Texas Introduces Bill to Tax Online Sales

Texas has introduced two bills recently, which would both impose a sales tax collection requirement on online retailers. In Texas House Bill 1317, the state is modeling the New York legislation, which would require any online merchants with Texas affiliates, who earn more than $10,000 per year in Texas-based sales, to begin collecting and passing along the state’s sales tax.

That makes Texas the 12th state to introduce legislation this year. Currently there are bills pending in Arizona, Arkansas, California, Connecticut, Hawaii, Minnesota, Mississippi, New Mexico and Vermont. Illinois has already signed its legislation into law, and South Dakota has passed legislation as well, although it took a different route, which doesn’t require online sellers to collect sales tax.

Perhaps of more concern is Texas House Bill 2403, which is in committee. Under this proposed legislation, any retailer who has a website hosted by a Texas-based server, which server is used to sell or deliver digital goods, would become subject to collecting Texas sales tax, regardless of where that retailer was located.

It’s hard to say how well either Texas bill will fare. But both bills could significantly impact the Texas market.