Texas Sales Tax Rates

How to register for sales tax in Texas

You have two options to register for a sales tax permit in Texas:

1. Online Registration: This is the faster and recommended method.
   • Visit the Texas Comptroller of Public Accounts website.
   • Click on “Taxes” and then “Sales Tax Permit Application.”
   • You’ll need to create an account if you’re a first-time user and follow the prompts to register your business.
2. Paper Application:
   • Download Form AP-201, Texas Application from the Comptroller’s website.
   • Fill out the application with your business information.
   • Mail the application to the address provided on the form or fax it to the designated number.

How to collect sales tax in Texas

1. Collect the Sales Tax:

• Once you have your permit, you’re legally obligated to collect sales tax at the appropriate rate for your location on all taxable sales.
• You can include the sales tax in your advertised prices or add it separately at checkout.
• It’s a good practice to clearly display the sales tax amount on receipts or invoices.

2. Keep Accurate Records:

• Maintain good records of your sales and the amount of sales tax collected for each transaction.
• These records will be crucial when you file your sales tax returns.

How to get a sales tax permit/license in Texas?

To grab a sales tax permit (aka Texas Sales and Use Tax Permit) in Texas, you have two options:

1. Online: Head to the Texas Comptroller website (https://comptroller.texas.gov/) and navigate to “Sales Tax Permit Application.” Set up an account if needed and register your business.
2. Paper: Download Form AP-201 from the same website, fill it out, and mail/fax it in.

When are Texas’s sales tax returns due?

The due date for your Texas sales tax return depends on your filing frequency, which is assigned when you receive your sales tax permit. Here’s a breakdown:

• Monthly Filers: Due on the 20th of the following month after the reporting period. (Example: September sales tax is due by October 20th)
• Quarterly Filers: Due on the 20th of the month following the end of the quarter. (Example: 1st Quarter – Jan-Mar; due April 20th)
• Annual Filers: Due on January 20th for the previous year’s taxes.

Is anyone exempt from sales tax in Texas?

In Texas, several categories are exempt from paying sales tax on certain purchases. Here’s a general breakdown:

• Government Agencies: State and local government entities are generally exempt from sales tax when purchasing for official government use.
• Non-Profit Organizations: Qualifying non-profit organizations, like religious groups and charities, may be exempt from sales tax on purchases used exclusively for exempt purposes.
• Certain Goods: Texas exempts necessities of life from sales tax, including most unprepared groceries (excluding restaurant meals and prepared foods). Prescription drugs and medical equipment are also exempt.
• Manufacturing and Production: Companies involved in manufacturing, processing, fabrication, or repair may qualify for exemptions on equipment, replacement parts, and certain materials used directly in production.

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Do I Have to Collect Sales Tax from Texas Customers if I Sell on Amazon, Walmart, Ebay, or Etsy?

Texas has a marketplace facilitator law, which means that marketplace providers like Walmart or Amazon are required to collect sales tax on behalf of 3rd party sellers on their platforms.

If you have a sales tax nexus in Texas, remember that you are still required to collect sales tax on your other non-marketplace Texas sales.