[MichaelColey]

Got a Server in Texas? Beware of New Sales Tax Rules

Texas has codified a rule imposing sales tax collection obligations for companies that merely use a server in the state. Other states have taken the opposite route, specifically providing that the use of a server does not, alone, create nexus for sales tax purposes. These states are looking to attract high-technology businesses, rather than to scare them away.

[isellstuff]

Strange times indeed... Rackspace has a blog post on this:

The Comptroller’s Office has indicated that the language was not intended to be construed as so broad as to extend nexus to anyone using a server in Texas.

Rackspace comments on changes to Texas Sales Tax Rules | The Official Rackspace Blog

The two largest hosting companies in the US, Rackspace and Softlayer/ThePlanet are in Texas. This seems like a pretty strange way for a Republican state to deal with business. I think someone just screwed up...

[CTanK]

Wow, I missed this. Thanks. This will be really interesting to watch.

[Bill]

Originally Posted by CTanK

Wow, I missed this. Thanks. This will be really interesting to watch.

+1

Might also be time to begin looking for a server company in Delaware (or New Hampshire, or Oregon, or Alaska, or Montana).

[Vinny O'Hare]

Heard this was gonna happen about 3 or 4 years ago. It was advised to me at the time to get a server in my own state. Will be fun to watch this.

[loxly]

Most people don't know where their servers are. (I know where mine are.)

[gcarson]

What are servers? Those people who being you your food when you dine out?

[loxly]

lol, you are right, most people don't even know their site is on a "server". They have a site. On the web. Certainly NOT in Texas!

[knight01]

Maybe I wasn't so far off a couple of years ago...

ABestWeb Affiliate Marketing Forum - View Single Post - The NEW NY Internet TAX Law


If this was to be interpreted that the server creates nexus, Texas would have to fight other states in court to get the sales tax from companies that have a presence in the other states but also have servers in Texas. If could be interesting to watch if a state with a large amount of server or co-location businesses decided to make that argument.

I think this may actually have been meant to clarify an issue I recall from the old rackshack days. HeadSurfer insisted on charging us sales tax on servers we leased from them even if we didn't live in Texas. Eventually it was cleared up and we could file with Texas to get our money back. But it was a very confusing situation for several years.

[Chuck Hamrick]

What's the latest on the Texas nexus and can we get a sub forum?

[isellstuff]

Originally Posted by Chuck Hamrick

What's the latest on the Texas nexus and can we get a sub forum?

I saw this from Yahoo yesterday:
How do the changes to Texas sales tax rules affect my business? - Yahoo! Small Business Help

[bobby131313]

Nexus in Texas Averted | tervofinancialfitness.com