Texas Comptroller: Sales Tax Loophole.

An Opinion piece by Texas Comptroller points out this loophole in Texas Tax law:

“some cities and businesses have cut deals to source local sales tax on sales made over the internet solely to particular cities”

What impact does this loophole have:

• companies are rebated tax dollars
• local sales tax dollars are leaving communities

Where are these sales tax agreements found: in economic development agreements

The regulatory fix: Changes to “Rule 3.334 to clarify that local sales tax is tied to the place of business from which internet orders are fulfilled or the location to which items are shipped or delivered.”

Its a $275.8 million problem: In January 2020 $763.8 million in monthly sales tax revenue was distributed to Texas local governments. 1,200-plus cities received $488.7 million. That’s a discrepancy of $275.8 million

Dallas Morning News | Opinion by Texas Comptroller Hegar | How some Texas cities and retailers are using a tax loophole to snatch sales tax revenue from other communities