Texas Register, Volume 42, Number 43, Pages 5913-6056, October 27, 2017 Page: 6,029
This periodical is part of the collection entitled: Texas Register and was provided to The Portal to Texas History by the UNT Libraries Government Documents Department.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
physical possession of the tangible personal property and directly con-
sumes the tangible personal property during the provision of the taxable
service. Property is considered consumed if it can no longer be used for
its intended purpose in the normal course of business or is not retained
or reusable by the service provider.
(C) A purchaser may have primary possession of a com-
puter program if the purchaser acquires a license to use the computer
program from the service provider and the service provider does not
retain the right to use the computer program under that license.
(7) A person performing services taxable under Tax Code,
Chapter 151 is the consumer of machinery and equipment used by the
person in performing the services. A person performing a taxable ser-
vice is not using the machinery or equipment in performing the service
if the person has transferred primary possession, as that term is de-
scribed in paragraph (6) of this subsection, of the machinery or equip-
ment to the purchaser of the service.
(8) Aircraft. See 3.280 of this title (relating to Aircraft)
for the definition of "sale for resale" as it applies to aircraft.
(c) Issuance and acceptance of resale certificates.
(1) A sale for resale as defined in subsection (b) of this sec-
tion is not taxable.
(2) Who may issue a resale certificate.
(A) In general, a purchaser who holds a Texas sales and
use tax permit may issue a resale certificate instead of paying tax at
the time of purchase of a taxable item that the purchaser intends to
resell, lease, rent, or transfer as an integral part of a taxable service
in the normal course of business. A purchaser may also issue a resale
certificate instead of paying tax at the time of purchase of a taxable item
that the purchaser intends to maintain in a valid tax-free inventory, if
the purchaser does not know at the time of purchase whether the item
will be resold or used in the performance of a service. The purchaser
must collect, report, and remit tax to the comptroller as required by
3.286 of this title when the purchaser sells, leases, or rents taxable
items.
(B) A purchaser may not issue a resale certificate in lieu
of paying tax on the purchase of a taxable item, including tangible per-
sonal property to maintain in a valid tax-free inventory, that the pur-
chaser knows, at the time of purchase, will be used or consumed by the
purchaser.
(3) Accepting a resale certificate.
(A) All gross receipts of a seller are presumed subject
to sales or use tax unless a properly completed resale or exemption cer-
tificate is accepted by the seller. A properly completed resale certificate
contains the information required by subsection (g) of this section. See
also 3.287 of this title (relating to Exemption Certificates).
(B) A seller does not owe tax on a sale, lease, or rental
of a taxable item if the seller accepts a properly completed resale cer-
tificate in good faith. A resale certificate is deemed to be accepted in
good faith if:
(i) the resale certificate is accepted at or before the
time of the transaction;
(ii) the resale certificate is properly completed,
meaning that all of the information required by subsection (g) of this
section is legible; and
(iii) the seller does not know, and does not have rea-
son to know, that the sale is not a sale for resale. It is the seller's re-
sponsibility to be familiar with Texas sales tax law as it applies to theseller's business and to take notice of the information provided by the
purchaser on the resale certificate. For example, a jewelry seller should
know that a resale certificate from a landscaping service is invalid be-
cause a landscaping service is not in the business of reselling jewelry.
(C) The seller should obtain a properly executed resale
certificate at the time the taxable transaction occurs. All certificates ob-
tained on or after the date the comptroller's auditor actually begins work
on the audit at the seller's place of business or on the seller's records af-
ter the entrance conference are subject to verification. All incomplete
certificates will be disallowed regardless of when they were obtained.
The seller has 60 days from the date written notice is received by the
seller from the comptroller in which to deliver the certificates to the
comptroller. Written notice shall be given by the comptroller upon the
filing of a petition for redetermination or claim for refund. For the
purposes of this section, written notice given by mail is presumed to
have been received by the seller within three business days from the
date of deposit in the custody of the United States Postal Service. The
seller may overcome the presumption by submitting proof from the
United States Postal Service or by other competent evidence showing
a later delivery date. Any certificates delivered to the comptroller dur-
ing the 60-day period will be subject to independent verification by the
comptroller before any deductions will be allowed. Certificates deliv-
ered after the 60-day period will not be accepted and the deduction will
not be granted. See 3.282 of this title (relating to Auditing Taxpayer
Records) and 3.286 of this title.
(D) Resale certificates are subject to the provisions of
3.281 of this title (relating to Records Required; Information Re-
quired). A seller is required to keep resale certificates for a minimum
of four years from the date on which the sale is made and throughout
any period in which any tax, penalty, or interest may be assessed, col-
lected, or refunded by the comptroller or in which an administrative
hearing or judicial proceeding is pending.
(4) Blanket resale certificate. A purchaser may issue to a
seller a blanket resale certificate describing the general nature of the
taxable items purchased for resale. The seller may rely on the blanket
certificate until it is revoked in writing.
(5) Bulk commodities. A resale certificate is not required
to be issued by a broker or dealer that buys and sells only raw commodi-
ties in bulk, such as natural gas, raw cotton bales, or raw aluminum,
from producers or other commodity brokers or dealers solely for resale
in the normal course of business. However, if requested by the seller, a
properly completed resale certificate, absent a sales tax permit number,
may be issued by the purchaser of such raw commodities even if the
purchaser does not hold a sales and use tax permit.
(d) Retailers outside Texas.
(1) A seller in Texas may accept a resale certificate in lieu
of tax from a retailer located outside Texas who purchases taxable items
for resale in the United States or Mexico in a transaction that is a sale
for resale, as defined in subsection (b) of this section.
(2) The resale certificate must show the signature and ad-
dress of the purchaser, the date of the sale, the state in which the pur-
chaser intends to resell the item, the sales tax permit number or the
registration number assigned to the purchaser by the state in which the
purchaser is authorized to do business or a statement that the purchaser
is not required to be permitted in the state in which the purchaser is au-
thorized to do business. Mexican retailers who purchase taxable items
for resale must show their Federal Taxpayers Registry (RFC) identi-
fication number for Mexico on the resale certificate and give a copy
of their Mexican Registration Form to the Texas seller. An invoice
describing the taxable item purchased and showing the exact street ad-
dress or office address from which the taxable item will be resold mustADOPTED RULES October 27, 2017 42 TexReg 6029
Upcoming Pages
Here’s what’s next.
Search Inside
This issue can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Periodical.
Texas. Secretary of State. Texas Register, Volume 42, Number 43, Pages 5913-6056, October 27, 2017, periodical, October 27, 2017; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth897027/m1/117/?q=%22%22~1: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.