Tag: texas comptroller

Who Owes the Sales Tax?

Senators Introduce Online Sales Tax Bill with Bipartisan Support.

The sales tax collected in Texas is in fact a sales and use tax.  When consumers purchase items online and no sales tax is paid, the purchaser is supposed to remit the tax to the state.  Form 01-156 Texas Use Tax Return  should be filed with a payment on or before the 20th day following the period  (month or year) during which items subject to use tax are brought into Texas.  For example, if you purchase a Kindle from Amazon.com, no sales tax is collected.  Your responsibility is to remit the tax.

Why do some online vendors collect sales tax and other’s don’t?

A fancy word for the reason is nexus.  Nexus is a connection and in the sales tax world, that means if a company has a connection to Texas, usually a physical connection, that company is required to collect sales tax.  Amazon.com closed a Dallas distribution center to avoid collecting sales tax  on sales delivered in Texas.

This ability to disregard sales tax on sales creates an advantage for online stores over Main Street stores.  The legislation introduced, referenced above, by a bipartisan group of 10 senators attempts to level that field.  Amazon does support the legislation.

 

Those darn outstanding checks

On June 30 of each year, business owners in Texas need to determine whether they are holding abandoned property:  property for which they have had no contact with the owner for the applicable abandonment period and their whereabouts are unknown.

For most business owners the most common financial assets will be outstanding payroll, accounts payable, or refund checks.  For payroll checks, the abandonment period is one year.  For other checks the period is three years.

The reports are due November 1 and no extension of time to file is available.  Effective for the 2010 reporting cycle, which just ended, holders reporting to Texas are required to mail a notice in July to all owners of property over $250 that are due to be included in their November report.  Here is a sample letter:  Due Diligence Letter.

The Texas Comptroller is able to go back ten years to look for unreported unclaimed property.  Although the Comptroller is holding the property for the rightful owner,  the state wants to be the one holding the property rather than the business owner.   Although there is no legal limit to make a claim, the state can invest this money much as lenders use escrow funds to make money on your money.

Investigate outstanding checks and contact vendors or employees on a regular basis so that you will limit your exposure to the unclaimed property regulations.