Tex.
Tax Code Section 321.205
Use Tax: Municipality in Which Use Occurs
(a)
In determining the incidence of the use tax authorized by this chapter the name of the municipality adopting the tax is substituted in Subchapter D (Use Tax Imposed), Chapter 151 (Limited Sales, Excise, and Use Tax), for “this state” where those words are used to designate the taxing entity or delimit the tax imposed. However, the excise tax authorized by this chapter on the use, storage, or consumption of a taxable item does not apply if the item is first used, stored, or consumed in a municipality or area that has not adopted the taxes authorized by this chapter.(b)
If a sale of a taxable item is consummated in this state but not within a municipality that has adopted the taxes authorized by this chapter and the item is shipped directly, or brought by the purchaser or lessee directly, into a municipality that has adopted the taxes authorized by this chapter, the item is subject to the municipality’s use tax. The use is considered to be consummated at the location where the item is first stored, used, or consumed after the intrastate transit has ceased.(c)
If a taxable item is shipped from outside this state to a customer within this state and the use of the item is consummated within a municipality that has adopted the tax authorized by this chapter, the item is subject to the municipality’s use tax and not its sales tax. A use is considered to be consummated at the first point in this state where the item is stored, used, or consumed after the interstate transit has ceased. A taxable item delivered to a point in this state is presumed to be for storage, use, or consumption at that point until the contrary is established.(d)
The holder of a direct payment permit issued under Chapter 151 (Limited Sales, Excise, and Use Tax) who becomes liable for the use tax under this chapter by reason of the storage, use, or consumption of a taxable item purchased in this state under a direct payment exemption certificate shall allocate the tax to the municipality in which the item was first removed from the permit holder’s storage, or if not stored, the place at which the item was first used or consumed by the permit holder after transportation. In this subsection an item is not considered to have been stored, used, or consumed because of a temporary delay or interruption necessary and incidental to its transportation or further fabrication, processing, or assembling within this state for delivery to the permit holder. A charge for fabrication, processing, or further assembly in a municipality that has adopted the tax under this chapter shall be subject to the municipal use tax.(e)
With respect to a taxable service, “use” means the derivation in the municipality of direct or indirect benefit from the service.
Source:
Section 321.205 — Use Tax: Municipality in Which Use Occurs, https://statutes.capitol.texas.gov/Docs/TX/htm/TX.321.htm#321.205 (accessed Jun. 5, 2024).
