Tax & Accounting Blog

Texas Introduces Click-Thru Nexus Bill

Indirect Tax, Sales Tax Nexus February 24, 2011

On February 15th in what, due to its timing, looks like a response to Amazon closing its Texas distribution centers Texas introduced an affiliate nexus bill. HB 1317 is a New York style bill which would, if enacted, amend section 151.107 of the Tax Code by adding the following:

(d)  For the purpose of this subchapter and in relation to the use tax, there is a rebuttable presumption that a retailer is engaged in business in this state if the retailer:

(1) enters into an agreement with a person who is a resident of this state under which the resident receives a commission or other consideration for directly or indirectly referring potential customers to the retailer by any means, including by a link on an Internet website; and (2) during the previous four calendar quarters received at least $10,000 in cumulative gross receipts from sales to consumers located in this state who were referred to the retailer by residents under agreements described by Subdivision (1).

(e)  The presumption under Subsection (d) may be rebutted by proof that the resident with whom the retailer has an agreement described by Subsection (d)(1) did not engage in any solicitation in this state on behalf of the retailer that would satisfy the nexus requirement of the United States Constitution during the period described by Subsection (d)(2).

The Act would take effect on September 1, 2011 if passed.