax and files tax reports to the comptroller on the basis of the cash system of accounting, shall pay to the comptroller at the time of making each tax report under this chapter an amount calculated according to whichever of the following yields the greater amount:

(1) one-half of the amount of interest or time price differential received by the retailer on credit extended to the purchaser for the payment of the amount of all sales taxes imposed; or

(2)(A) the amount of interest or time price differential received by the retailer on credit extended to the purchaser for the payment of the amount of all sales taxes imposed, less

(B) an amount of interest or time price differential at a rate of nine percent per year received on credit extended by the retailer to the purchaser for the payment of the sales tax.

(b) The deduction provided by Paragraph (B) of Subdivision (2) of Subsection (a) of this section is allowed only if the rate of interest or time price differential charged by the retailer on the credit extended for payment of the sales tax and the method of computing the interest or the time price differential are uniform with the rate charged by the retailer on the credit extended on the sales price and the method of computing the interest or time price differential.

(c) The reporting, collection, refund, and penalty provisions of this chapter and Subtitle B of this title apply to the payments required by this section, except that Sections 151.423 and 151.424 of this code do not apply to this section.

(d) The payments required by this section are in addition to other taxes imposed by this chapter, Chapter 321 of this code, Subchapter I, Chapter 451, Transportation Code, and Subchapter I, Chapter 452, Transportation Code.

(e) The revenue received under this section is allocated as provided by Section 151.801 of this code.

Added by Acts 1983, 68th Leg., p. 1039, ch. 235, art. 7, Sec. 3(a), eff. Sept. 1, 1983. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.27(b)(2), eff. Aug. 28, 1989; Acts 1997, 75th Leg., ch. 165, Sec. 30.250, eff. Sept. 1, 1997.

Sec. 151.429. TAX REFUNDS FOR ENTERPRISE PROJECTS.

(a) An enterprise project is eligible for a refund in the amount provided by this section of the taxes imposed by this chapter on purchases of all taxable items purchased for use at the qualified business site related to the project or activity.

(b) Subject to the limitations provided by Subsection (c) of this section, an enterprise project qualifies for a refund of taxes under this section based on the amount of capital investment made at the qualified business site, the project’s designation level, and the refund per job with a maximum refund to be included in a computation of a tax refund for the project. A capital investment at the qualified business site of:

(1) $40,000 to $399,999 will result in a refund of up to $2,500 per job with a maximum refund of $25,000 for the creation or retention of 10 jobs;

(2) $400,000 to $999,999 will result in a refund of up to $2,500 per job with a maximum refund of $62,500 for the creation or retention of 25 jobs;

(3) $1,000,000 to $4,999,999 will result in a refund of up to $2,500 per job with a maximum refund of $312,500 for the creation or retention of 125 jobs;

(4) $5,000,000 or more will result in a refund of up to $2,500 per job with a maximum refund of $1,250,000 for the creation or retention of 500 jobs, except as provided by Subdivision (5) or (6);

(5) $150,000,000 to $249,999,999 will result in a refund of up to $5,000 per new permanent job with a maximum refund of $2,500,000 for the creation of 500 new permanent jobs if the Texas Economic Development Bank designates the project as a double jumbo enterprise project; or

(6) $250,000,000 or more will result in a refund of up to $7,500 per new permanent job with a maximum refund of $3,750,000 for the creation of at least 500 new permanent jobs if the Texas Economic Development Bank designates the project as a triple jumbo enterprise project.

(c) The total amount of tax refund that an enterprise project may apply for in a state fiscal year may not exceed $250,000, at not more than $2,500 per job. The total amount of tax refund that a double jumbo enterprise project may apply for in a state fiscal year may not exceed $500,000, at not more than $5,000 per new permanent job. The total amount of tax refund that a triple jumbo enterprise project may apply for in a state fiscal year may not exceed $750,000, at not more than $7,500 per new permanent job. If an enterprise project, double jumbo enterprise project, or triple jumbo enterprise project qualifies in a state fiscal year for a refund of taxes in an amount in excess of the applicable limitation provided by this subsection, it may apply for a refund of those taxes in a subsequent year, subject to the applicable limitation for each year. The total amount that may be refunded to:

(1) an enterprise project under this section may not exceed the amount determined by multiplying $250,000 by the number of state fiscal years during which the enterprise project created or retained one or more jobs for qualified employees;

(2) a double jumbo enterprise project under this section may not exceed the amount determined by multiplying $500,000 by the number of state fiscal years during which the double jumbo enterprise project created one or more new permanent jobs for qualified employees; or

(3) a triple jumbo enterprise project under this section may not exceed the amount determined by multiplying $750,000 by the number of state fiscal years during which the triple jumbo enterprise project created one or more new permanent jobs for qualified employees.

(d) To receive a refund under this section, an enterprise project must apply to the comptroller for the refund. The Texas Economic Development Bank established under Chapter 489, Government Code, shall provide the comptroller with the assistance that the comptroller requires in administering this section.

(e) In this section:

(1) “Enterprise project” means a project or activity designated by the Texas Economic Development Bank as an enterprise project under Chapter 2303, Government Code.

(2) “Qualified employee” and “qualified hotel project” have the meanings assigned to those terms by Section 2303.003, Government Code.

(3) “New permanent job” has the meaning assigned by Section 2303.401, Government Code.

(4) “Retained job” has the meaning assigned by Section 2303.401, Government Code.

(5) “Double jumbo enterprise project” and “triple jumbo enterprise project” have the meanings assigned by Section 2303.407, Government Code.

(6) “Half enterprise project” means an enterprise project split into two half designations as provided by Section 2303.406(d-1), Government Code.

(f) For the purposes of Subsection (a), items bought by a project after the date it is designated as a project, or within 90 days before the date of designation, may be considered eligible for refund.

(g) The refund provided by this section is conditioned on the enterprise project maintaining at least the same level of employment of qualified employees as existed at the time it qualified for a refund for a period of three years from that date. The comptroller shall annually certify whether that level of employment of qualified employees has been maintained. On certifying that such a level has not been maintained, the comptroller shall assess that portion of the refund attributable to any such decrease in employment, including penalty and interest from the date of the refund.

(h) Notwithstanding the other provisions of this section, the owner of a qualified hotel project shall receive a rebate, refund, or payment of 100 percent of the sales and use taxes paid or collected by the qualified hotel project or businesses located in the qualified hotel project pursuant to this chapter and 100 percent of the hotel occupancy taxes paid by persons for the use or possession of or for the right to the use or possession of a room or space at the qualified hotel project pursuant to the provisions of Chapter 156 during the first 10 years after such qualified hotel project is open for initial occupancy. The comptroller shall deposit the taxes in trust in a separate suspense account of the qualified hotel project. A suspense account is outside the state treasury, and the comptroller may make a rebate, refund, or payment authorized by this section without the necessity of an appropriation. The comptroller shall rebate, refund, or pay to each qualified hotel project eligible taxable proceeds to which the project is entitled under this section at least monthly.

(i) As provided by Subsection (c), a double jumbo enterprise project is eligible for a maximum refund of $500,000 and a triple jumbo enterprise project is eligible for a maximum refund of $750,000 in each state fiscal year.

(j) An enterprise project approved by the Texas Economic Development Bank after September 1, 2003, may not receive a refund before September 1, 2005.

(k) A half enterprise project is eligible for a maximum refund not to exceed $125,000 in each state fiscal year and is subject to the capital investment and job allocation requirements under Subsection (b)(1), (2), or (3).

Added by Acts 1987, 70th Leg., ch. 765, Sec. 2, eff. Aug. 31, 1987. Amended by Acts 1989, 71st Leg., ch. 471, Sec. 5, eff. Sept. 1, 1989; Acts 1989, 71st Leg., ch. 1106, Sec. 21, 22, eff. Aug. 28, 1989; Acts 1991, 72nd Leg., 2nd C.S., ch. 11, Sec. 56, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 231, Sec. 9, 10, eff. Aug. 30, 1993; Acts 1993, 73rd Leg., ch. 268, Sec. 41, eff. Sept. 1, 1993; Acts 1993, 73rd Leg., ch. 986, Sec. 28, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 76, Sec. 5.57, 5.95(21), eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 977, Sec. 1, eff. Aug. 28, 1995; Acts 1995, 74th Leg., ch. 985, Sec. 11, eff. Sept. 1, 1995; Acts 1999, 76th Leg., ch. 1121, Sec. 6, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1467, Sec. 2.25, 2.26, eff. Oct. 1, 1999; Acts 2001, 77th Leg., ch. 1134, Sec. 1.06, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1134, Sec. 2.04, eff. Sept. 1, 2005; Acts 2001, 77th Leg., ch. 1420, Sec. 18.010, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 814, Sec. 3.51, 3.52, 3.53, eff. Sept. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1114 (H.B. 3694), Sec. 20, eff. June 15, 2007.

Acts 2011, 82nd Leg., R.S., Ch. 179 (S.B. 977), Sec. 2, eff. May 28, 2011.

Acts 2013, 83rd Leg., R.S., Ch. 490 (S.B. 1719), Sec. 3, eff. June 14, 2013.

Acts 2015, 84th Leg., R.S., Ch. 227 (H.B. 1964), Sec. 3, eff. May 29, 2015.

Acts 2015, 84th Leg., R.S., Ch. 591 (S.B. 100), Sec. 11, eff. September 1, 2015.

Acts 2015, 84th Leg., R.S., Ch. 591 (S.B. 100), Sec. 12, eff. September 1, 2015.

Sec. 151.4291. TAX REFUNDS FOR DEFENSE READJUSTMENT PROJECTS.

(a) A defense readjustment project is eligible for a refund in the amount provided by this section of the taxes imposed by this chapter on purchases of:

(1) equipment or machinery sold to a defense readjustment project for use in a readjustment zone;

(2) building materials sold to a defense readjustment project for use in remodeling, rehabilitating, or constructing a structure in a readjustment zone;

(3) labor for remodeling, rehabilitating, or constructing a structure by a defense readjustment project in a readjustment zone; and

(4) electricity and natural gas purchased and consumed in the normal course of business in the readjustment zone.

(b) Subject to the limitations provided by Subsection (c) of this section, a defense readjustment project qualifies for a refund of taxes under this section of $2,500 for each new permanent job or job that has been retained by the defense readjustment project for a qualified employee.

(c) The total amount of tax refund that a defense readjustment project may apply for in a state fiscal year may not exceed $250,000. If a defense readjustment project qualifies in a state fiscal year for a refund of taxes in an amount in excess of the limitation provided by this subsection, it may apply for a refund of those taxes in a subsequent year, subject to the $250,000 limitation for each year. However, a defense readjustment project may not apply for a refund under this section after the end of the state fiscal year immediately following the state fiscal year in which the defense readjustment project’s designation as a defense readjustment project expires or is removed. The total amount that may be refunded to a defense readjustment project under this section may not exceed the amount determined by multiplying $250,000 by the number of state fiscal years during which the defense readjustment project created one or more jobs for qualified employees.

(d) To receive a refund under this section, a defense readjustment project must apply to the comptroller for the refund. The Texas Economic Development Bank shall provide the comptroller with the assistance that the comptroller requires in administering this section.

(e) In this section:

(1) “Defense readjustment project” means a person designated by the Texas Economic Development Bank as a defense readjustment project under Chapter 2310, Government Code.

(2) “Readjustment zone” and “qualified employee” have the meanings assigned to those terms by Section 2310.001, Government Code.

(3) “New permanent job” means a new employment position created by a qualified business as described by Section 2310.302, Government Code, that:

(A) has provided at least 1,820 hours of employment a year to a qualified employee; and

(B) is intended to exist during the period that the qualified business is designated as a defense readjustment project under Chapter 2310, Government Code.

(g) The refund provided by this section is conditioned on the defense readjustment project maintaining at least the same level of employment of qualified employees as existed at the time it qualified for a refund for a period of three years from that date. The comptroller shall annually certify to the Legislative Budget Board whether that level of employment of qualified employees has been maintained. On certifying that such a level has not been maintained, the comptroller shall assess that portion of the refund attributable to any such decrease in employment, including penalty and interest from the date of the refund.

(h) Notwithstanding Section 171.103 or 171.1032, a receipt from a service performed by a defense readjustment project in a readjustment zone is not a receipt from business done in this state.

Added by Acts 1997, 75th Leg., ch. 114, Sec. 2, eff. May 19, 1997. Amended by Acts 1999, 76th Leg., ch. 1467, Sec. 2.27, 2.28, eff. Oct. 1, 1999; Acts 2001, 77th Leg., ch. 1134, Sec. 1.07, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1134, Sec. 2.05, eff. Sept. 1, 2005; Acts 2003, 78th Leg., ch. 814, Sec. 3.54, 3.55, eff. Sept. 1, 2003.

For expiration of this section, see Subsection (m).

Sec. 151.4292. TAX REFUND PILOT PROGRAM FOR CERTAIN PERSONS WHO EMPLOY APPRENTICES. (a) In this section:

(1) “Executive director” means the executive director of the Texas Workforce Commission.

(2) “Qualified apprenticeship” means an apprenticeship program that is:

(A) certified as an industry-recognized apprenticeship program by an entity determined to meet United States Department of Labor criteria; or

(B) registered with the United States Department of Labor and qualified to receive funding provided through the Texas Workforce Commission under Chapter 133, Education Code.

(b) A person is eligible for a refund in the amount and under the conditions provided by this section of the taxes paid under this chapter during a calendar year if the person is certified by the executive director under Subsection (f) and employs at least one apprentice in a qualified apprenticeship position for at least seven months during the calendar year. A person is not considered to be employed in a qualified apprenticeship position for purposes of this section:

(1) after the earlier of:

(A) the fourth anniversary of employment in the position; or

(B) the conclusion of the term of the apprenticeship position; or

(2) if the person was employed in another position by the employer immediately before beginning employment in the apprenticeship position.

(c) Subject to Subsections (d) and (e), the amount of the refund for a calendar year in connection with each apprentice described by Subsection (b) is $2,500.

(d) The total amount of the refund for a calendar year is equal to the lesser of:

(1) the amount allowed under Subsection (c) for the calendar year for each apprentice described by Subsection (b), not to exceed the maximum number of apprentices provided by Subsection (e); or

(2) the amount of sales and use taxes paid by the person during the calendar year.

(e) The maximum number of apprentices in connection with whom a person may receive a refund in a calendar year is:

(1) one; or

(2) not more than six if at least half of the apprentices employed are:

(A) foster children who have transitioned or are transitioning to independent living, as described in Section 264.121, Family Code;

(B) military veterans, as defined by Section 55.001, Occupations Code;

(D) women.

(f) A person may not apply for a refund under this section unless the executive director certifies that the person is able to employ apprentices in qualified apprenticeships. A person must apply to the executive director to obtain certification. The executive director shall create an application form for the certification.

(g) The executive director may certify not more than 100 persons under Subsection (f) at any time. If the number of eligible applicants exceeds the limit provided by this subsection, the executive director shall select applicants for certification according to rules adopted under Subsection (h).

(h) The executive director shall adopt rules that establish merit-based criteria for selecting persons to certify from among those who apply. The rules must require that the executive director give preference to applicants who:

(1) offer qualified apprenticeships in areas of this state that are not designated as metropolitan statistical areas by the United States Office of Management and Budget; and

(2) provide training and skills development in emerging or developing occupational fields.

(i) The executive director shall issue a certificate to each person certified under Subsection (f). The certificate must confirm that the person is eligible to apply for a refund under this section.

(j) A person must apply to the comptroller for a refund under this section. The person must include with the application the certificate issued to the person under Subsection (i) and any other information the comptroller requires.

(k) Not later than September 1, 2024, the executive director shall prepare and deliver to the governor, the lieutenant governor, the speaker of the house of representatives, and the presiding officer of each legislative standing committee with primary jurisdiction over taxation a report that evaluates the effect of the pilot program on the employment outcomes and earnings of apprentices with respect to whom refunds are granted under the pilot program under this section. The report must include a recommendation regarding whether the pilot program should be continued, expanded, or terminated.

(l) A person who applies for a refund under this section shall provide to the executive director information the executive director requests to prepare the report described by Subsection (k).

(m) This section expires December 31, 2026.

Added by Acts 2021, 87th Leg., R.S., Ch. 401 (S.B. 1524), Sec. 1, eff. January 1, 2022.

Sec. 151.430. DETERMINATION OF OVERPAID AMOUNTS. (a) This section applies to the tax on purchases paid by a person holding a permit under this chapter who has purchased taxable items for use in this state and has remitted tax on those items in error to this state or has paid tax on those items in error to a retailer holding a permit under this chapter.

(b) A person to whom this section applies may compute the amount of overpayment by use of a projection based on a sampling of transactions. The sampling method used must comply with generally accepted sampling methods as approved by the comptroller.

(c) The person may obtain reimbursement for amounts determined to have been overpaid by taking a credit on one or more sales tax returns or by filing a claim for refund with the comptroller within the limitation period specified by Subchapter D, Chapter 111.

(d) The person must record the method by which the projection and computation were performed and must make available on request by the comptroller the records on which the projection and computation were based.

(e) The comptroller may adopt rules specifying additional procedures that must be followed in connection with claiming a credit under this section.

Added by Acts 1999, 76th Leg., ch. 457, Sec. 3, eff. Oct. 1, 1999.

Sec. 151.4305. TAX REFUNDS FOR OIL OR GAS SEVERANCE TAXPAYERS. (a) Notwithstanding Section 111.104(b), a person who files a report under Section 201.203, 201.2035, 202.201, or 202.202 and who does not hold a permit under this chapter may obtain a refund for taxes paid under this chapter in error to a person who holds a permit under this chapter by filing a claim for refund with the comptroller within the limitation period specified by Subchapter D, Chapter 111.

(b) The comptroller by rule may provide additional procedures for claiming a refund under this section.

Added by Acts 2021, 87th Leg., R.S., Ch. 183 (S.B. 833), Sec. 1, eff. September 1, 2021.

Sec. 151.431. SALES AND USE TAX REFUND FOR JOB RETENTION. (a) A qualified business operating in the jurisdiction of the nominating governmental entity for at least three consecutive years may apply for and be granted a onetime refund of sales and use tax paid by the qualified business after certification of the qualified business as provided by Subsection (b) of this section to a vendor or directly to the state for the purchase of equipment or machinery sold to the business for use in an enterprise project if the governing body or bodies certify to the comptroller that the business is retaining 10 or more jobs held by qualified employees during the year. For the purposes of this subsection “job” means an existing employment position of a qualified business that has provided employment to a qualified employee of at least 1,820 hours annually.

(b) Only qualified businesses that have been certified as eligible for a refund under this section by the governing body or bodies to the comptroller, including certification of the number of jobs retained, are entitled to the refund.

(d) The total amount of the onetime refund that a qualified business may apply for may not exceed $500 for each qualified employee retained, up to a limit of $5,000 for each qualified business.

(e) In this section:

(1) “Enterprise zone” and “qualified employee” have the meanings assigned to those terms by Section 2303.003, Government Code.

(2) “Governing body” means the governing body of a municipality or county that applied to have the project or activity of a qualified business designated as an enterprise project under Section 2303.405, Government Code.

(3) “Qualified business” means a person that is certified as a qualified business under Section 2303.402, Government Code.

Added by Acts 1989, 71st Leg., ch. 1106, Sec. 23, eff. Sept. 1, 1991. Amended by Acts 1993, 73rd Leg., ch. 268, Sec. 42, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 76, Sec. 5.58, eff. Sept. 1, 1995; Acts 1999, 76th Leg., ch. 1467, Sec. 2.29, eff. Oct. 1, 1999; Acts 2003, 78th Leg., ch. 814, Sec. 3.56, 3.57, 6.01(10), eff. Sept. 1, 2003.

Sec. 151.432. DEDUCTIONS OF TAX ON TICKET OR ADMISSION DOCUMENT TO AMUSEMENT SERVICE. (a) A reseller of a ticket or admission document to an amusement service may deduct from taxable sales reported the adjusted value of the ticket or admission document purchased for resale from a non-permitted purchaser of the ticket or admission document if:

(1) the taxes imposed by this chapter were paid by the purchaser and the purchaser does not hold a permit issued under this chapter;

(2) language on the ticket or admission document purchased for resale states that all taxes have been included in the price of the ticket or admission document;

(3) the ticket or admission document for which a deduction is claimed was not purchased tax-free by use of a resale or exemption certificate; and

(4) the ticket or admission document is actually resold.

(b) The reseller’s books and records must be kept in accordance with the requirements of Section 151.025 and must:

(1) identify the non-permitted purchaser;

(2) document the face value of any ticket or admission document purchased by a non-permitted purchaser;

(3) document that sales tax was included in a ticket or admission document purchased by a non-permitted purchaser;

(4) document the sale of the ticket or admission document; and

(5) account for any remaining inventory of unsold tickets or admission documents.

(c) The reseller may satisfy Subsection (b)(3) by retaining a reproduction of a ticket or admission document to the amusement service.

(d) In this section, “adjusted value of a ticket or admission document” means the face value of the ticket or admission document, less the included state or local sales or use taxes.

Added by Acts 1997, 75th Leg., ch. 1099, Sec. 1, eff. Oct. 1, 1997.

Sec. 151.433. DEDUCTION FOR CERTAIN TAXPAYERS PURCHASING TEXAS FARM-RAISED OYSTERS. (a) In this section:

(1) “Food service establishment” has the meaning assigned by Section 437.001, Health and Safety Code.

(2) “Texas farm-raised oyster” means an oyster cultivated in the waters of this state in accordance with all applicable state and federal regulations.

(b) A taxpayer may deduct from the taxpayer’s taxable sales for the year, quarter, or month in which the sale is reported the amount determined under Subsection (c) if the taxpayer owns a food service establishment and purchases Texas farm-raised oysters to be prepared and served at the establishment.

(c) A taxpayer may deduct from the taxpayer’s taxable sales for a year, quarter, or month for each food service establishment for which a permit has been issued to the taxpayer under this chapter the amount equal to $5 for every 100 Texas farm-raised oysters purchased for preparation and service at the food service establishment during the year, quarter, or month, as applicable.

(e) The comptroller may adopt rules necessary to implement and administer this section.

Added by Acts 2025, 89th Leg., R.S., Ch. 626 (H.B. 3486), Sec. 1, eff. October 1, 2025.

Sec. 151.434. DEDUCTION FOR CERTAIN TAXPAYERS PARTICIPATING IN OYSTER SHELL RECYCLING PROGRAM. (a) In this section:

(1) “Food service establishment” has the meaning assigned by Section 437.001, Health and Safety Code.

(2) “Qualified oyster shell recycling program” means an oyster shell recycling program recognized by the comptroller as a qualified oyster shell recycling program.

(b) A taxpayer may deduct from the taxpayer’s taxable sales for the year, quarter, or month in which the sale is reported the amount determined under Subsection (c) if the taxpayer owns a food service establishment and participates in a qualified oyster shell recycling program.

(c) A taxpayer may deduct from the taxpayer’s taxable sales for a year, quarter, or month for each food service establishment for which a permit has been issued to the taxpayer under this chapter the amount equal to $2 for each 50 pounds of oyster shells collected at the food service establishment and provided by the taxpayer to a project that recycles oyster shells as a result of the taxpayer’s participation in a qualified oyster shell recycling program during the year, quarter, or month, as applicable.

(d) The comptroller may require a taxpayer to provide any information the comptroller determines is reasonably necessary to determine the accuracy of the amount deducted by the taxpayer under this section. The comptroller may request the assistance of the Parks and Wildlife Department in determining whether an oyster shell recycling program should be recognized as a qualified oyster shell recycling program and may consult with the department regarding other matters related to the implementation and administration of this section.

(e) The comptroller may adopt rules necessary to implement and administer this section, and may consult with the Parks and Wildlife Department and other relevant institutions and organizations when adopting the rules.

Added by Acts 2025, 89th Leg., R.S., Ch. 627 (H.B. 3487), Sec. 1, eff. October 1, 2025.

SUBCHAPTER I-1. REPORTS BY PERSONS INVOLVED IN THE MANUFACTURE AND DISTRIBUTION OF ALCOHOLIC BEVERAGES

Sec. 151.461. DEFINITIONS. In this subchapter:

(1) “Brewer” means a person required to hold a brewer’s license under Chapter 62, Alcoholic Beverage Code.

(1-a) “Brewpub” means a brewpub for which a person holds a brewpub license under Chapter 74, Alcoholic Beverage Code.

(2) “Distributor” means a person required to hold:

(A) a general distributor’s license under Chapter 64, Alcoholic Beverage Code; or

(B) a branch distributor’s license under Chapter 66, Alcoholic Beverage Code.

(3) Repealed by Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 410(b), eff. September 1, 2021.

(4) “Package store local distributor” means a person required to hold:

(A) a package store permit under Chapter 22, Alcoholic Beverage Code; and

(B) a local distributor’s permit under Chapter 23, Alcoholic Beverage Code.

(5) “Retailer” means a person required to hold:

(A) a wine and malt beverage retailer’s permit under Chapter 25, Alcoholic Beverage Code;

(B) a wine and malt beverage retailer’s off-premise permit under Chapter 26, Alcoholic Beverage Code;

(D) a mixed beverage permit under Chapter 28, Alcoholic Beverage Code;

(E) a private club registration permit under Chapter 32, Alcoholic Beverage Code;

(F) a certificate issued to a fraternal or veterans organization under Section 32.11, Alcoholic Beverage Code;

(G) a retail dealer’s on-premise license under Chapter 69, Alcoholic Beverage Code;

(H) a retail dealer’s off-premise license under Chapter 71, Alcoholic Beverage Code, except for a dealer who also holds a package store permit under Chapter 22, Alcoholic Beverage Code; or

(I) a brewpub license under Chapter 74, Alcoholic Beverage Code.

(6) “Wholesaler” means a person required to hold:

(A) a winery permit under Chapter 16, Alcoholic Beverage Code;

(B) a wholesaler’s permit under Chapter 19, Alcoholic Beverage Code; or

Transferred, redesignated and amended from Tax Code, Section 151.433 by Acts 2011, 82nd Leg., R.S., Ch. 145 (H.B. 11), Sec. 3, eff. September 1, 2011.

Amended by:

Acts 2017, 85th Leg., R.S., Ch. 1107 (H.B. 4042), Sec. 2, eff. September 1, 2017.

Acts 2019, 86th Leg., R.S., Ch. 1332 (H.B. 4542), Sec. 3, eff. September 1, 2019.

Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 398, eff. September 1, 2021.

Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 410(b), eff. September 1, 2021.

Acts 2021, 87th Leg., R.S., Ch. 915 (H.B. 3607), Sec. 19.003, eff. September 1, 2021.

Sec. 151.462. REPORTS BY BREWERS, BREWPUBS, WHOLESALERS, AND DISTRIBUTORS. (a) The comptroller shall require each brewer, brewpub, wholesaler, distributor, or package store local distributor to file with the comptroller a report each month of alcoholic beverage sales to retailers in this state.

(b) Each brewer, brewpub, wholesaler, distributor, or package store local distributor shall file a separate report for each permit or license held on or before the 25th day of each month. The report must contain the following information for the preceding calendar month’s sales in relation to each retailer:

(1) the brewer’s, brewpub’s, wholesaler’s, distributor’s, or package store local distributor’s name, address, taxpayer number and outlet number assigned by the comptroller, and alphanumeric permit or license number issued by the Texas Alcoholic Beverage Commission;

(2) the retailer’s:

(A) name and address, including street name and number, city, and zip code;

(B) taxpayer number assigned by the comptroller; and

(C) alphanumeric permit or license number issued by the Texas Alcoholic Beverage Commission for each separate retail location or outlet to which the brewer, brewpub, wholesaler, distributor, or package store local distributor sold the alcoholic beverages that are listed on the report; and

(3) the monthly net sales made by the brewer, brewpub, wholesaler, distributor, or package store local distributor to the retailer for each outlet or location covered by a separate retail permit or license issued by the Texas Alcoholic Beverage Commission, including separate line items for:

(A) the number of units of alcoholic beverages;

(B) the individual container size and pack of each unit;

(D) the type of beverage, such as distilled spirits, wine, or malt beverage;

(E) the universal product code of the alcoholic beverage; and

(F) the net selling price of the alcoholic beverage.

(c) Except as provided by this subsection, the brewer, brewpub, wholesaler, distributor, or package store local distributor shall file the report with the comptroller electronically. The comptroller may establish procedures to temporarily postpone the electronic reporting requirement for a brewer, brewpub, wholesaler, distributor, or package store local distributor who demonstrates to the comptroller an inability to comply because undue hardship would result if it were required to file the return electronically. If the comptroller determines that another technological method of filing the report is more efficient than electronic filing, the comptroller may establish procedures requiring its use by brewers, brewpubs, wholesalers, distributors, and package store local distributors.

Added by Acts 2011, 82nd Leg., R.S., Ch. 145 (H.B. 11), Sec. 3, eff. September 1, 2011.

Amended by:

Acts 2019, 86th Leg., R.S., Ch. 1332 (H.B. 4542), Sec. 4, eff. September 1, 2019.

Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 399, eff. September 1, 2021.

Sec. 151.463. RULES. The comptroller may adopt rules to implement this subchapter.

Added by Acts 2011, 82nd Leg., R.S., Ch. 145 (H.B. 11), Sec. 3, eff. September 1, 2011.

Sec. 151.464. CONFIDENTIALITY. Except as provided by Section 111.006, information contained in a report required to be filed by this subchapter is confidential and not subject to disclosure under Chapter 552, Government Code.

Added by Acts 2011, 82nd Leg., R.S., Ch. 145 (H.B. 11), Sec. 3, eff. September 1, 2011.

Sec. 151.465. APPLICABILITY TO CERTAIN BREWERS. This subchapter applies only to a brewer permitted under Chapter 12A, Alcoholic Beverage Code.

Added by Acts 2011, 82nd Leg., R.S., Ch. 145 (H.B. 11), Sec. 3, eff. September 1, 2011.

Amended by:

Acts 2013, 83rd Leg., R.S., Ch. 533 (S.B. 516), Sec. 3, eff. June 14, 2013.

Sec. 151.466. APPLICABILITY TO CERTAIN BREWERS. This subchapter applies only to a brewer licensed under Chapter 62A, Alcoholic Beverage Code.

Added by Acts 2011, 82nd Leg., R.S., Ch. 145 (H.B. 11), Sec. 3, eff. September 1, 2011.

Amended by:

Acts 2013, 83rd Leg., R.S., Ch. 534 (S.B. 517), Sec. 3, eff. June 14, 2013.

Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 400, eff. September 1, 2021.

Sec. 151.4661. APPLICABILITY TO CERTAIN BREWPUBS. This subchapter applies only to a brewpub that engages in activities authorized by Section 74.08, Alcoholic Beverage Code.

Added by Acts 2019, 86th Leg., R.S., Ch. 1332 (H.B. 4542), Sec. 5, eff. September 1, 2019.

Sec. 151.467. SUSPENSION OR CANCELLATION OF PERMIT. If a person fails to file a report required by this subchapter or fails to file a complete report, the comptroller may suspend or cancel one or more permits issued to the person under Section 151.203.

Added by Acts 2011, 82nd Leg., R.S., Ch. 145 (H.B. 11), Sec. 3, eff. September 1, 2011.

Sec. 151.468. CIVIL PENALTY; CRIMINAL PENALTY. (a) If a person fails to file a report required by this subchapter or fails to file a complete report, the comptroller may impose a civil or criminal penalty, or both, under Section 151.703(d) or 151.709.

(b) In addition to the penalties imposed under Subsection (a), a brewer, brewpub, wholesaler, distributor, or package store local distributor shall pay the state a civil penalty of not less than $25 or more than $2,000 for each day a violation continues if the brewer, brewpub, wholesaler, distributor, or package store local distributor:

(1) violates this subchapter; or

(2) violates a rule adopted to administer or enforce this subchapter.

Added by Acts 2011, 82nd Leg., R.S., Ch. 145 (H.B. 11), Sec. 3, eff. September 1, 2011.

Amended by:

Acts 2011, 82nd Leg., 1st C.S., Ch. 4 (S.B. 1), Sec. 14.02, eff. October 1, 2011.

Acts 2019, 86th Leg., R.S., Ch. 1332 (H.B. 4542), Sec. 6, eff. September 1, 2019.

Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 401, eff. September 1, 2021.

Sec. 151.469. ACTION BY TEXAS ALCOHOLIC BEVERAGE COMMISSION. If a person fails to file a report required by this subchapter or fails to file a complete report, the comptroller may notify the Texas Alcoholic Beverage Commission of the failure and the commission may take administrative action against the person for the failure under the Alcoholic Beverage Code.

Added by Acts 2011, 82nd Leg., R.S., Ch. 145 (H.B. 11), Sec. 3, eff. September 1, 2011.

Sec. 151.470. AUDIT; INSPECTION. The comptroller may audit, inspect, or otherwise verify a brewer’s, brewpub’s, wholesaler’s, distributor’s, or package store local distributor’s compliance with this subchapter.

Added by Acts 2011, 82nd Leg., R.S., Ch. 145 (H.B. 11), Sec. 3, eff. September 1, 2011.

Amended by:

Acts 2019, 86th Leg., R.S., Ch. 1332 (H.B. 4542), Sec. 7, eff. September 1, 2019.

Acts 2019, 86th Leg., R.S., Ch. 1359 (H.B. 1545), Sec. 402, eff. September 1, 2021.

Sec. 151.471. ACTION BY ATTORNEY GENERAL; VENUE; ATTORNEY’S FEES. (a) The comptroller may bring an action to enforce this subchapter and obtain any civil remedy authorized by this subchapter or any other law for the violation of this subchapter. The attorney general shall prosecute the action on the comptroller’s behalf.

(b) Venue for and jurisdiction of an action under this section is exclusively conferred on the district courts in Travis County.

(c) If the comptroller prevails in an action under this section, the comptroller and attorney general are entitled to recover court costs and reasonable attorney’s fees incurred in bringing the action.

Added by Acts 2011, 82nd Leg., R.S., Ch. 145 (H.B. 11), Sec. 3, eff. September 1, 2011.

SUBCHAPTER I-2. REPORTS BY MANUFACTURERS AND DISTRIBUTORS OF CERTAIN OFF-HIGHWAY VEHICLES PURCHASED OUTSIDE THIS STATE

Sec. 151.481. DEFINITIONS. In this subchapter:

(1) “Distributor” means a person that distributes off-highway vehicles and is required to hold a distributor’s license under Chapter 2301, Occupations Code.

(1-a) “Manufacturer” means a person that manufactures off-highway vehicles and is required to hold a manufacturer’s license under Chapter 2301, Occupations Code.

(2) “New off-highway vehicle” means an off-highway vehicle that has not been the subject of a retail sale.

(3) “Off-highway vehicle” has the meaning assigned by Section 501.0301, Transportation Code.

Added by Acts 2019, 86th Leg., R.S., Ch. 371 (H.B. 1543), Sec. 1, eff. September 1, 2019.

Amended by:

Acts 2021, 87th Leg., R.S., Ch. 297 (S.B. 586), Sec. 2, eff. September 1, 2021.

Sec. 151.482. REPORTS BY MANUFACTURERS AND DISTRIBUTORS. (a) The comptroller shall require each manufacturer and distributor to file with the comptroller a report not later than March 1 of each year listing each warranty issued by the manufacturer or distributor for a new off-highway vehicle that was, during the preceding calendar year, sold to a resident of this state by a retailer located outside this state. The report must:

(1) be in a form prescribed by the comptroller; and

(2) contain, at a minimum, the following information for each warranty:

(A) the vehicle identification number of the vehicle;

(B) the make, model, and model year of the vehicle; and

(b) As soon as practicable after receiving a report submitted under this section, the comptroller shall use the information in the report to investigate and collect any unpaid use taxes imposed under Subchapter D on an off-highway vehicle described in the report.

Added by Acts 2019, 86th Leg., R.S., Ch. 371 (H.B. 1543), Sec. 1, eff. September 1, 2019.

Amended by:

Acts 2021, 87th Leg., R.S., Ch. 297 (S.B. 586), Sec. 3, eff. September 1, 2021.

Acts 2021, 87th Leg., R.S., Ch. 297 (S.B. 586), Sec. 4, eff. September 1, 2021.

Sec. 151.483. RULES. The comptroller may adopt rules as necessary to implement this subchapter.

Added by Acts 2019, 86th Leg., R.S., Ch. 371 (H.B. 1543), Sec. 1, eff. September 1, 2019.

Sec. 151.484. CONFIDENTIALITY. Except as provided by Section 111.006, information contained in a report required to be filed by this subchapter is confidential and not subject to disclosure under Chapter 552, Government Code.

Added by Acts 2019, 86th Leg., R.S., Ch. 371 (H.B. 1543), Sec. 1, eff. September 1, 2019.

Sec. 151.485. CIVIL PENALTY. (a) If a manufacturer or distributor fails to file a report required by this subchapter or fails to file a complete report, the comptroller may impose a civil penalty under Section 151.703(d).

(b) In addition to the penalty imposed under Subsection (a), a manufacturer or distributor shall pay the state a civil penalty of not less than $25 or more than $2,000 for each day a violation continues if the manufacturer or distributor:

(1) violates this subchapter; or

(2) violates a rule adopted to administer or enforce this subchapter.

Added by Acts 2019, 86th Leg., R.S., Ch. 371 (H.B. 1543), Sec. 1, eff. September 1, 2019.

Amended by:

Acts 2021, 87th Leg., R.S., Ch. 297 (S.B. 586), Sec. 5, eff. September 1, 2021.

Sec. 151.486. ACTION BY TEXAS DEPARTMENT OF MOTOR VEHICLES. If a manufacturer or distributor fails to file a report required by this subchapter or fails to file a complete report, the comptroller may notify the Texas Department of Motor Vehicles of the failure and the department may take administrative action against the manufacturer or distributor for the failure under Chapter 2301, Occupations Code.

Added by Acts 2019, 86th Leg., R.S., Ch. 371 (H.B. 1543), Sec. 1, eff. September 1, 2019.

Amended by:

Acts 2021, 87th Leg., R.S., Ch. 297 (S.B. 586), Sec. 6, eff. September 1, 2021.

Sec. 151.487. AUDIT; INSPECTION. The comptroller may audit, inspect, or otherwise verify a manufacturer’s or distributor’s compliance with this subchapter.

Added by Acts 2019, 86th Leg., R.S., Ch. 371 (H.B. 1543), Sec. 1, eff. September 1, 2019.

Amended by:

Acts 2021, 87th Leg., R.S., Ch. 297 (S.B. 586), Sec. 7, eff. September 1, 2021.

Sec. 151.488. ACTION BY ATTORNEY GENERAL; VENUE; ATTORNEY’S FEES. (a) The comptroller may bring an action to enforce this subchapter and obtain any civil remedy authorized by this subchapter or any other law for the violation of this subchapter. The attorney general shall prosecute the action on the comptroller’s behalf.

(b) Venue for and jurisdiction of an action under this section is exclusively conferred on the district courts in Travis County.

Added by Acts 2019, 86th Leg., R.S., Ch. 371 (H.B. 1543), Sec. 1, eff. September 1, 2019.

SUBCHAPTER J. TAX DETERMINATIONS

Sec. 151.501. DETERMINATION AFTER THE FILING OF A REPORT. If a person has filed a tax report, the comptroller may issue a deficiency determination under Section 111.008 of this code.

Acts 1981, 67th Leg., p. 1576, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.503. DETERMINATION IF NO REPORT FILED. (a) If a person fails to file a report, the comptroller shall estimate the amount of receipts of the person subject to the sales tax, the amount of total sales prices of taxable items sold, leased, or rented by the person to another for storage, use, or consumption in this state, and the total sales prices of taxable items acquired by the person for storage, use, or consumption without the payment of the use tax to a retailer for each period or the total period for which the person failed to report as required by this chapter.

(b) The estimate required by Subsection (a) of this section may be made on any information available to the comptroller.

(c) On the basis of the estimate, the comptroller shall compute and determine the amount required to be paid to the state for each period.

(d) The comptroller shall add to the determination an amount equal to 10 percent of the amount computed under Subsection (c) of this section as a penalty.

(e) A determination under this section may be issued for one or more periods, and more than one determination may be issued for a single period.

Acts 1981, 67th Leg., p. 1576, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.504. DETERMINATION WHEN A BUSINESS IS DISCONTINUED. If a business is discontinued, the comptroller may make a determination of tax liability under this subchapter before the date a report or tax payment is due with respect to the discontinued business.

Acts 1981, 67th Leg., p. 1576, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.505. WHEN DETERMINATION BECOMES FINAL. A determination made under Section 151.501, 151.503, or 151.504 of this code becomes final on the expiration of 30 days after the day on which the determination was served by personal service or by mail, unless a petition for a redetermination is filed before the determination becomes final.

Acts 1981, 67th Leg., p. 1577, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.507. LIMITATIONS ON DETERMINATION. (a) A notice of a deficiency determination must be personally served or mailed within the period provided by Subchapter D, Chapter 111 of this code after the last day of the calendar month following the close of the regular reporting period of the taxpayer for which the amount is proposed to be determined or within the period provided by Subchapter D, Chapter 111 of this code after the report is filed, whichever period expires the later.

(b) The limitations provided by Subsection (a) of this section do not apply to a determination proposed to be made:

(1) for the collection of an amount of sales tax on the sale of a taxable item if a deficiency notice has been given or is given for the collection of the use tax on the same taxable item; or

(2) for the collection of the use tax on the storage, use, or consumption of a taxable item if a deficiency notice has been or is given for the collection of the sales tax on the same taxable item.

Acts 1981, 67th Leg., p. 1577, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1985, 69th Leg., ch. 37, Sec. 4, eff. Aug. 26, 1985.

Sec. 151.508. OFFSETS. In making a determination, the comptroller may offset an overpayment for one or more periods against an underpayment, penalty, and interest accrued on the underpayment for the same period or one or more other periods. Any interest accrued on the overpayment shall be included in the offset.

Acts 1981, 67th Leg., p. 1577, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.509. PETITION FOR REDETERMINATION. A person petitioning for a redetermination of a determination made under Section 111.022 must file, before the determination becomes final, security as the comptroller requires to ensure compliance with this chapter. The security may be sold by the comptroller in the manner provided by Subchapter A, Chapter 111.

Acts 1981, 67th Leg., p. 1577, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 42(a)(2), eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 21, eff. Oct. 1, 1995.

Sec. 151.510. HEARING ON REDETERMINATION. (a) If a petition for a redetermination is filed before the determination becomes final, the petitioner is entitled on a request stated in the petition to an oral hearing on the redetermination and to at least 20 days’ notice of the time and place of the hearing.

(b) The comptroller may continue the hearing from time to time as is necessary.

Acts 1981, 67th Leg., p. 1578, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.511. REDETERMINATION. (a) The comptroller may decrease the amount of a determination at any time before the determination becomes final.

(b) The comptroller may increase the amount of a determination that is not final if the additional claim is asserted by the comptroller at or before a hearing on a redetermination.

(c) If an additional claim is asserted, the petitioner is entitled to a 30-day continuance of the hearing to permit the petitioner to obtain and present evidence applicable to the items on which the additional claim is based.

(d) Repealed by Acts 1991, 72nd Leg., ch. 705, Sec. 42(a)(3), eff. Sept. 1, 1991.

Acts 1981, 67th Leg., p. 1578, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 42(a)(3), eff. Sept. 1, 1991.

Sec. 151.512. INTEREST. Unpaid taxes imposed by this chapter draw interest beginning 60 days after the date on which the tax or the amount of the tax required to be collected became due and payable to the state.

Acts 1981, 67th Leg., p. 1578, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.514. NOTICES. The comptroller shall give notice of a determination made under this subchapter promptly as provided by Sections 111.008(b) and (c) of this code. Any other notice required by this subchapter shall be given in the same manner. Notices under this subchapter are effective as provided by Section 111.008(c) of this code.

Acts 1981, 67th Leg., p. 1578, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.515. PROCEEDINGS AGAINST CONSUMER. This chapter does not prohibit the comptroller from proceeding against a consumer for an amount of tax that the consumer should have paid but failed to pay.

Acts 1981, 67th Leg., p. 1578, ch. 389, Sec. 1, eff. Jan. 1, 1982.

SUBCHAPTER K. PROCEDURES FOR COLLECTION OF DELINQUENT TAXES

Sec. 151.601. SUIT. The comptroller may bring an action in a court of this state, another state, or the United States to collect an amount of the taxes imposed by this chapter that is due and unpaid, including penalties and interest. The action shall be prosecuted by the attorney general.

Acts 1981, 67th Leg., p. 1579, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.602. VENUE. A suit brought under this subchapter against a taxpayer in a court of this state may be filed and heard in the county where the person owing the tax resides or has a place of business or in Travis County.

Acts 1981, 67th Leg., p. 1579, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.603. EVIDENCE: COMPTROLLER’S CERTIFICATE. In an action brought under this subchapter a certificate of the comptroller showing the delinquency is prima facie evidence of the determination of the tax or the amount of the tax, of the amount of penalties and interest stated, of the delinquency of the amounts stated, and of the compliance of the comptroller with this chapter in computing and determining the amounts due.

Acts 1981, 67th Leg., p. 1579, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.604. FORM OF ACTION. A suit under this subchapter against any person for recovery of the tax is in the form of an action for debt.

Acts 1981, 67th Leg., p. 1579, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.605. WRITS OF ATTACHMENT. In a suit under this subchapter, no bond or affidavit is required before the issuance of a writ of attachment.

Acts 1981, 67th Leg., p. 1579, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.606. SERVICE OF PROCESS. In a suit under this subchapter, a seller or retailer may be served with process as provided by the rules of civil procedure or by service on an agent or clerk in this state employed by the retailer or seller in a place of business in this state maintained by the seller or retailer. If process is served on the agent or clerk of the retailer or seller, a copy of the process shall forthwith be sent by registered mail to the retailer or seller at his principal or home office.

Acts 1981, 67th Leg., p. 1579, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.607. LIMITATION PERIOD. The limitation period provided by Section 111.202 of this code applies to a suit brought under this subchapter, except that the suit may be brought at any time within 3 years after a determination made under Subchapter J of this code becomes final or within 3 years after the last recording of a lien under this title.

Acts 1981, 67th Leg., p. 1579, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1983, 68th Leg., p. 1044, ch. 235, art. 7, Sec. 7, eff. Sept. 1, 1983.

Sec. 151.608. JUDGMENTS. (a) A judgment in favor of the state obtained in an action under this chapter may be filed for record with the county clerk of any county in the state and when filed constitutes a lien on all of the real property located in the county and belonging to the person named in the judgment as the defendant. The lien applies to all real property in the county owned by the defendant at the time of the filing or acquired by him after the filing of the judgment.

(b) The lien has the force and effect of a judgment lien for 10 years after the date of the judgment unless the lien is released or discharged before the expiration of the 10-year period.

(c) On the payment in full of the amount of a judgment obtained under this chapter, the comptroller may release the lien.

(d) A prior judgment is not a bar to a subsequent suit under this chapter for additional taxes, penalties, and interest accruing after the prior judgment if the suit is brought before the expiration of the limitation period.

(e) Execution on a judgment obtained under this chapter may issue in the same manner as an execution under other judgments, and the sale under an execution is held as provided by the rules of civil procedure and the statutes of this state.

Acts 1981, 67th Leg., p. 1579, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.614. RES JUDICATA. In the determination of a suit arising under this chapter, the rule of res judicata applies only if the liability at issue is for the same quarterly period as was at issue in a previously determined suit.

Acts 1981, 67th Leg., p. 1582, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.615. TAX SUIT COMITY. A court of this state shall recognize and enforce a liability for a sales or use tax lawfully imposed by another state if the other state extends a like comity to this state.

Acts 1981, 67th Leg., p. 1582, ch. 389, Sec. 1, eff. Jan. 1, 1982.

SUBCHAPTER L. PROHIBITED ACTS AND CIVIL AND CRIMINAL PENALTIES

Sec. 151.701. USE OF STAMPS OR TOKENS PROHIBITED. No person may use stamps or tokens for the purpose of collecting or enforcing the collection of the taxes imposed by this chapter or for any other purpose connected with the taxes.

Acts 1981, 67th Leg., p. 1582, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.703. FAILURE TO REPORT OR PAY TAX. (a) A person who fails to file a report as required by this chapter or who fails to pay a tax imposed by this chapter when due forfeits five percent of the amount due as a penalty, and if the person fails to file the report or pay the tax within 30 days after the day on which the tax or report is due, the person forfeits an additional five percent.

(b) The minimum penalty provided by Subsection (a) of this section is $1.

(d) In addition to any other penalty authorized by this section, a person who fails to file a report as required by this chapter shall pay a penalty of $50. The penalty provided by this subsection is assessed without regard to whether the taxpayer subsequently files the report or whether any taxes were due from the taxpayer for the reporting period under the required report.

Acts 1981, 67th Leg., p. 1583, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Amended by:

Acts 2011, 82nd Leg., 1st C.S., Ch. 4 (S.B. 1), Sec. 14.03, eff. October 1, 2011.

Sec. 151.7032. FAILURE TO PAY TAXES COLLECTED; CRIMINAL PENALTY AND AGGREGATION OF AMOUNTS INVOLVED. (a) A person commits an offense if the person intentionally or knowingly fails to pay to the comptroller, as required by this chapter, the tax collected by that person.

(b) An offense under this section is:

(1) a Class C misdemeanor if the amount of the tax collected and not paid is less than $50;

(2) a Class B misdemeanor if the amount of the tax collected and not paid is $50 or more but less than $500;

(3) a Class A misdemeanor if the amount of the tax collected and not paid is $500 or more but less than $1,500;

(4) a state jail felony if the amount of the tax collected and not paid is $1,500 or more but less than $20,000;

(5) a felony of the third degree if the amount of the tax collected and not paid is $20,000 or more but less than $100,000;

(6) a felony of the second degree if the amount of the tax collected and not paid is $100,000 or more but less than $200,000; and

(7) a felony of the first degree if the amount of the tax collected and not paid is $200,000 or more.

(c) When tax is collected and not paid in violation of Subsection (a) pursuant to one scheme or continuous course of conduct, the conduct may be considered as one offense and the amounts aggregated in determining the grade of the offense.

Added by Acts 2001, 77th Leg., ch. 442, Sec. 12, eff. Sept. 1, 2001.

Amended by:

Acts 2011, 82nd Leg., R.S., Ch. 68 (S.B. 934), Sec. 15, eff. September 1, 2011.

Acts 2011, 82nd Leg., R.S., Ch. 68 (S.B. 934), Sec. 16, eff. September 1, 2011.

Sec. 151.704. SALES TAX ABSORPTION; CRIMINAL PENALTY. (a) Except as provided by Subsections (b) and (c), a retailer commits an offense if the retailer directly or indirectly advertises, holds out, or states to a customer or to the public that the tax is not part of the sales price payable by the customer.

(b) A retailer may directly or indirectly advertise, hold out, or state to a customer or to the public that the retailer will pay the tax for the customer if:

(1) the retailer indicates in the advertisement, holding out, or statement that the retailer is paying the tax for the customer;

(2) the retailer does not indicate or imply in the advertisement, holding out, or statement that the sale is exempt or excluded from taxation; and

(3) any purchaser’s receipt or other statement given to the customer listing the sales price paid or to be paid by the customer separately states the amount of the tax and indicates that the tax will be paid by the retailer.

(c) This section does not prohibit a utility from billing a customer in one lump-sum price including the utility sales price and the amount of the tax imposed by this chapter.

(d) An offense under this section is a misdemeanor punishable by a fine of not more than $500.

Acts 1981, 67th Leg., p. 1583, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Amended by:

Acts 2019, 86th Leg., R.S., Ch. 1119 (H.B. 2358), Sec. 2, eff. October 1, 2019.

Sec. 151.705. COLLECTION OF USE TAX; CRIMINAL PENALTY. A retailer engaged in business in this state who violates Section 151.103 of this code commits a misdemeanor punishable by a fine of not more than $500.

Acts 1981, 67th Leg., p. 1583, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.707. RESALE OR EXEMPTION CERTIFICATE; CRIMINAL PENALTY. (a) A person commits an offense if the person:

(1) intentionally or knowingly makes a false entry in, or a fraudulent alteration of, an exemption or resale certificate;

(2) makes, presents, or uses an exemption certificate or resale certificate with knowledge that it is false and with the intent that it be accepted as a valid resale or exemption certificate; or

(3) intentionally conceals, removes, or impairs the verity or legibility of an exemption or resale certificate or unreasonably impedes the availability of an exemption or resale certificate.

(b) An offense under Subsection (a) is:

(1) a Class C misdemeanor if the tax avoided by the use of the exemption or resale certificate is less than $20;

(2) a Class B misdemeanor if the tax avoided by the use of the exemption or resale certificate is $20 or more, but less than $200;

(3) a Class A misdemeanor if the tax avoided by the use of the exemption or resale certificate is $200 or more, but less than $750;

(4) a felony of the third degree if the tax avoided by the use of the exemption or resale certificate is $750 or more, but less than $20,000; or

(5) a felony of the second degree if the tax avoided by the use of the exemption or resale certificate is $20,000 or more.

Acts 1981, 67th Leg., p. 1583, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1993, 73rd Leg., ch. 486, Sec. 1.09, eff. Sept. 1, 1993.

Amended by:

Acts 2011, 82nd Leg., R.S., Ch. 68 (S.B. 934), Sec. 17, eff. September 1, 2011.

Sec. 151.7075. FAILURE TO PRODUCE CERTAIN RECORDS AFTER USING RESALE CERTIFICATE; CRIMINAL PENALTY. (a) A person commits an offense if the person intentionally fails to produce to the comptroller records that document a taxpayer’s taxable sale of items that the taxpayer obtained using a resale certificate.

(b) The records to which Subsection (a) applies are records:

(1) required to be kept under Section 151.025; and

(2) requested by the comptroller under Section 151.023 that are not produced in the period required by that section.

(c) The items to which Subsection (a) applies are items the sales of which are required to be reported to the comptroller under Section 151.433, 154.212, or 155.105.

(d) An offense under this section is:

(1) a Class C misdemeanor if the tax avoided by the use of the resale certificate is less than $20;

(2) a Class B misdemeanor if the tax avoided by the use of the resale certificate is $20 or more but less than $200;

(3) a Class A misdemeanor if the tax avoided by the use of the resale certificate is $200 or more but less than $750;

(4) a felony of the third degree if the tax avoided by the use of the resale certificate is $750 or more but less than $20,000; or

(5) a felony of the second degree if the tax avoided by the use of the resale certificate is $20,000 or more.

(e) It is an affirmative defense to prosecution under this section that the items listed for purchase on the resale certificate had not been resold at the time of the comptroller’s request for records under Section 151.023.

(f) If conduct described by Subsection (a) is related to one scheme or continuous course of conduct, the conduct may be considered as one offense and the amounts of tax avoided may be aggregated in determining the grade of the offense.

Added by Acts 2011, 82nd Leg., R.S., Ch. 68 (S.B. 934), Sec. 18, eff. September 1, 2011.

Sec. 151.708. SELLING WITHOUT PERMIT; CRIMINAL PENALTY. (a) A person or officer of a corporation commits an offense if the person or corporation engages in business as a retailer in this state without a permit required by this chapter or after the permit is suspended.

(b) A first offense under this section is a Class C misdemeanor.

(c) If it is shown on the trial of an offense under this section that the person or officer has previously been finally convicted of one offense under this section, on conviction the person or officer shall be punished for a Class B misdemeanor punishable by a fine only, not to exceed $2,000.

(d) If it is shown on the trial of an offense under this section that the person or officer has previously been finally convicted of two offenses under this section, on conviction the person or officer shall be punished for a Class A misdemeanor punishable by a fine only, not to exceed $4,000.

(e) If it is shown on the trial of an offense under this section that the person or officer has previously been finally convicted of three or more offenses under this section, on conviction the person or officer shall be punished for a Class A misdemeanor punishable by a fine not to exceed $4,000, confinement in jail for a term not to exceed one year, or both the fine and confinement.

(f) Each day a person or an officer of a corporation operates a business without a permit or with a suspended permit is a separate offense under this section.

Acts 1981, 67th Leg., p. 1583, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 2001, 77th Leg., ch. 442, Sec. 13, eff. Sept. 1, 2001.

Sec. 151.709. FAILURE TO FURNISH REPORT; CRIMINAL PENALTY. (a) A person commits an offense if the person refuses to furnish a report as required by this chapter or by the comptroller as authorized by this chapter.

(b) A first offense under this section is a Class C misdemeanor.

(c) If it is shown on the trial of an offense under this section that the person has previously been finally convicted of one offense under this section, on conviction the person shall be punished for a Class B misdemeanor punishable by a fine only, not to exceed $2,000.

(d) If it is shown on the trial of an offense under this section that the person has previously been finally convicted of two or more offenses under this section, on conviction the person shall be punished for a Class A misdemeanor punishable by a fine only, not to exceed $4,000.

Acts 1981, 67th Leg., p. 1584, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 2001, 77th Leg., ch. 442, Sec. 14, eff. Sept. 1, 2001.

Sec. 151.7101. ELECTION OF OFFENSES. If a violation of a criminal provision of this chapter by a taxpayer constitutes another offense under the laws of this state, the state may elect the offense for which it will prosecute the taxpayer.

Added by Acts 2001, 77th Leg., ch. 442, Sec. 15, eff. Sept. 1, 2001.

Sec. 151.7102. FALSE ENTRY OR FAILURE TO ENTER IN RECORDS. (a) A person commits an offense if the person intentionally or knowingly conceals, destroys, makes a false entry in, or fails to make an entry in records that are required to be made or kept under this chapter.

(b) An offense under this section is a felony of the third degree.

Added by Acts 2001, 77th Leg., ch. 442, Sec. 15, eff. Sept. 1, 2001.

Sec. 151.7103. FAILURE TO PRODUCE FOR INSPECTION OR ALLOW INSPECTION OF RECORDS. (a) A person commits an offense if the person is asked, by a person authorized by the comptroller, to produce or allow inspection of a record required to be kept under this chapter and the person fails to produce the record or allow the inspection after the allowed time.

(b) An offense under this section is a Class C misdemeanor. Each day the person fails to allow inspection of records or produce records for inspection after receiving a request is a separate offense.

Added by Acts 2001, 77th Leg., ch. 442, Sec. 15, eff. Sept. 1, 2001.

Sec. 151.711. LIMITATIONS ON PROSECUTIONS. An indictment or information for a criminal offense brought under this chapter must be presented within four years after the commission of the offense or it is barred.

Acts 1981, 67th Leg., p. 1584, ch. 389, Sec. 1, eff. Jan. 1, 1982.

Sec. 151.712. CIVIL PENALTY FOR PERSONS CERTIFYING EXPORTS. (a) A person may not sign or certify proof of export documentation for the purpose of showing an exemption under Section 151.307(b)(2) unless:

(1) the person is:

(A) a customs broker licensed by the comptroller under Section 151.157; or

(B) an authorized employee of a customs broker licensed by the comptroller under Section 151.157; and

(2) the tangible personal property the export of which the person certifies is exported on the date and to the place shown on the export documentation signed by the person.

(b) A person who provides proof of documentation that tangible personal property has been exported outside of the United States or a person who may benefit from the provision of the proof of documentation, including a customs broker, authorized employee, authorized independent contractor, seller of the property or agent or employee of the seller, or a consumer of the property or agent or employee of the consumer, may not sell or buy the proof of documentation, including stamps required for the documentation. This subsection does not apply to a customs broker who accepts a fee for providing documentation under Section 151.307(b) if the customs broker provides the documentation in accordance with Section 151.157 and rules adopted by the comptroller.

(c) Except as provided by Subsection (e), a person who violates this section is subject to a monetary penalty that may not exceed:

(1) $500 for the first violation;

(2) $1,000 for the second violation; and

(3) $3,000 for each subsequent violation.

(d) Except as provided by Subsection (e), each violation of this section is subject to a separate monetary penalty.

(e) The aggregate of monetary penalties imposed under this section against any person for all violations that occur in a calendar year may not exceed $30,000.

(f) In addition to any monetary penalty under this section, the comptroller shall revoke under Section 151.157 the license of a customs broker who violates this section. A person whose license is revoked under this subsection may not apply for a new license under Section 151.157 before the first anniversary of the date on which the previous license was revoked.

(g) A proceeding to impose a civil penalty or suspend or revoke a license because of a violation of this section is a contested case under Chapter 2001, Government Code. Judicial review is by trial de novo. The district courts of Travis County have exclusive original jurisdiction of a suit under this section.

(h) The comptroller must give notice of the comptroller’s intent to impose a monetary or other penalty under this section not later than two years after the date of the alleged commission of a violation of this section or the comptroller may not impose a monetary or other penalty.

(i) In this section, “customs broker” and “authorized employee” have the meanings assigned by Section 151.157.

Added by Acts 1993, 73rd Leg., ch. 955, Sec. 4, eff. June 19, 1993. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(49), eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1000, Sec. 22, eff. Oct. 1, 1995; Acts 2003, 78th Leg., ch. 1001, Sec. 6, eff. Jan. 1, 2004.

Sec. 151.713. FURNISHING FALSE INFORMATION TO CUSTOMS BROKER; CIVIL PENALTY. (a) A person may not obtain or attempt to obtain export documentation for the purpose of showing an exemption under Section 151.307(b)(2) from a customs broker or an authorized employee of a customs broker if the person knows, at the time the documentation is sought, that the information provided to the broker or employee is materially false, in whole or in part, and the documentation is sought for the purpose of evading the tax imposed by this chapter.

(b) After notice as provided by this section, a person who violates this section is subject to a monetary penalty that may not exceed:

(1) $500 for the first violation;

(2) $1,000 for the second violation; and

(3) $3,000 for each subsequent violation.

(d) If the comptroller believes that a person has violated this section, the comptroller shall give written notice to the person to show cause why the person should not be subject to a monetary penalty for the violation. The notice must advise the person of the allegations and explain that the person has a right to respond to the allegations in writing and request an oral hearing before the 31st day after the date that the notice is issued.

(e) The comptroller may not impose a monetary penalty under this section until the comptroller or a person designated by the comptroller:

(1) considers the allegations against the person;

(2) considers any timely written response made by the person;

(3) considers any evidence properly admitted at any oral hearing held on the allegations; and

(4) issues a written decision.

(f) The comptroller must give notice of the comptroller’s intent to impose a monetary penalty under this section not later than four years after the date of the alleged commission of a violation of this section or the comptroller may not impose a monetary penalty.

(g) The penalty imposed by this section is in addition to any tax, penalty, and interest that may be assessed against a person who violates this section.

(h) In this section, “customs broker” and “authorized employee” have the meanings assigned by Section 151.157.

Added by Acts 1993, 73rd Leg., ch. 955, Sec. 4, eff. June 19, 1993.

Sec. 151.714. VENUE FOR CRIMINAL PROSECUTION. Venue for prosecution for an offense under this chapter is in:

(1) the county in which any element of the offense occurs; or

(2) Travis County.

Added by Acts 2001, 77th Leg., ch. 442, Sec. 16, eff. Sept. 1, 2001.

SUBCHAPTER M. DISPOSITION OF PROCEEDS

Sec. 151.801. DISPOSITION OF PROCEEDS. (a) Except for amounts otherwise allocated under this section, all proceeds from the collection of the taxes imposed by this chapter shall be deposited to the credit of the general revenue fund.

(b) The amount of the proceeds from the collection of the taxes imposed by this chapter on the sale, storage, or use of lubricating and motor oils used to propel motor vehicles over the public roadways shall be deposited to the credit of the state highway fund.

(c) The proceeds from the collection of the taxes imposed by this chapter on the sale, storage, or use of sporting goods shall be deposited as follows:

(1) an amount equal to 93 percent of the proceeds shall be credited to the Parks and Wildlife Department for the purposes described by Subsection (c-1) and deposited to department accounts as provided by that subsection; and

(2) an amount equal to seven percent of the proceeds shall be credited to the Texas Historical Commission and deposited to the credit of the historic site account under Section 442.073, Government Code.

(c-1) The legislature shall allocate the money credited to the Parks and Wildlife Department under Subsection (c) to department accounts specified in the Parks and Wildlife Code in specific amounts provided in the General Appropriations Act, and those amounts may be used only for the following purposes:

(1) to acquire, operate, maintain, and make capital improvements to parks;

(2) for a purpose authorized under Chapter 24, Parks and Wildlife Code;

(3) to pay debt service on park-related bonds;

(4) to fund the state contributions for benefits and benefit-related costs attributable to the salaries and wages of department employees paid from sporting goods sales tax receipts; and

(5) to fund the portion of the state contributions for annuitant group coverages under the group benefits program operated by the Employees Retirement System of Texas under Chapter 1551, Insurance Code, attributable to sporting goods sales tax receipts.

(c-2) An amount equal to the revenue derived from the collection of taxes at the rate of two percent on each sale at retail of fireworks shall be deposited to the credit of the rural volunteer fire department insurance fund established under Section 614.075, Government Code.

(c-3) Subject to the limitation imposed under Section 2028.2041, Occupations Code, an amount equal to the proceeds from the collection of the taxes imposed by this chapter on the sale, storage, or use of horse feed, horse supplements, horse tack, horse bedding and grooming supplies, and other taxable expenditures directly related to horse ownership, riding, or boarding shall be deposited to the credit of the escrow account administered by the Texas Racing Commission and established under Section 2028.204, Occupations Code.

(d) The comptroller shall determine the amount to be deposited to the highway fund under Subsection (b) according to available statistical data indicating the estimated average or actual consumption or sales of lubricants used to propel motor vehicles over the public roadways. The comptroller shall determine the amounts to be deposited to the accounts under Subsection (c) according to available statistical data indicating the estimated or actual total receipts in this state from taxable sales of sporting goods, and according to the specific amounts provided in the General Appropriations Act in accordance with Subsection (c-1). The comptroller shall determine the amount to be deposited to the fund under Subsection (c-2) according to available statistical data indicating the estimated or actual total receipts in this state from taxes imposed on sales at retail of fireworks. The comptroller shall determine the amount to be deposited to the account under Subsection (c-3) according to available statistical data indicating the estimated or actual total receipts in this state from taxable sales of horse feed, horse supplements, horse tack, horse bedding and grooming supplies, and other taxable expenditures directly related to horse ownership, riding, or boarding. If satisfactory data are not available, the comptroller may require taxpayers who make taxable sales or uses of those lubricants, of sporting goods, of fireworks, or of horse feed, horse supplements, horse tack, horse bedding and grooming supplies, or other taxable expenditures directly related to horse ownership, riding, or boarding to report to the comptroller as necessary to make the allocation required by Subsection (b), (c), (c-2), or (c-3).

(e) In this section:

(1) “Motor vehicle” means a trailer, a semitrailer, or a self-propelled vehicle in or by which a person or property can be transported upon a public highway. “Motor vehicle” does not include a device moved only by human power or used exclusively on stationary rails or tracks, a farm machine, a farm trailer, a road-building machine, or a self-propelled vehicle used exclusively to move farm machinery, farm trailers, or road-building machinery.

(2) “Sporting goods” means an item of tangible personal property designed and sold for use in a sport or sporting activity, excluding apparel and footwear except that which is suitable only for use in a sport or sporting activity, and excluding board games, electronic games and similar devices, aircraft and powered vehicles, and replacement parts and accessories for any excluded item.

(3) “Fireworks” means any composition or device that is designed to produce a visible or audible effect by combustion, explosion, deflagration, or detonation that is classified as Division 1.4G explosives by the United States Department of Transportation in 49 C.F.R. Part 173 as of September 1, 1999. The term does not include:

(A) a toy pistol, toy cane, toy gun, or other device that uses a paper or plastic cap;

(B) a model rocket or model rocket motor designed, sold, and used for the purpose of propelling a recoverable aero model;

(D) a novelty or trick noisemaker;

(E) a pyrotechnic signaling device or distress signal for marine, aviation, or highway use in an emergency situation;

(F) a fusee or railway torpedo for use by a railroad;

(G) a blank cartridge for use in a radio, television, film, or theater production, for signal or ceremonial purposes in athletic events, or for industrial purposes; or

(H) a pyrotechnic device for use by a military organization.

(4) “Horse feed” means a product clearly packaged and labeled as feed for a horse.

(5) “Horse supplement” means a product clearly packaged and labeled as a supplement for a horse, including a vitamin, mineral, or other nutrient intended to supplement horse feed.

(f) The comptroller shall deposit each fiscal year $100,000 of the revenue received under this chapter to the credit of the Texas music incubator account under Section 485.046, Government Code.

(g) Not later than the 30th day of each state fiscal biennium, the comptroller shall deposit to the credit of the Texas moving image industry incentive fund established under Section 485.0225, Government Code, $300 million of the proceeds from the collection of the taxes imposed by this chapter.

Acts 1981, 67th Leg., p. 1584, ch. 389, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1993, 73rd Leg., ch. 679, Sec. 65, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1423, Sec. 19.14, eff. Sept. 1, 1997.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1159 (H.B. 12), Sec. 45, eff. June 15, 2007.

Acts 2013, 83rd Leg., R.S., Ch. 835 (H.B. 7), Sec. 14, eff. June 14, 2013.

Acts 2015, 84th Leg., R.S., Ch. 82 (S.B. 1366), Sec. 5, eff. September 1, 2015.

Acts 2015, 84th Leg., R.S., Ch. 82 (S.B. 1366), Sec. 6, eff. September 1, 2015.

Acts 2015, 84th Leg., R.S., Ch. 145 (H.B. 158), Sec. 1, eff. September 1, 2015.

Acts 2015, 84th Leg., R.S., Ch. 471 (S.B. 761), Sec. 1, eff. September 1, 2015.

Acts 2015, 84th Leg., R.S., Ch. 471 (S.B. 761), Sec. 2, eff. September 1, 2015.

Acts 2019, 86th Leg., R.S., Ch. 178 (H.B. 1422), Sec. 11, eff. September 1, 2019.

Acts 2019, 86th Leg., R.S., Ch. 503 (S.B. 26), Sec. 7, eff. September 1, 2021.

Acts 2019, 86th Leg., R.S., Ch. 503 (S.B. 26), Sec. 8, eff. September 1, 2021.

Acts 2019, 86th Leg., R.S., Ch. 503 (S.B. 26), Sec. 9, eff. September 1, 2021.

Acts 2019, 86th Leg., R.S., Ch. 1365 (H.B. 2463), Sec. 7, eff. September 1, 2019.

Acts 2019, 86th Leg., R.S., Ch. 1365 (H.B. 2463), Sec. 8, eff. September 1, 2019.

Acts 2021, 87th Leg., R.S., Ch. 84 (S.B. 609), Sec. 2, eff. September 1, 2021.

Acts 2025, 89th Leg., R.S., Ch. 1187 (S.B. 22), Sec. 2.07, eff. September 1, 2025.

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