Rio Grande Valley Partnership supports online sales tax change

Local News

BROWNSVILLE, Texas – The Texas Comptroller is looking to update online sales rules and change taxing procedures for online retailers. In short, Texas leaders want to change sales taxes to ensure funds travel to the place of purchase. Now, Brownsville organizations are sending a letter expressing support for the new rule.

On Jan. 3, the Texas comptroller proposed a change in language to Title 34.

“If you, yourself were to go online, purchase an item, you pay the sales tax, as being generated. But the distribution portion of that where does that go.” Josh Mejia is the executive Director of the Greater Incentives Corporation of Brownsville. The have joined with RGV partnership in expressing support for the new change.

Their hope is to bring in funds currently lost to online sales. Mejia says the concept is no different than picking up an item in a physical retail store. “It’s only fair for other people to receive their fair share of sales tax dollars if the transaction happened within the community boundaries.”

Under the current rule, sales tax is paid by consumers, but money often goes to the town or city of the company selling goods. The new proposal changes language to ensure sales tax goes to communities where the sale occurred and where items are shipped. For everyday consumers, the change will not mean higher prices at checkout. 

Mejia says, “It should be business as usual. The regular sales tax that you would pay in person as online would be the same. The only difference is what happens in the back end.”

The intent of the change is to ensure that tax dollars serve the communities in which the sales are taking place in. Ensuring funds that are currently not going to Texas, stay in Texas. The state comptroller is currently accepting comments on the proposal from cities. If adopted, the latest the change may take places is December 31, 2022.

https://www.sos.state.tx.us/texreg/archive/January32020/Proposed%20Rules/34.PUBLIC%20FINANCE.html#57

https://www.tml.org/DocumentCenter/View/1473/LU2020-01

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