Texas Enacts Legislation for an Optional Local Use Tax Rate for Remote Sellers

Katherine Mullen
May 22, 2019

[May 22, 2019] The state of Texas recently approved a new law giving remote sellers who are required to collect and remit local use taxes in Texas an option to collect the amount as a single local use tax rate as an alternative to combined local use tax rates. Under the law, a remote seller can still collect and remit sales tax for the combined rate of all applicable local use taxes for a given transaction. If a remote seller chooses to use the single local use tax rate, the remote seller must notify the Texas Comptroller of Public Accounts before collecting the single rate. The single use tax rate will be updated each calendar year and will be equal to the average estimate rate of local sales and use taxes in Texas during the preceding fiscal year. The single local use tax rate for the upcoming calendar year will be announced at the end of each fiscal year. This law will go into effect on October 1, 2019. For the period between October 1, 2019 and December 31, 2019, the single use tax rate will be 1.75%. 

A copy of the text of the bill can be found here

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Katherine Mullen

Katherine Mullen is a Regulatory Counsel at Sovos. Within Sovos’ Regulatory Analysis function, Katherine researches U.S. transaction tax. Katherine holds a B.A. in English Literature from McGill University, an M.S. in Library Science from Simmons College and a J.D. from Suffolk University School of Law. Katherine is a member of the Massachusetts Bar.
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