Texas Sales and Use Tax and Filing Dates
Texas first adopted its sales tax in 1961, and later on, in 1967, municipalities enacted their sales tax. Businesses must collect the sales tax at the point of sale, and remit it to the state.
In that regard, the merchant acts as a tax agent for the state of Texas. At the time of writing this article, the Texas Comptroller of Public Accounts is responsible for administering the state of Texas taxes.
Texas’s Sales, Use Tax, and Exemptions
- Tax Exempted Goods and Services
- How the Texas Sales and Use Tax is Calculated
- Texas Due Dates for Taxes
- The Due Date for Quarterly Filers
- Monthly and Yearly Filers
- Tax Discounts
Tax Exempted Goods and Services
Not all goods and services are taxable. If goods are bought for resale, then they are tax exempted. The reseller will only collect tax, during the final sale of those goods to the consumer.
Goods bought by exempt organizations aren’t taxed either. Such organizations include government agencies, schools, nonprofits, or schools. In select cases, goods bought remotely via mail order, phone, or online aren’t taxed.
Other special goods that aren’t taxed in Texas include non-prepared food items, medical suppliers, and food stamps. To get the exact list of exempted items, you can check the Texas Comptroller of Public Accounts rules and laws.
Businesses are required to pay taxes for goods bought remotely if the business has an economic or virtual connection to the state of Texas. This came into effect after the 2018’s South Dakota v. Wayfair, Inc. ruling by the Supreme Court.
However, a consumer may be required to pay a use tax, if they bought goods outside of the country, but used or consumed them in Texas. In such cases, the burden of determining tax is owed to the state shifts to the customer.
How the Texas Sales and Use Tax is Calculated
The Texas base tax rate is 6.25%, and it is applied to all taxable goods, leases, rentals, and services. Local governments can add their taxes with an upper limit of 2%. In total, the maximum sales and use tax in Texas come to 8.25%.
The Texas Comptroller of Public Accounts provides businesses with a tax calculator, which they can use to calculate their state taxes. Businesses and residents can use it to search for a sales tax rate by using their addresses.
Texas Due Dates for Taxes
The due date for filing taxes varies, depending on whether you are required to file the state tax on a quarterly or monthly basis. If the due date is a holiday, then filing must be done on the next business day.
The Due Date for Quarterly Filers
- January to March, the report by April 20
- April to June, the report by April 20
- July to September, the report by April 20
- October to December, the report by April 20
Monthly and Yearly Filers
And for the monthly filers, the reports are due on the 20th of the next month. For instance, sales made in January are filed on 20 February. Similarly, for yearly filers, sales made the previous year are filed on January 20, the next year.
To encourage early filing, Texas gives discounts for up to 1.75% of the tax due. That’s 0.5% for early filing and 1.25% for prepaying the tax due.
Other useful articles:
- Sales Tax by State in the United States
- How to Verify Tax Exempt Certificate
- Verify Tax Exempt Resale Certificate by State
- What is a Tax Exempt Status
- VAT Taxes in Europe
- Sales Tax Thresholds by State
- Sales Tax in California
- Sales Tax in Florida
- Sales and Use Tax in New York
- Texas Sales and Use Tax and Filing Dates