taxes

Texas Sales and Use Tax Frequently Asked Questions

Keeping Records

Am I required to keep business records?

If you are either:

  • a seller of taxable items, or
  • a purchaser who stores, uses or consumes taxable items in Texas

you are required to keep business records so that an authorized representative from the Comptroller's office can verify the accuracy of your sales and use tax returns. Failure to keep or provide records can result in the Comptroller’s office taking various actions, including an estimation of tax liability or a suspension of the sales tax permit issued to the business.

What type of records are required?

Records must reflect the total gross receipts from all sales, rentals, leases, taxable services and taxable labor, and the total purchases of taxable items. Additional records must be kept to substantiate any claimed deductions or exclusions.

How long do I keep my business records?

You must keep sales and use tax records for at least four years unless the Comptroller gives written authorization for earlier destruction. This applies to all records that pertain to transactions involving sales or use tax liability. In addition, if the Comptroller is auditing your records, you should retain all records for the period being audited until the audit is completed (if you appeal the findings or file a claim for refund, retain your records until your case is resolved).

Keep resale or exemption certificates you have accepted as your proof as to why you did not collect tax on a particular sale. If you do not keep these records, these sales will be presumed taxable in an audit.