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.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 27, eff. Sept. 1, 1991.

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 Mar. 23, 2024).

321.001
Short Title
321.002
Definitions
321.003
Other Portions of Tax Applicable
321.004
References to Sales or Use Tax
321.101
Tax Authorized
321.102
Effective Dates: New Tax, Tax Repeal, Boundary Change
321.103
Sales Tax
321.104
Use Tax
321.105
Residential Use of Gas and Electricity
321.106
Fire Control District Tax
321.107
Administration of Local Sales and Use Taxes Imposed by Other Governmental Entities
321.108
Municipal Crime Control and Prevention District Tax
321.201
Computation of Sales Taxes
321.202
Method of Reporting: Retailers Having Sales Below Taxable Amount
321.203
Consummation of Sale
321.204
Computation of Use Tax
321.205
Use Tax: Municipality in Which Use Occurs
321.206
Incidence of Additional Municipal Sales and Use Tax
321.207
Local Tax Inapplicable When No State Tax
321.208
State Exemptions Applicable
321.209
Transition Exemption: General Purpose Sales and Use Tax
321.210
Telecommunications Exemption
321.301
Comptroller to Collect and Administer Taxes
321.302
Comptroller’s Reporting Duties
321.303
Sales Tax Permits and Exemption and Resale Certificates
321.304
Discounts for Prepayment and Tax Collection
321.305
Penalties
321.306
Comptroller’s Rules
321.307
Delinquent Taxes: Limitations
321.308
Seizure and Sale of Property
321.309
Suit for Tax Collection
321.310
Disapproval of Municipal Suit
321.311
Judgments in Municipal Suit
321.312
Retention of Certain Municipal Sales Taxes
321.401
Calling of Election
321.402
Deadlines After Petition
321.403
Time of Election
321.404
Ballot Wording
321.405
Official Results of Election
321.406
Frequency of Election
321.407
Election Contest: Notice
321.408
Election Contest: Delayed Effective Date
321.409
Combined Municipal Sales Tax Ballot Propositions
321.501
Trust Account
321.502
Distribution of Trust Funds
321.503
State’s Share
321.504
Amounts Retained in Trust Account
321.505
Interest on Trust Account
321.506
Use of Tax Revenue by Municipality
321.507
Use of Additional Municipal Sales and Use Tax
321.508
Pledge of Tax Revenue
321.509
Tax Powers of Municipality Not Limited
321.510
Reallocation of Municipal or Local Governmental Entity Tax Revenue
321.1025
Annexation to Certain Regional Transportation Authorities
321.1045
Imposition of Sales and Use Tax in Certain Federal Military Installations
321.1055
Imposition of Fire Control or Crime Control District Tax on the Residential Use of Gas and Electricity
321.2091
Transition Exemption: Additional Municipal Sales and Use Tax
321.3022
Tax Information
321.3025
Disposition of Amount Erroneously Collected
321.5025
Distribution of Trust Funds to Defunding Municipality

Accessed:
Mar. 23, 2024

§ 321.205’s source at texas​.gov