Texas Legislature to Study Local Sales Tax Sourcing Change by Kyle Kasner
Published: Fri, 03/25/22
Evaluate the impact of shifting to destination sourcing for local sales and use tax
purposes, including the benefits of reduced taxpayer confusion. Monitor
the implementation of the Comptroller's amendments to 34 Tx. Admin. Code
§3.334, relating to local sales and use taxes, and the Comptroller's Sales Tax Rate
Locator. Make recommendations for legislation to improve Texas' local sales and
use tax sourcing.
purposes, including the benefits of reduced taxpayer confusion. Monitor
the implementation of the Comptroller's amendments to 34 Tx. Admin. Code
§3.334, relating to local sales and use taxes, and the Comptroller's Sales Tax Rate
Locator. Make recommendations for legislation to improve Texas' local sales and
use tax sourcing.
The Hearing Notice can be viewed at: https://capitol.texas.gov/tlodocs/87R/schedules/html/C4902022042110001.HTM
Links to procedures for electronic submission of comments as well as to the future live video feed are included in the Hearing Notice.
Last Legislative session/most recent House Ways & Means Committee Report addressing local sales tax sourcing can be found beginning on Page 61 at: https://house.texas.gov/_media/pdf/committees/reports/86interim/Ways-Means-Committee-Interim-Report-2020.pdf
Please note that links to all filed written testimony/comments filed in the past Committee Report are provided within the footnotes.
We encourage all to participate in this meeting as any shift from origination local sales tax sourcing to destination-based sourcing considering that 20%+ of Texans/Texas businesses are located outside taxing Cities will result in less overall local sales taxes being collected and distributed to Texas local jurisdictions. However, since destination is a “redistribution” of local sales taxes between taxing cities, “winners and losers” between Cities will likely exist.
We plan to evaluate a state-wide sourcing changes using 2021 local tax collections and will provide notice when such report(s) are available at our website: www.cityservices.us, under Resources.
Please call/e-mail me with questions.
Kyle Kasner
972-814-6574