taxes

Use Tax

Who is responsible for this tax?

Anyone who buys taxable goods and services that are stored, used or consumed in Texas from a seller who does not charge Texas sales tax owes Texas use tax.

Most Texas sellers collect sales tax and remit it to the Comptroller’s office. But when you buy items online or by telephone, email or fax from mail order catalogs, the seller may not, and may not be required to, collect Texas sales tax. If you buy the item for use in Texas, you owe Texas use tax.

For example, if you buy a shirt through an online auction from a seller in Ohio who does not charge Texas sales tax, or if a New York electronics store sells you a camera through its website and does not charge Texas sales tax, you owe Texas use tax on the price of the item.

Items bought in another country are also subject to Texas use tax. For example, if you buy something in Mexico that you bring back to Texas, you owe use tax on the purchase price.

Sometimes use tax is due even when you buy an item in Texas. If you buy an item in a part of Texas with no local taxes, you will pay state sales tax (6.25 percent) on that purchase. But if you use the item in an area that imposes a local tax, you owe that local use tax.

EXAMPLE: You live in Houston, have travelled to an area with no local tax and buy an item for $200 from a seller in that area. The seller only charges state sales tax of $12.50, or 6.25 percent. Since the use tax rate in Houston is 8.25 percent, you owe the 2 percent local use tax of $4.00.

Credit for Tax Already Paid

Texas allows a credit for sales or use tax paid to other states. For more information, see Rule 3.346.

Need Assistance Determining the Sales Tax Rate?

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Rate

The state use tax rate is 6.25 percent. Depending on where you use, store, or consume the item, you may owe up to an additional 2 percent in local use taxes.

Due Date

If you have a Texas sales tax permit, report the use tax on your Texas Sales and Use Tax Return in Item 3, Taxable Purchases, on your next regularly scheduled due date.

If you don't have a Texas sales tax permit, file the use tax due on Form 01-156, Texas Use Tax Return (PDF). Form 01-156 is due no later than January 20 of the year following the year in which you bought the item, as long as the amount of tax to be paid on your untaxed purchases during a calendar year does not exceed $1,000. For example, if on October 12, 2005 you buy just one item during the current calendar year that is subject to use tax, and owe $8.25 in use tax, you can file Form 01-156 and pay the tax any time through January 20 of the following year.

A non-permitted, out-of-state company that uses Form 01-156 should include its Texas address. If the out-of-state company does not have a Texas address, complete Form AP-201, Texas Application (PDF).

Additional Resources

Sales and Use Tax Information