Oppose Senate Bills 296 and 159
Oppose Senate Bills 296 and 159
OPPOSE SB 296
SB 296 shortens the deadline for business owners to provide resale and exemption certificates by approximately 6 months during a Texas Comptroller Sales Tax Audit.
SB 296 will significantly restrict business owners the right to provide resale and/or exemption certificates during a sales audit
SB 296 dramatically shortens the existing deadline to provide certificates during a sales tax audit and will certainly result in the incorrect and overassessment of sales tax. Missing certificates can be used in sample / projection audits to create enormous additional false tax due assessments.
The new deadline would be set at an arbitrary point in the middle of an active audit called the EXIT CONFERENCE DATE. The Exit Conference Date is nothing more than an arbitrary point chosen by the auditor during the field audit.
Tax Rules 3.285 & 3.287 provide by CLEAR language the right by a taxpayer under audit to provide resale and/or exemption certificates well past the exit conference date. Specifically, both Tax Rules both state that: ……The seller has 60 days from the date written notice is received by the seller from the comptroller in which to deliver the certificates to the comptroller. Written notice shall be given by the comptroller upon the filing of a petition for redetermination or claim for refund. Again, all taxpayers under a sales tax audit are granted by (Tax Rules 3.285 & 3.287) 60 days past the DATE of the notice of hearings approval letter to provide resale and/or exemption certificates. This 60 Day Deadline Date occurs WELL after the audit has been completed, billed and the taxpayer has requested an Administrative Hearing (Redetermination).
In addition, since 1981 (40 years) Tax Code, Section 151.054(e) has contained language allowing any business up until 60 days from a written notice being issued to provide resale and/or exemption certificates.
The Texas Comptroller’s Office has allowed any business owner up until 60 days from the date of an Administrative Hearing has been approved to provide certificates. This occurs well after an audit is completed.
ANY business owner that is required to maintain resale and/or exemption certificates should be concerned about this arbitrary shortened deadline which could shorten the time to provide these important certificates by up to 6 months (see graphic).
OPPOSE SB 159
SB 159 will DENY the right for any consulting firm to contact a taxpayer under audit for 30 days until after the notice of audit has
been published by the Texas Comptroller. This proposed bill directly conflicts with The Texas Open Record Act of 1993 – Section 552.001 .
This ACT orders the Comptroller to publish (at no charge) the information of all taxpayers under an audit and implicitly allows
consultants to contact those business owners to offer their audit defense services
Sec. 552.001. POLICY; CONSTRUCTION. (a) Under the fundamental philosophy of the American constitutional form of representative government that adheres to the principle that government is the servant and not the master of the people, it is the policy of this state that each person is entitled, unless otherwise expressly provided by law, at all times to complete information about the affairs of government and the official acts of public officials and employees. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. The people insist on remaining informed so that they may retain control over the instruments they have created. The provisions of this chapter shall be liberally construed to implement this policy. (b) This chapter shall be liberally construed in favor of granting a request for information.
Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. *Current law, Tax Code, Section 111.0075(b), already provides a 6-day waiting period before tax consultant business may contact a business owner in regards to an audit notice. This is enough time for the business to receive their audit notice.
*It should be noted that the Texas Comptroller does not enforce the existing 6 DAY – DO NOT CALL PERIOD per 111.0075. The agency has consistently refused to include language in the Audit Notice Letter referring to the 111.075 requirement that consultants should not call for a 6 day waiting period starting on the date the audit information become public. In addition, the agency has never issued a fine to any consulting firm for violating this 6 day waiting period. Enforce the existing ‘6 DAY DO NOT CALL’ law. There is no need for a 30 day DO NOT CALL law.
*Sb 159 would extend this WAIT TO CALL PERIOD to 30 days which: (1) effectively allows the auditor to begin the audit BEFORE any consultant can even contact the taxpayer under audit and (2) potentially denies a business owner the opportunity to receive solicitations from Texas Sales / Use Tax consultants and decide if they would prefer to hire a firm to represent their company for the audit.
*The proposed “30-day waiting period” denies tax consultants the RIGHT to contact business owners under audit for 30 days.
*This is not in the spirit of the Texas Open Records Act, the 1994 Attorney General Opinion Letter #624 and the Texas Supreme Court decision.
*Glenn Hegar’s own Taxpayer BILL OF RIGHTS (#5) states that: YOU HAVE THE RIGHT TO REPRESENTATION – We recognize that audits can be intimidating, and every taxpayer has the right to engage the person of their choice to represent them during that process”.
*This broad brush attempt to deny Texas taxpayer the right of choice regarding hiring an experienced consultant BEFORE the auditor has received ANY RECORDS is Un-Texan and against the Open Records Act.
*ANY concerns about tax consultants violating the current 6-day rule should be remedied by other means already available in statute; NOT by punishing tax consultant companies that comply with the law.
*For further information please contact Ron Hinkle, 512.567.5250, Texas Tax Group, LLC, 9950 Westpark Drive, Suite 430, Houston, Texas 77063
1 – 87(R) SENATE BILL – SB 296 – (amends Section 151.054 – denial of all resale & exemption certificates prior to end of audit)
2 – 87(R) 7 Stages for Bill to become law – SB 296 (status – stage 1)
3 – SPONSOR – Senator Charles Perry (R) – District 28 (LUBBOCK, TEXAS)
4 – SPONSOR – Representative Dustin Burrows (R) – District 83 (LUBBOCK, TEXAS)
5 – EXIT BROCHURE – COMPTROLLER BROCHURE (CONTESTING DISAGREED AUDITS)
6 – SECTION 151.054 – GROSS RECEIPTS PRESUMED SUBJECT TO TAX (AKA – SALES TAX – RESALE & EXEMPTION CERTIFICATE STATUTE)
7 – TAX RULE 3.285 – RESALE CERTIFICATES, SALES FOR RESALE
8 – TAX RULE 3.287 – EXEMPTION CERTIFICATE