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Texas Considering Updates to Destination-Based Internet Sales

by DMA Staff | Mar 27, 2020

Texas Comptroller Glenn Hegar has proposed a rule change that would require internet sales to be fully destination-based. Many companies enter into economic development arrangements with cities in order to source their internet sales to a designated location. Local communities have concerns that tax is not being paid to the proper jurisdiction, and the rule change would solve that. Currently, businesses are reporting tax at whatever location they have physical presence and are reporting all sales through that office. The proposed rule update would change the definition of place of business to be one that is "a place a customer can visit or call to place an order”. The new definition would not include internet-based sales. 

This article is part of DMA's Completely Compliance quarterly newsletter. Stay up to date with sales and use tax news, events, and information by signing up for the newsletter here.