Texas — Sales & Use Tax

Texas imposes a state sales tax on each sale of a taxable item in the state. The state tax rate is 6.25 percent of the sales price. Source: Tex. Tax Code § 151.051

A "taxable item" includes both tangible personal property and taxable services. Tangible personal property is defined as personal property that can be seen, weighed, measured, felt, or touched or that is perceptible to the senses in any other manner; for sales tax purposes, the term includes computer programs and telephone prepaid calling cards. Source: Tex. Tax Code § 151.009

Sales of tangible personal property are presumed subject to tax unless a specific exemption applies. Taxable services are not presumed taxable; instead, tax applies only to those services specifically enumerated in Tex. Tax Code § 151.0101, which includes categories such as amusement services, motor vehicle parking and storage, real property services, telephone services, and data processing services, among others. Source: Tex. Tax Code § 151.0101

## Local Sales Tax

Local jurisdictions (cities, counties, transit authorities, and special-purpose districts) may impose additional sales tax on top of the state rate. Local taxes may add up to 2 percent, bringing the combined maximum rate to 8.25 percent. The Texas Comptroller of Public Accounts collects both state and local sales tax through a unified system. Source: Texas Comptroller — Sales and Use Tax

## Use Tax

Texas also imposes a complementary use tax at the same 6.25 percent rate on the storage, use, or other consumption in Texas of taxable items purchased from a retailer, when sales tax was not collected at the time of purchase. Use tax ensures that items purchased outside Texas for use within the state are subject to the same tax burden as items purchased in-state. Source: Tex. Tax Code § 151.101

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Review Status: Not yet human confirmed as of 2026-05-26.

Remote sellers with no physical presence in Texas must register and collect sales and use tax if their total Texas revenue exceeds $500,000 in the preceding twelve calendar months. This economic nexus threshold became effective October 1, 2019, following the U.S. Supreme Court's decision in South Dakota v. Wayfair.

Total Texas revenue includes gross revenue from all sales of tangible personal property and services delivered into Texas—both taxable and nontaxable sales, including sales for resale and sales to exempt entities. The threshold is measured on a rolling twelve-month basis, not by calendar year.

A remote seller is an out-of-state seller whose only activity in Texas is the remote solicitation of sales. If a seller has a physical presence in Texas (business location, employees, representatives, or inventory), the seller is not a remote seller and must register regardless of revenue.

Once the $500,000 threshold is exceeded, the remote seller must register for a Texas sales and use tax permit and begin collecting tax by the first day of the fourth month following the month in which the threshold was crossed. For example, a seller exceeding the threshold in March must register by June 1.

Remote sellers who sell exclusively through marketplace facilitators that certify they will collect tax on the seller's behalf are not required to obtain a Texas tax permit, but must retain records for at least four years.

Source: Texas Comptroller – Remote Sellers Source: Texas Comptroller – Remote Sellers and Marketplace FAQ

A marketplace provider engaged in business in Texas must collect, report, and remit state and local sales and use tax on all sales of taxable items made through its marketplace. A marketplace provider is defined as a person who owns or operates a marketplace—a physical or electronic medium such as a store, website, software application, or catalog—and directly or indirectly processes sales or payments for marketplace sellers.

The marketplace provider must certify to each marketplace seller that it assumes the seller's tax collection and remittance duties. Once a marketplace seller accepts this certification in good faith, the seller excludes those marketplace sales from its own tax report. This requirement took effect October 1, 2019.

Source: Tex. Tax Code § 151.0242 Source: Texas Comptroller – Marketplace Providers and Marketplace Sellers

A seller may accept a properly completed resale certificate in good faith to document an exempt sale for resale. All gross receipts are presumed subject to sales tax unless the seller accepts a properly completed resale or exemption certificate. Sellers must retain resale certificates for at least four years from the date of sale. The certificate should be in the seller's possession when the nontaxable transaction occurs; if a certificate is not in the seller's possession within 90 days of written notice from the Comptroller, the deduction may be denied.

Source: Tex. Tax Code § 151.054 Source: Texas Comptroller – Resale Certificate FAQ

Sales and use tax is due and payable on or before the 20th day of the month following the end of each calendar month, unless the taxpayer qualifies as a quarterly filer. A taxpayer who owes less than $500 for a calendar month or less than $1,500 for a calendar quarter qualifies for quarterly filing, with returns due on the 20th day of the month following the end of each calendar quarter. When the 20th falls on a weekend or federal holiday, the due date extends to the next business day.

Source: Tex. Tax Code § 151.401 Source: Texas Comptroller – Sales and Use Tax

The Texas Comptroller issues a deficiency determination when it determines that a taxpayer has not paid the correct amount of sales or use tax. Under Tex. Tax Code § 111.008, if the Comptroller is not satisfied with a tax report or the amount of tax paid, the Comptroller may compute and determine the amount of tax due based on information in the report or from any other available information. The Comptroller must notify the taxpayer of the determination by mail, electronic means (if the taxpayer has an email address on file with the Comptroller), or personal service. When notice is given by mail, service is complete when the notice is deposited in a U.S. Post Office, addressed to the taxpayer's address as it appears in the Comptroller's records.

The notice of determination (also called a "Notification of Audit Results," "Notification of Exam Results," or "Notice of Tax/Fee Due") sets out the amounts of tax, penalties, and interest the Comptroller believes are due. The taxpayer may challenge the determination by filing a petition for redetermination with the Comptroller. This petition must be filed before the expiration of 60 days after the date the notice of determination is issued, or the right to redetermination is barred and the determination becomes final.

Jeopardy determinations have a shorter deadline. When the Comptroller makes a jeopardy determination—meaning the Comptroller believes there is a risk the state will not be paid—the taxpayer must file a petition for redetermination within 20 days after the date the notice is issued, not 60 days. The jeopardy determination becomes due and payable immediately upon issuance of the notice.

The petition for redetermination must be a written request for a redetermination hearing and must include a statement of grounds explaining why the deficiency determination is wrong. The statement of grounds must identify the contested items or state general contentions that identify categories of contested items, along with the factual basis and legal grounds supporting the taxpayer's position. If the petition requests a hearing, the taxpayer is entitled to a hearing and to receive notice of the hearing at least 20 days in advance.

Filing a timely petition for redetermination stays collection during the administrative process. The taxpayer does not have to pay the tax, penalties, or interest assessed by the Comptroller unless and until the dispute over the deficiency determination is resolved against the taxpayer. If the taxpayer does not pay the amount by the date specified for submitting a petition for redetermination (the 60-day or 20-day deadline), a 10% penalty is automatically assessed once the determination becomes final.

Source: Tex. Tax Code § 111.008 Source: Tex. Tax Code § 111.009 Source: Tex. Tax Code § 111.0081

After a taxpayer files a timely petition for redetermination under Tex. Tax Code § 111.009, the Texas Comptroller first conducts an internal review, giving the taxpayer an opportunity to provide additional information and attempt to resolve the dispute. If this in-house review is unsuccessful, the Comptroller transfers the case to the State Office of Administrative Hearings (SOAH) for a contested case hearing before an administrative law judge (ALJ).

SOAH is an independent state agency that conducts administrative hearings for more than 50 Texas agencies, including tax redetermination hearings for the Comptroller. At SOAH, an ALJ holds a hearing at which the taxpayer and the Comptroller's Tax Division present evidence, examine witnesses, and make legal arguments. The hearing is conducted under the Administrative Procedure Act and the Texas Rules of Evidence apply. Most SOAH hearings are now conducted remotely by videoconference (typically Zoom), though in-person hearings may be requested for good cause.

After the hearing, the ALJ issues a Proposal for Decision (PFD), which includes findings of fact and conclusions of law. Critically, the ALJ's PFD is not binding on the Comptroller. Under Texas law, the Comptroller retains ultimate decision-making authority. Both parties may file exceptions and replies to the PFD with SOAH, and SOAH serves these on the parties. The Comptroller then issues a final decision on the redetermination, which may adopt, modify, or reject the ALJ's proposal.

The Comptroller's decision becomes final under Tex. Gov't Code ch. 2001 (the Administrative Procedure Act) unless the taxpayer files a motion for rehearing within the time permitted by that chapter. A motion for rehearing must state the specific grounds of error and the disputed amounts associated with those grounds. An order denying the motion for rehearing is deemed a final order that may be appealed.

Judicial review in Travis County District Court. A taxpayer dissatisfied with the Comptroller's final decision may file suit in Travis County District Court under Tex. Tax Code ch. 112, subchapter E (Suit After Redetermination). Section 112.001 grants the Travis County district courts exclusive, original jurisdiction over taxpayer suits challenging state tax determinations. To bring suit under § 112.201, the taxpayer must have: (1) filed a request for redetermination under ch. 111; (2) obtained a redetermination under ch. 111 that includes a finding by the Comptroller of the disputed and undisputed amounts; and (3) filed a motion for rehearing that complies with ch. 2001 and states the specific grounds of error and disputed amounts. The taxpayer must pay the undisputed redetermination amounts before filing suit, though failure to pay does not affect the court's jurisdiction. The suit is tried de novo—meaning the court conducts a new trial on the merits—and only the issues raised in the motion for rehearing may be litigated.

Source: Tex. Tax Code § 111.009 Source: Tex. Tax Code ch. 112 Source: SOAH website

Statute of limitations on assessments. Under 34 Tex. Admin. Code § 3.339(b)(1), the Texas Comptroller has four years from the date a sales or use tax becomes due and payable to assess a deficiency tax liability. The "due and payable" date generally means the day after the last day on which a payment is required by the chapter imposing the tax. For example, for a monthly sales tax return due on the 20th of the month following the reporting period, the tax becomes due and payable on the 20th, and the four-year assessment period begins the following day.

Exceptions—no statute of limitations. The four-year limitation does not apply, and the Comptroller may assess and collect taxes, penalties, and interest at any time if:

• The taxpayer files a false or fraudulent sales tax return with the intent to evade the tax;
• The taxpayer fails to file a sales tax return; or
• The taxpayer files a sales tax return that has a gross error, defined as an error resulting in the amount of tax due and payable (after correction of the error) exceeding the amount of tax reported on the return by at least 25%.

In these three situations, the Comptroller's authority to assess is not time-barred.

Extension by agreement. The Comptroller and a taxpayer may agree in writing to extend the statute of limitations before it expires, in accordance with Tex. Tax Code § 111.203. The agreement must state the reasons for the extension. No single extension may exceed 24 months from the expiration date of the period being extended. Any assessment for periods covered by the extension must be made before the extension agreement expires.

Statute of limitations on refund claims. A refund claim must be filed before the expiration of the later of: (1) four years after the date on which the tax was due and payable, or (2) six months after the date on which a deficiency determination for the periods becomes final. This rule is codified in 34 Tex. Admin. Code § 3.325(b)(4) and Tex. Tax Code § 111.104(c)(3). Failure to file a refund claim within these time limits constitutes a waiver of any demand against the state on account of the overpayment. The informal review of a refund claim by the Comptroller does not toll (suspend) the limitation period for any subsequent claim for refund on the same period and tax type.

Source: 34 Tex. Admin. Code § 3.339 Source: 34 Tex. Admin. Code § 3.325 Source: Tex. Tax Code § 111.104 Source: Tex. Tax Code § 111.203

Voluntary Disclosure Agreement (VDA) program. The Texas Comptroller administers a voluntary disclosure program for taxpayers that have not previously registered for Texas sales and use tax and wish to come into compliance. The program is designed to encourage taxpayers with nexus in Texas to voluntarily register and report prior-period tax liabilities. Taxpayers participating in the voluntary disclosure program typically receive relief from certain penalties and a limitation on the look-back period for which tax is assessed, though interest generally remains due on unpaid tax.

Unable to confirm as of 2026-05-28 the specific look-back period, penalty waiver scope, and whether anonymous filings are permitted under the current Texas VDA program.

Private letter rulings. Texas Tax Code § 111.002 authorizes the Comptroller to adopt rules for the administration and enforcement of the tax code. Under this authority, the Comptroller issues private letter rulings in response to written requests from taxpayers seeking guidance on how a specific statute or rule applies to the taxpayer's particular fact situation. A private letter ruling is binding on the Comptroller with respect to the taxpayer to whom it is issued, for the specific facts and time period addressed in the ruling, unless the ruling is later modified or revoked by the Comptroller or a court.

Taxpayers may request a letter ruling by submitting a written request to the Comptroller's Tax Policy Division. The request must include a complete statement of facts, the specific issue or question for which guidance is sought, the taxpayer's analysis of the applicable law, and any other information the Comptroller may require. The Comptroller is not required to issue a ruling and may decline to rule on certain issues, particularly where the issue is the subject of pending litigation or administrative proceedings, or where the facts are hypothetical rather than specific to the taxpayer's actual circumstances.

Private letter rulings are published on the Comptroller's STAR (State Automated Tax Research) database, typically with taxpayer-identifying information redacted. While a private letter ruling is binding only on the taxpayer to whom it is issued, published rulings provide guidance to other taxpayers on the Comptroller's interpretation of the law. The Comptroller may also issue policy letters and other publications that provide general guidance on sales and use tax matters; these publications do not have the same binding effect as a private letter ruling issued to a specific taxpayer.

Source: Tex. Tax Code § 111.002 Source: STAR database