The Texas (TX) state sales tax rate is currently 6.25%. Depending on local municipalities, the total tax rate can be as high as 8.25%.
At the local levels, city taxes can range from .25% – 2%; county rates vary from .5% – 1.5%; transit from .25% – 1%; and special purpose districts from .125% – 2%. However, the combined rate of local sales and use taxes cannot exceed 2%, making the highest possible combined tax rate 8.25%.
Not all cities and counties have a local code. Cities and counties without a local code do not charge a local sales and use tax. An example of the complexity of Texas state law is Spring, Texas. Spring is unincorporated but is located within a special purpose district. Local sales and use tax collected is not reported to Spring but to one of two possible tax jurisdictions.
Amazon.com owns and operates several fulfillment centers in Texas. This physical presence, or nexus, creates a sales tax obligation for Amazon and many sellers participating in Amazon’s Seller Central and Fulfillment By Amazon (FBA) programs.
Texas sales tax is imposed on the retail sale, lease and rental of most goods and many services. Anyone engaged in these areas of business is required to register with the state and collect and remit Texas sales tax.
How to Register
Businesses may apply for a sales tax permit online but the signature form must be mailed or faxed to the Texas Comptroller. A paper application may also be downloaded and mailed to the Comptroller. It may take up to 3 weeks for the permit to be issued.
How to File and Pay
All sales and use tax return forms are available at the Window on State Government. Qualifying taxpayers may file electronically through WebFile, and taxpayers who remitted $100,000 or more in the preceding fiscal year must pay electronically via TEXNET. Additional information.
Most businesses file monthly returns but the Comptroller may require quarterly or yearly returns, depending on the volume of sales expected. In general:
- Businesses collecting $500 or more in state sales or use tax per month must file monthly.
- Businesses collecting less than $500 in state sales and use tax per month (or less than $1,500 per calendar quarter) may file quarterly.
- Businesses collecting less than $1,000 in state sales and use tax per year may file annually.
Zero returns (no sales tax due) are required.
Preprinted tax returns are sent to “almost all businesses” holding a Texas sales and use tax return. Taxpayers are responsible for filing and remitting payments on time even if they don’t receive preprinted tax returns from the Comptroller. Additional information.
Sales and use tax returns are due on or before the 20th of the month following the reporting period.
Interest on past due taxes begins 61 days after the due date.
Avalara Sales and Use Tax Products for Texas
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TrustFile - Avalara TrustFile provides detailed sales tax reporting for online sellers. Allowing businesses to know exactly where, when and how much to file. Ecommerce business owners can use TrustFile to determine whether or not they are collecting the right amount of sales tax in each individual state, and then store a record of their sales tax history securely in the cloud for free.