联系, 特许税, 销售税 Implications
We were recently approached by a newspaper reporter asking us to address the franchise and sales tax ramifications of an out-of-state consulting firm sending an employee into Texas to conduct political consulting. The consultant has visited Texas on multiple occasions and bills between $50,000年和100美元,000 in fees on an annual basis.
We reviewed and researched the limited facts presented and advised that the Texas franchise tax is a privilege tax and nexus is created under the Texas 联系 规则3.586. 联系 is created by any of the revenue producing activities cited in that ruling if the imposition of nexus does not violate the due process clause of the US Constitution.
Based on the limited facts presented, the person coming to Texas for political consulting would fit under that rule. If nexus exists, and if it involves a taxable entity (i.e., certain exceptions apply), then the franchise tax responsibility would exist, and the person or entity should comply with the law accordingly. This would include registering with the Secretary of State’s office and the filing of franchise tax reports.
Each taxable entity doing business in Texas must file and pay applicable franchise tax. 这些实体包括:
- limited liability companies (LLCs), including series LLCs;
- state limited banking associations;
- savings and loan associations;
- professional 企业;
- partnerships (general, limited and limited liability);
- professional associations;
- joint ventures; and
If the entity has total revenues in 2016 or 2017 of less than $1,110,000, no tax would be due.
一般来说, political consulting services are not taxable unless they are connected to the sale of tangible personal property (i.e., printed materials, political signs or stickers, 等.) or one of the unique and often vague taxable services (税收规则3.342 – Information 服务 and 税收规则3.330 – 数据处理 服务) – see below.
Unrelated consulting services which are the expert or professional opinions of the political consultant are not taxable when they are separately stated and not connected in any way to the sale of a taxable item (tangible personal property or service).
例如, separately stated charges for general political consulting or professional services, such as management consulting, issue identification and policy decisions and public relations which are not related to a taxable item or service being sold would be considered nontaxable consulting services.
We addressed some services that may be provided by a political consultant and the sales tax implications of each, 如:
税收规则3.342 – Information 服务
Taxable information 服务 as set out in 规则3.342(a)(6)- Information 服务 would include: Information that is gathered, 维护, or compiled and made available by the provider of the information service to the public or to a specific segment of the industry for a consideration is subject to sales tax. Examples of taxable information services include, but are not limited to, the following:
- mailing lists (which represents names of persons located in Texas are taxable);
- non-exempt demographic information
- news clipping services and wire services;
Examples of nontaxable information services include:
- Opinion Polls and Consultant Reports – are excluded as taxable information services under 规则3.342 (a)(5)(A).
税收规则3.330 – 数据处理 服务
数据处理. Political Consultants may provide their clients with data such as, 选民名单, voting history by precinct, political party preference by zip code or precinct, 等. A charge by the consultant for the compilation, 信息存储, manipulation or data entry would be taxable as data processing services if performed with the use of a computer. 规则3.330 Data processing services.
总之, an out-of-state firm conducting political consulting on a recurring basis for consideration is likely engaged in business in Texas and must register for franchise tax reporting. Depending on the specific services provided in Texas, the consulting firm may be responsible for collecting and reporting sales taxes if it is also providing sales of taxable items or services.