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Texas retroactively eliminates sales tax trailing nexus for out-of-state sellers

The Texas comptroller recently adopted a change to its administrative rule dealing with the nexus requirements for sales tax permit registration and tax collection responsibilities of out-of-state sellers. The rule amendment eliminates the requirement that an out-of-state seller continue to be responsible for collection of tax from Texas customers for 12 months after the seller ceases to have nexus in Texas (i.e., trailing nexus). The amendment also clarifies when an out-of-state seller is considered to have ceased having nexus in Texas, and specifies that the seller maintain documentation for at least four years showing the date the seller ceased to have nexus in the state. The policy change on trailing nexus is retroactive, so this may impact out-of-state sellers immediately, and have implications for sellers under audit or seeking voluntary disclosure agreements with the comptroller.

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