taxes

Texas Sales and Use Tax Frequently Asked Questions

Obtaining a Sales Tax Permit

Who is required to hold a Texas sales and use tax permit?

You must obtain a Texas sales and use tax permit if you are an individual, partnership, corporation or other legal entity engaged in business in Texas and you:

  • sell tangible personal property in Texas;
  • lease or rent tangible personal property in Texas; or
  • sell taxable services in Texas.

See our publication Taxable Services (PDF) for more information.

There is no fee for the permit. However, based on your application, you could be required to post a security bond. For more information on security bonds, contact a Comptroller field office.

What is tangible personal property?

The legal definition for "tangible personal property" is "personal property that can be seen, weighed, measured, felt, or touched or that is perceptible to the senses."

What does it mean to be engaged in business?

A person or a retailer is engaged in business in Texas if any of the following apply:

  • maintains, occupies or uses an office, place of distribution, sales or sample room, warehouse or storage place, or other place of business;
  • has any representative, agent, salesperson, canvasser or solicitor who operates in this state under the authority of the seller to sell, deliver or take orders for any taxable items;
  • promotes a flea market, trade day or other event that involves sales of taxable items;
  • uses independent salespersons in direct sales of taxable items;
  • derives receipts from a rental or lease of tangible personal property that is located in this state;
  • allows a franchisee or licensee to operate under its trade name if the franchisee or licensee is required to collect Texas sales or use tax; or
  • conducts business in this state through employees, agents or independent contractors.
How do I get a permit?

You can apply for a sales tax permit using our Texas Online Sales Tax Registration Application System, or print an application from the Texas Sales and Use Tax Forms webpage and mail it to the Comptroller.

Once I have obtained a Texas sales and use tax permit, what are my obligations as a permit holder?

As a permit holder, you are required to

  • Post your permit at your place of business;
  • Collect sales tax on all taxable sales;
  • Pay sales and use tax on all taxable purchases;
  • Timely report and pay sales and use taxes; and
  • Keep adequate records.
If my business doesn't have a federal identification number yet, can I still apply for the sales and use tax permit?

Yes. If a business applies for a sales tax permit before obtaining a federal employer's identification number, the Comptroller’s office will issue a permit under a temporary number. When we receive the federal employer's identification number, we will then issue a new permit, based on the federal number upon request.

Do I need more than one permit?

Each seller must have a tax permit for each active place of business. A place of business is an established outlet, office or location that the seller, the seller's agent or employee operates to receive orders for taxable items. If you have multiple places of business, you will receive separate permits for each business location displaying the same taxpayer identification number, but with separate outlet numbers.

A warehouse, storage yard, or manufacturing plant is not a "place of business of the seller" for tax permit requirement purposes unless the seller receives three or more orders in a calendar year at the warehouse, storage yard or manufacturing plant.

Can I use the sales tax permit number from my old business or from an existing business that I purchased?

No. A permit is valid only for the person to whom it was issued and only for the business at the address shown on the permit. It cannot be transferred from one owner to another. See our FAQs on Buying, Selling, or Discontinuing a Business.

If the ownership of my business changes, is a new permit needed?

Yes. The new owner must obtain a permit if there are any changes in ownership of your business. A new permit is also needed if you incorporate a business or form a partnership or limited liability company, because this is considered a change of ownership. For example, if you operate a business as a sole proprietor, but decide to incorporate, the corporation will have to obtain a new permit for the business, even though you may operate the business as an officer of the corporation.

If I am no longer in business, can I keep my sales tax permit?

Your permit is valid only as long as you are actively engaged in business as a seller. If you are no longer conducting business, you should return your permit to the Comptroller for cancellation. Likewise, the Comptroller’s office may cancel your permit if it finds that you are no longer engaged in business as a seller.

Should I notify the Comptroller's office if I change my business address or mailing address?

Yes. Your current contact information must be accurate.

Use one of these methods to update your information:

Am I required to register to pay other taxes?

When you apply for a sales and use tax permit, we may be able to inform you of other taxes, licenses or fees for which your business might be responsible, but it’s your responsibility to determine what taxes, licenses, or fees (federal, state or local) your business must report and/or pay.

Are my business records subject to audit?

Yes. Your records may be audited to determine whether you have paid the correct amount of tax. The audit may determine that you owe tax, that you are entitled to a refund or that you have paid the correct amount. In general, you may be audited in four-year intervals; thus, you are required to keep records for a minimum of four years. See Keeping Records.

Why are you giving telemarketers my business telephone number?

The Comptroller’s office receives requests each week for a list of businesses that have been issued new sales tax permits. Our office is required by law to provide the requested public information, including the permittee’s telephone number. Please keep in mind:

  • We do not sell this information.
  • We are prohibited by law from asking a requestor what they plan to do with the information.
  • New sales tax permittees sometimes experience an influx of calls from vendors seeking to provide goods or services to the new taxpayers.
  • Taxpayers have reported that within a week or two of starting business, the unsolicited calls diminish.
  • The Comptroller’s office is committed to protecting your information; therefore, none of your confidential information is ever disclosed.