84(R) - 2015
House Ways & Means
House Ways & Means
Relating to the duty of the comptroller to report sales and use tax information to certain taxing entities.
A fiscal note dated April 15, 2015 anticipates a negative two-year net impact to General Revenue Related Funds from CSHB 1871 of $16,610,000 through the biennium ending August 31, 2017.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
There could be an indeterminate amount of sales and use tax reallocations between local taxing jurisdictions.
House Bill 1871 would amend Section 321.302 of the Tax Code related to the comptroller's reporting duties regarding municipal sales and use taxes.
It would require that, in the case a municipality requests an additional report, this report include the amount of tax received in addition to the amount of tax due to the municipality for each person who has failed to pay the full amount of tax due under Chapter 321 or Chapter 151. It would also require that the report show whether or not the taxpayer is delinquent in the payment of sales and use taxes due to the municipality, in addition to already showing the information regarding possible delinquency to the state. The additional report would have to include the steps taken by the comptroller to allocate (in addition to steps take to
collect) the delinquent taxes due to the municipality.
If the municipality determined that a person doing business in the municipality had not fully collected or reported taxes due to the municipality under Chapter 321 on municipal sales and use tax, the person could be part of a report addressed to the comptroller (as opposed to a business that is not included in a comptroller's report, currently). House Bill 1871 would extend the number of days for the comptroller to respond to a municipality's report from 90 days to 120 days.
The comptroller's response would have to include the action taken to collect and allocate the delinquent tax from a person obligated for the municipal tax when the tax is delinquent, and the date and periods covered by the most recent audit of the person, or if the comptroller has not conducted an audit of the person. The certification that the person is obligated would have to state the periods, the amount of tax due, and whether the tax due has been credited to the municipality's account.
House Bill 1871 would allow the comptroller to set and collect reasonable fees from municipalities or other local governmental entities to cover the expense of compiling and providing the information.
House Bill 1871 allows that a municipality preserve the right to receive taxes due for the four years preceding the report by a municipality and for each subsequent period.
Vote Recommendation Notes
House Bill 1871 would increase information requirements from the comptroller's quarterly reports regarding municipal sales and use taxes. It would also allow municipalities to request additional reports from the comptroller, including regarding persons doing business in the municipality, the municipality believes, that have not fully collected or reported taxes due to the municipality under Chapter 321. The comptroller could set and collect reasonable fees from municipalities to cover the expenses of compiling and providing additional information.
By allowing municipalities to require more information from the Comptroller, House Bill 1871 would allow more transparency and accountability regarding how the municipal sales and use tax is collected, administered and credited. We support this bill.