1. Who is required to hold a Texas sales and use tax permit?
You must obtain a Texas sales and use tax permit if you are engaged in business in Texas and you:
* sell tangible personal property in Texas;
* lease tangible personal property in Texas; or
* sell taxable services in Texas.
Please see Rule 3.286 and publication 96-259 Taxable Services for more information.
The requirement to obtain a Texas sales and use tax permit applies to individuals as well as corporations, firms, partnerships, and all other legal entities.
2. What is tangible personal property?
The statutory definition for "tangible personal property" is "personal property that can be seen, weighed, measured, felt, or touched or that is perceptible to the senses." See Sec. 151.009.
3. What is engaged in business?
A person or a retailer is engaged in business in Texas if any of the following criteria are met:
* (A) maintains, occupies, or uses an office, place of distribution, sales or sample room, warehouse or storage place, or other place of business;
* (B) has any representative, agent, salesperson, canvasser, or solicitor who operates in this state under the authority of the seller to sell, deliver, or take orders for any taxable items;
* (C) promotes a flea market, trade day, or other event that involves sales of taxable items;
* (D) uses independent salespersons in direct sales of taxable items;
* (E) derives receipts from a rental or lease of tangible personal property that is located in this state;
* (F) allows a franchisee or licensee to operate under its trade name if the franchisee or licensee is required to collect Texas sales or use tax; or
* (G) conducts business in this state through employees, agents, or independent contractors.
I suppose the requirement to pay sales tax depends on the definition of "place of distribution" and "place of business"