SECTION 3.711. Battery Sales Fee Collection and Reporting Requirements

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Dealer--A wholesaler, retailer, or any other person who sells or offers to sell lead-acid batteries.

(2) Lead-acid battery--Any battery, new or used, which contains lead and sulfuric acid, in liquid or gel form.

(3) Marketplace--A physical or electronic medium through which persons other than the owner or operator of the medium make sales of lead-acid batteries. The term includes a store, Internet website, software application, or catalog.

(4) Marketplace provider--A person who owns or operates a marketplace and directly or indirectly processes sales of or payments for lead-acid batteries for marketplace sellers.

(5) Marketplace seller--A seller, other than the marketplace provider, who makes a sale of a lead-acid battery through a marketplace.

(6) Sale for resale--A sale of a lead-acid battery to a purchaser for the purpose of reselling the battery in the normal course of business in the form or condition in which it is acquired (i.e., as a separate item). A sale of a battery that is attached to or becomes an integral part of a vehicle, boat, or other equipment that is being sold, rented, or leased is not a sale for resale. The battery sales fee is due on the sale prior to the battery becoming a part of this equipment.

(b) Collection of the fee.

(1) Except as provided in subsection (h) of this section, a dealer, and effective July 1, 2022, a marketplace provider, must collect the fee on each sale of a lead-acid battery that is not for resale.

(A) For each lead-acid battery with a capacity of less than 12 volts, the fee is $2.00.

(B) For each lead-acid battery with a capacity of 12 or more volts, the fee is $3.00.

(C) A fee shall not be charged, collected, or allowed as an offset on a battery taken as a trade-in.

(2) If a dealer or a marketplace provider fails to collect the fee required in paragraph (1) of this subsection, the comptroller may collect the fee from the purchaser.

(3) The fee is not due on the sale of a vehicle, boat, or other equipment that has a battery as an integral part of it.

(4) The amount of the fee due must be separately stated on the invoice, bill, or contract to the customer and shall be identified as the Texas battery sales fee.

(5) A dealer or a marketplace provider may not advertise, make public, indicate, or imply that the dealer or marketplace provider will absorb, assume, or refund any portion of the fee.

(c) Due date and reporting requirements.

(1) Monthly filing. The battery sales fee is due and payable on or before the 20th day of the month following the end of each calendar month. Returns must be filed on a monthly basis unless a dealer or a marketplace provider qualifies as a quarterly filer under paragraph (2) of this subsection.

(2) Quarterly filing. A dealer or a marketplace provider who owes an average, as computed for the year, of less than $50 for a calendar month or less than $150 for a calendar quarter is required to file a return and remit the collected fees on or before the 20th day of the month following the end of the calendar quarter. The comptroller will notify a dealer or marketplace provider when the report and payment may be submitted quarterly.

(d) Report forms. The battery sales fee is to be reported on the Texas battery sales fee report form as prescribed by the comptroller. The fact that the dealer or a marketplace provider does not receive the form or does not receive the correct form from the comptroller for the filing of the return does not relieve the dealer or marketplace provider of the responsibility of filing a return and remitting the fee.

(e) Remittance of the fee.

(1) On or before the 20th day of the month following each reporting period, every dealer or marketplace provider required to collect the fee shall file a consolidated return for all businesses operating under the same taxpayer number and remit the total fee due.

(2) The returns must be signed by the dealer or marketplace provider required to file the return or by the dealer's or marketplace provider's duly authorized agent.

(f) Discount. A dealer or marketplace provider who is required to collect the battery sales fee may retain $.025 from each fee collected.

(g) Records required.

(1) Invoices or other records must be kept for at least four years after the date on which the invoices or records are prepared.

(2) The comptroller or an authorized representative has the right to examine any records or equipment of any dealer or marketplace provider liable for the fee to verify the accuracy of any return made or to determine the fee liability in the event no return is filed.

(h) Exemptions.

(1) Sales for resale are not subject to the fee.

(2) The sale of a battery that under the sales contract is shipped to a point outside Texas is not subject to the fee imposed by this section if the shipment is made by the seller by means of:

(A) the facilities of the seller;

(B) delivery by the seller to a carrier for shipment to a consignee at a point outside this state; or

(C) delivery by the seller to a forwarding agent for shipment to a location in another state of the United States or its territories or possessions.

(3) Exports beyond the territorial limits of the United States are not subject to the fee. Proof of export may be shown only by:

(A) a copy of a bill of lading issued by a licensed and certificated carrier showing the seller as consignor, the buyer or purchaser as consignee, and a delivery point outside the territorial limits of the United States;

(B) documentation provided by a licensed United States customs broker certifying that delivery was made to a point outside the territorial limits of the United States;

(C) formal entry documents from the country of destination showing that the battery was imported into a country other than the United States. For the country of Mexico, the formal entry document is the pedimento de importaciones document with a computerized, certified number issued by Mexican customs officials;

(D) a copy of the original airway, ocean, or railroad bill of lading issued by a licensed and certificated carrier which describes the items being exported and a copy of the freight forwarder's receipt if the freight forwarder takes possession of the property in Texas; or

(E) a purchaser's blanket maquiladora exemption certificate and a copy of the purchaser's maquiladora export permit provided to the seller as required under §3.358 of this title (relating to Maquiladoras).

(4) There is no exemption provided for any organization or governmental agency, except as provided in paragraph (5) of this subsection.

(5) The United States, its instrumentalities, and agencies are exempted from the battery sales fee.

(6) Sales for disposal or reclamation are not subject to the fee.

(7) The battery sales fee does not apply to a sale of a battery made by a dealer or a marketplace provider when it meets all of the following criteria:

(A) the ampere-hour rating of the battery is less than 10 ampere-hours;

(B) the sum of the dimensions of the battery (height, width, and length) is less than 15 inches; and

(C) the battery is sealed so that no access to the interior of the battery is possible without destroying the battery.

(i) Replacements covered by a warranty or service contract.

(1) The replacement of a battery under a manufacturer's warranty, without an additional charge to the purchaser, is not the sale of a battery to the purchaser. This replacement, therefore, is not subject to the fee. If there is a charge to the customer for the replacement (such as a pro rata warranty adjustment), then the customer must pay the battery sales fee.

(2) The replacement of a battery under an extended warranty or a service contract, for which the customer pays an extra charge, depends on the terms of the contract.

(A) If the replacement is free of charge to the customer, the dealer is responsible for paying the fee.

(B) If there is a charge to the customer for the replacement, the customer must pay the fee.

(j) Penalty. A dealer or marketplace provider who does not file a report as provided by this section, or who possesses a fee collected or payable under this section and does not timely remit the fee to the comptroller, shall pay a penalty of 5.0% of the amount of the fee due and payable. If the dealer or marketplace provider does not file the report or pay the fee before the 30th day after the date on which the fee or report is due, the dealer or marketplace provider shall pay a penalty of an additional 5.0% of the amount of the fee due and payable.

(k) Interest. Interest accrues on the unpaid fee due beginning 60 days after the due date and ends the day on which the fee is paid.

Source Note: The provisions of this §3.711 adopted to be effective April 28, 1992, 17 TexReg 2779; amended to be effective October 14, 1993, 18 TexReg 6744; amended to be effective October 12, 2004, 29 TexReg 9555; amended to be effective February 18, 2007, 32 TexReg 537; amended to be effective May 4, 2020, 45 TexReg 2886; amended to be effective October 5, 2023, 48 TexReg 5739