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Texas Sales Tax Guide for Businesses

Fast Facts


Return Location:
Online or mail-in

Has Local Filings: Yes

Sales Tax Rate: 6.25% plus local rate

Contact Information: Visit their website or call 800-252-5555 for their sales tax hotline.

How is Tax Calculated?: Texas state and local taxes are based on the origin of the sale (the location of the seller’s place of business).

Are Services Taxable?: Services are sometimes taxable in Texas. Read more here.

 

Nexus in Texas

 

What Creates Nexus: A business is considered to be “engaging in business in Texas” (and therefore owe sales tax) if they:

  • Have an office or place of business in the state
  • Have an employee present in the state
  • Have a place of distribution in the state
  • Have a warehouse or storage space in the state
  • Have a sales or sample room in the state
  • Have any another place where business is conducted in the state. Read more about nexus guidelines here.

Affiliate Nexus:  Texas has affiliate nexus, which has expanded  the definition of a retailer considered to be engaged in business in Texas for use tax collection purposes. Read more about affiliate nexus conditions in Texas here.

eCommerce Nexus?: There are no special laws that create nexus for online sellers in Texas. However the state does have affiliate nexus (see above).

 

How to File a Sales Tax Return in Texas

Online or mail-in: Arkansas recommends that you file a sales tax return using the Texas Comptroller eSystems site. If online filing is not an option, you can also mail in form 01-114. Click here for return forms and instructions.

We will be adding an instructional video here at a later date. 

 

How to Get a Sales Tax Permit in Texas

View our full guide:  Coming soon

Where to Register: Texas Comptroller eSystems

Registration Fee: There is no fee for obtaining a sales tax permit in Texas (a bond may be required but only after the application is filed and reviewed)

Renewal Required?: No, Texas does not require you to renew your sales tax permit.

Texas Sales Tax Filing Frequency

 

Texas has taxpayers file on a monthly, quarterly, or annual basis depending on their average annual tax liability :

Monthly: For average annual tax liabilities above $100,000

Quarterly: For average annual tax liabilities between $10,000 to $100,000

Annually: For average annual sales tax liabilities between $0 to $10,000.

Discounts: There is an early filing discount of 0.5% in Texas. There is also an early payment discount of 1.25%. 

Late Fees: There is a $50 late filing penalty in Texas per each late return. Read more here.

 

Texas Sales Tax Return Due Dates

Texas’ sales tax returns are typically due on the 20th of the following month. Read more on Texas’ website.

Monthly Filing Frequency

January Collection — February 20th

February Collections — March 20th

March Collections — April 20th

April Collections — May 21st

May Collections — June 20th

June Collections — July 20th

July Collections — August 20th

August Collections — September 20th

September Collections — October 22nd

October Collections — November 20th

November Collections — December 20th

December Collections — January 22nd (following year)

Quarterly Filing Frequency

Q1: Jan - March Collections — April 20th

Q2: April - June Collections — July 20th

Q3: July - September Collections — October 22nd

Q4: October - December Collections — January 22nd (following year)

Annual Filing Frequency

January - December Collections — January 22nd (following year)

 

Texas Sales Tax Holidays


Texas offers a “Back to School” tax holiday from August 10th-12th 2018. Read more here.

 

Special Notes for Amazon Sellers

Amazon does have a warehouse in Texas. Be sure to check to see if your FBA inventory is being stored in Texas, as it will create a sales tax obligation.

We can help you determine where Amazon is storing your inventory. Contact us to learn more.

Receive a complementary nexus study from our team.

You'll learn where you owe sales tax and what your historical liabilities are.

Receive a free nexus study to learn where you owe sales tax.

Free Resource: The ULTIMATE Sales Tax Checklist

This guide breaks down the process of getting compliant in 5 simple steps.

 

This is a great resource if you're starting to figure things out on your own.

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