Texas – Amended Criminal Offenses and Penalties Rule

SALT Report 3008 – The Texas Comptroller has amended the sales and use tax rule regarding criminal offenses and penalties to include provisions regarding resale and exemption certificates. The updated rule provides that the following activities are considered criminal offenses:

  • Intentionally concealing, removing, or falsifying the information on an exemption or resale certificate, or unreasonably delaying the availability of an exemption or resale certificate
  • Collecting tax but intentionally failing to pay the tax to the Comptroller and the nonpayment is “pursuant to one scheme or continuous course of conduct”
  • Intentionally failing to provide the Comptroller with tax records regarding sales of alcohol, cigarettes, and tobacco that were purchased using a resale certificate
  • Directly or indirectly advertising to the public that the seller will assume, absorb, or refund any portion of the sales tax, or that the seller will not add sales tax to the price of a taxable item. This is a misdemeanor punishable by a fine of up to $500 for each occurrence.

If a person is found guilty of any of the above, they will be charged with one of the following:

  • Class C misdemeanor – If the tax avoided by the use of an exemption or resale certificate is less than $20; or the amount of the tax collected and not paid is less than $50
  • Class B misdemeanor – If the tax avoided by the use of an exemption or resale certificate is $20 or more but less than $200; or the tax collected and not paid is $50 or more but less than $500
  • Class A misdemeanor – If the tax avoided by the use of an exemption or resale certificate is $200 or more but less than $750; or the tax collected and not paid is $500 or more but less than $1,500
  • Third-degree felony – If the tax avoided by the use of an exemption or resale certificate is $750 or more but less than $20,000; or the amount of the tax collected and not paid is $20,000 or more but less than $100,000
  • Second-degree felony – If the tax avoided by the use of an exemption or resale certificate is $20,000 or more; or the tax collected and not paid is $100,000 or more but less than $200,000; and
  • First-degree felony if the amount of the tax collected and not paid is $200,000 or more

If a person is found guilty of any of the above activities, the person will be charged with one offense that is the aggregate of all offenses; and the amount of tax collected and not paid will be the total aggregate amount of each offense.  The aggregate amount will be used to determine the grade of the offense and the penalties that will be imposed.

The amended rule also added provisions regarding confidential information, criminal conspiracy, organized crime, money laundering, and concealing or destroying records.

This rule was submitted for filing with the Secretary of State on June 7, 2013 and went into effect on September 23, 2013.

For Further Information

Texas Comptroller of Public Accounts – Rule 34 TAC §3.305

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