R-2008-10 oppose any legislative action that would change existing sales tax laws

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RESOLUTION NO. 2008- iO- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS, SOLICITING SUPPORT FROM THE TEXAS MUNICIPAL LEAGUE FOR LEGISLATIVE ACTION TO PROTECT TEXAS MUNICIPALITIES' SALES TAX REVENUE BY MODIFYING TEXAS TAX CODE CHAPTER 321, MUNICIPAL SALES AND USE TAX ACT WHEREAS, Chapter 321 of the Texas Tax Code, also known as the Municipal Sales and Use Tax Act, authorizes a municipality to impose a tax upon the sale or use of certain items within its jurisdiction; and WHEREAS, Section 321.002 ofthe Municipal Sales and Use Tax Act defines a place of business of a retailer to be an established outlet, office, or location operated by the retailer for the purpose of receiving orders for taxable items and includes any location at which three or more orders are received by the retailer during a calendar year, specifically excluding a warehouse, storage yard, or manufacturing plant unless three orders are received at that location; and WHEREAS, Section 321.203 of the Municipal Sales and Use Tax Act considers the sale of a taxable item to be consummated at a retailer's place of business which can be either the location from which the retailer ships or delivers the item or where the purchaser or lessee takes possession and removes the item from the place of business; and WHEREAS, a retailer can easily create a very small number of sales transactions for the purpose of meeting the definition of a place of business for its own financial reward, causing harm to the municipalities supporting the retail establishment; and WHEREAS, this manipulation of current sales tax law has been the basis for reallocating millions of dollars between municipalities within the State of Texas; and WHEREAS, under existing law the municipalities from which sales tax revenue has been reallocated have no recourse upon the State of Texas nor the retailer; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS: Section 1. That the facts and recitations set forth in the preamble of this resolution are accurate and correct. Section 2. That the City of La Porte, Texas, supports legislative action that would significantly increase the three-sale requirement in Section 321.002 of the Municipal Sales and Use Tax Act for determining whether a warehouse, storage yard, or manufacturing plant can be considered a place of business of the retailer for sales tax sourcing.