Could Louisiana parish tax reduce the Texas state or local use tax due when repaired items were delivered into Texas?

Plain-English summary

Texas state use tax applied to repaired items delivered into Texas for use in Texas.

When the seller's salespeople delivered repaired items inside a Texas city, county, transit authority, or other local taxing jurisdiction, that representation required the seller to collect the applicable local use tax in addition to state tax.

Caddo Parish's 2.5% tax did not reduce the Texas tax due. The Texas 2% cap on local taxes applied only to Texas local taxes, not another state's tax. If the seller was not required to collect a local use tax that was nevertheless due, the customer had to report it directly to the Comptroller.

Common questions

Did Texas use tax apply to the repaired items? Yes, when delivered into Texas for use here.

When did the seller have to collect local use tax? When its salespeople delivered into the local taxing jurisdiction, giving the seller representation there.

Did Caddo Parish tax count toward Texas's 2% local-tax cap? No.

Who reported local use tax when the seller did not have to collect it? The customer.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9006L1041F06

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

BOB BULLOCK
Comptroller

June 13, 1990

Dear **:

Thank you for your letter dated May 30, 1990, concerning the correct
amount of Texas use tax to charge customers that have items repaired
in Louisiana and delivered into Texas for use here.

According to the information that you provided, Caddo Parish claims
that its 2 1/2% parish tax is due on all items repaired in that
parish, regardless of whether the repaired item is immediately shipped
to a customer outside the state. The State of Louisiana, however, does
not assess sales tax on repaired items that are shipped to customers
outside the state.

Texas use tax is due on all items delivered into Texas for use in
Texas. If your salesmen deliver repaired items to customers inside
a taxing city, county, transit authority, etc., then you must collect
the local use tax due, in addition to the state use tax, since you
have representation in that taxing jurisdiction.

If you are required to collect the tax, then you must collect the
correct amount of Texas use tax due, regardless of whether the Caddo
parish tax is collected or not. The 2% cap on local taxes applies to
Texas tax, not another state's taxes.

If you are not required to collect a local use tax that is due, then
the customer will be responsible for reporting it directly to the
Comptroller's office.

This opinion is based upon the facts you presented. If there are ad-
ditional or different facts, this opinion may change.

Please feel free to contact me if you have any additional questions.
You may write me, call toll free 1- 800- 252-5555 (ext. 3-4685) from
anywhere in the United States or phone 512/463-4685.

Sincerely,
Julie Pesl
Tax Correspondence