Texas- Outbreak Leads Texas to Hold off on Revamping Internet Sales Tax Policies

Round Rock and a relatively small number of other cities across Texas that fear losing millions of dollars annually because of a proposed policy change on how the state collects sales taxes on internet purchases have won a temporary reprieve — thanks to the coronavirus.

The state comptroller’s office says it has delayed portions of the new policy until October 2021, determining that the midst of a global pandemic isn’t a good time to make a change that could have major negative implications for the finances of some municipalities.

Earlier this year, Round Rock officials contended that the plan, without alterations, would cost their city a minimum of $30 million annually in lost sales tax revenue and “devastate the financial stability” of Round Rock. San Marcos officials likewise have said they’ll be facing deep budget cuts or steep increases in property taxes as a result of the proposed change.

The new policy advanced by Texas Comptroller Glenn Hegar could throw a wrench into such arrangements by shifting the collection of most sales taxes for online purchases either to the locations where orders are physically fulfilled in the state or to where the merchandise is delivered.

With e-commerce accounting for an increasingly large percentage of sales overall, Hegar has described his goal as simple fairness, saying sales taxes paid by residents of a particular jurisdiction in Texas should go to benefit that jurisdiction.

For more information: Statesman

by bob sechler
june 05, 2020