How to register for a Texas Sales Tax Permit
A sales tax permit is required for most Texas businesses that sell products or offer services. This is also known as a seller’s license, sales tax license or sales tax number.
You can read the rest of the guide to find out who requires a sales tax permit and what products and services are subject to it. Also, learn how to register for one and what reporting requirements you need.
A Texas sales tax permit is required for who?
Texas requires that a business register for a sales tax permit.
- Economic nexus is a business that has a physical presence in the state. Economic nexus is a business’s physical presence in a state. This could be a store, office, warehouse, or fulfillment center that stores inventory.
- Texas: A Texas business that sells tangible personal property.
- Texas: Leases and rents tangible personal property;
- Texas Taxable Services, Inc.
- Texas residents can buy products and services worth over $500,000 from a remote seller or out-of-state company.
Which products and services are subject to Texas tax?
Products made of physical materials
Although there are some exceptions, almost all physical products in Texas are taxable when purchased at retail. Common examples include:
- General merchandise such as furniture, appliances, clothing
- Vehicles, such as vehicles, that are registered or title-registered
The majority of food and health-related products are exempt from Texas taxes, along with certain goods used in manufacturing.
Digital products are taxable, as long as the same item is taxable in its physical form, such as books, movies, or music.
Texas does not tax most services. However, there are some exceptions.
- Staying for a short time
- Entertainment services include movie theatres, sporting events, and bowling alleys.
- Personal property maintenance, remodeling or repair services, such as appliance repair and jewelry repair, dog grooming, and so on.
- Taxable labor includes photography, art, sewing, tailoring, catering, and assembling products.
The Comptroller of Public Accounts has a guide on what services are taxable for Texas.
How to apply for a Texas sales tax permit
Each location requires a separate permit.
Registering is easy with the following information:
- Types of business entities: Sole Proprietorship, Partnership, Corporation, Limited Liability Company, LLC
- Texas Secretary of State provides the file number for corporations in Texas (only for LLCs or corporations)
- The legal name of your business
- Federal Employer Identification Number (FEIN), with the IRS. If the entity is a sole proprietorship without employees, the SSN will be used.
- Name, addresses, phone number, social security number, and tile of owners/officers/members
- Mailing address and physical address
- It does not matter if the business is located at home.
- Monthly taxable sales forecast
- North American Industry Classification System code (NAICS).
The law in Texas requires that the telephone number used to register for a sales tax permit must be made public. Telemarketers will make a lot of calls to your phone, so you might consider adding another number to reduce the volume.
Sales tax reporting
What is the sales tax?
When a business sells taxable items or services, the appropriate sales tax rate is charged to customers. The business collects the tax and sends it to Texas Comptroller of Public Accounts.
What is Texas’ sales tax?
If the purchase is made in-store, the sales tax rate charged will vary depending on where the business is located. The address of the buyer is used to calculate the sales tax for shipping within the state.
Local sales taxes can be added to the statewide tax by counties, special-purpose areas, cities, transit authorities, and other municipalities. The Texas Comptroller of Public Accounts has the sales rate locator.
When is Texas’ sales tax return due?
The Comptroller of Public Accounts determines the filing frequency based upon expected sales volume. This may be monthly, quarterly or annual. A business that sells more than $8,000 per month will generally file monthly.
Filings must be made by the 20 th day in the month after the reporting period, unless it falls on a weekend, federal holiday or another such event, which would shift to the next business day.
A filing is required even if there were no sales during the reporting period.
What is the cost of a Texas sales tax permit?
A Texas sales tax permit is free. However, certain businesses will need to post a bond.
What is the average time it takes to obtain a Texas sales tax permit.
If you submit your sales tax permit online, it will take 2-3 weeks for processing. It can take up to 4 weeks if you send it by mail.
Is it necessary to renew your Texas sales tax permit
A sales tax permit is only valid once and does not need to be renewed. Please be aware that any changes to the business information, such as the mailing address or additional locations, need to be reported to the Comptroller of Public Accounts.
How can I obtain a Texas wholesale license?
Businesses can buy items for resale without having to pay state sales tax. The wholesaler or supplier is responsible for the tax and the retailer will charge the sales tax to the end-user.
Distributors and wholesalers will need a sales tax number. They will often require resellers to complete a Texas Resale Certificate to prove that the items purchased are being resold.
What is the difference between a business license and a sales tax permit for a business?
You will need to register for a Texas sales tax permit. There may also be additional business licenses required before you start a business.
Brian Wilson is the content manager and founder of LLC Radar.
Brian grew up in North Texas, just outside of Dallas, and has a bachelor’s degree in business journalism from Southern Methodist University. Since graduating from SMU, Brian has gained over 10 years of experience in business writing for several online publications.
Brian resides in Plano, Texas and he can be reached by email: firstname.lastname@example.org