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Sales Tax for Library Districts #3. Does your District receive Sales Tax? Are you getting all you are entitled to ? How can you be sure ??

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Presentation on theme: "Sales Tax for Library Districts #3. Does your District receive Sales Tax? Are you getting all you are entitled to ? How can you be sure ??"— Presentation transcript:

1 Sales Tax for Library Districts #3

2 Does your District receive Sales Tax? Are you getting all you are entitled to ? How can you be sure ??

3 Compare the Businesses with the Data The Businesses = any entities carrying out an economic activity resulting in a taxable event in your jurisdictional boundaries The Data = Detailed confidential payment data from the Comptrollers office

4 The Data – Good News and Bad News Good News = You can see it (SB 636) Bad News = Its confidential and misuse is subject to criminal penalties (jail & fine) More Good News = This IS an allowable use of the data per statute Auditing of a payment Economic forecasting Tracking of revenue sharing agreement More Bad News = The reporting threshold ($25K)

5 Auditing - The Easy, the Difficult and the More Difficult Brick and Mortar (physical presence = easy) Home based, contractors (some physical presence = difficult) Itinerant vendors, national companies, construction (no physical presence = more difficult)

6 Further Complications – Point of Sale SB 636 changed it for businesses with multiple locations in the state From where shipped from to where order is taken Temporary Exclusion Clause – Sept 2014

7 Point of Sale Senate Bill 636, passed by the 81st Legislature, changes how retailers who operate multiple places of business in Texas should collect local sales taxes beginning September 1, The bill also contains a temporary exclusion clause that requires qualifying municipalities and counties to provide certain information to the Comptroller's office by September 1, This notice explains the changes related to the collection of local sales taxes and provides instructions to municipalities and counties regarding registration for the temporary exclusion clause. Retailers Operating Multiple Places of Business -- Local Tax Collection Changes are Effective Immediately Prior to the enactment of SB 636, Tax Code Sections and provided that the local sales tax collected on delivery sales by a seller with more than one place of business in Texas was determined by the place of business from which the items were shipped, not the location where the order was received. Senate Bill 636 amends Tax Code Sections and to specify that each sale of a taxable item is now consummated at the retailer's place of business in this state where the retailer first accepts the order, provided that the order is placed in person by the purchaser or lessee of the taxable item. Now, when a purchaser places an order in person, retailers should collect local sales tax based on the location of the place of business where the order is received rather than the place of business from which the item is shipped. Retailers should continue to collect local sales tax based on the "ship from" location on all delivery sales of taxable items that are shipped from a place of business in Texas when the order is not placed in person by the purchaser or lessee. Orders placed over the Internet, by telephone or through the mail are still consummated at the retailer's place of business in this state from which the items are shipped, if the items are shipped from a place of business of the seller in Texas. The Temporary Exclusion Clause and Registration Requirements for Qualifying Local Jurisdictions Temporarily excluded from this change are warehouses that are places of business of a retailer as defined under Tax Code Section , if the retailer has an existing economic development agreement with the municipality or county in which the warehouse is located that was entered into under Local Government Code Chapter 380, 381, 504 or 505, or a predecessor statute, before January 1, This exclusion expires September 1, 2014.

8 Another use of the Data Economic Forecasting Sales Tax revenue forecast for budget purposes Consideration of impact of changes in business mix Consideration of changes in economic factors

9 Slice and Dice Look at the data from multiple perspectives. Look at individual segment performance Look at other indicators that offer some meaningful correlation.

10 Sales Tax Segments

11 Local Sales Tax Revenue CITYWIDE SALES TAX BY ECONOMIC CATEGORY ENDING 2 ND QUARTER 2008

12 Sales Tax v. Median Home Price

13 Sales Tax v. Employment

14 This is NOT a good forecast Allocation Historical Summary Library District ABC Authority Code: JAN2,806, ,160, ,023, ,925, FEB4,665, ,916, ,714, ,598, MAR2,801, ,900, ,668, ,077, APR.2,664, ,731, ,691, MAY.3,742, ,535, ,463, JUN.2,944, ,816, ,670, JUL.3,024, ,987, ,797, AUG.3,598, ,771, ,520, SEP.2,945, ,791, ,932, OCT.2,918, ,889, ,843, NOV.3,509, ,394, ,984, DEC.2,759, ,214, ,911, TOTAL10,273, ,083, ,539, ,416,957.03

15 Sales Tax Forecast – Sample

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17 What can you do? Monitor the data Know what makes up your numbers Be proactive with the business community, if possible

18 Monitor the data (State Comptroller - tons of reports and resources) (research, graphs and charts!)

19 Know what makes up your numbers

20 Be proactive with the businesses Work with EDC Be aware of business closures Be aware of new start ups (Why are they especially important / vulnerable?) Remember they are collecting YOUR sales tax

21 A little about us MuniServices is the leading provider of revenue enhancement services in Texas and in the nation In business for over 30 years Have recovered over $1.3 billion for our clients Over 60 clients in Texas including cities and special purpose districts (library districts, emergency services districts, metropolitan transportation districts)

22 Brian Gordon, CPA Director of Operations, Texas x 6975 Brenda Anderson, Client Services Manager x 6903


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