Texas Sales and Use Tax
Frequently Asked Questions
Browse Questions by Topic
- Obtaining a Sales Tax Permit
- Sales Tax Collection
- Reporting and Remittance
- Purchases/Use Tax
- Buying, Selling, or Discontinuing a Business
- Resale Certificates
- Exemption Certificates/Exempt Organizations
- Shipped out of Texas/Exports
- Keeping Records
- Sales Tax Holiday
- Electronic Cigarettes and Cigarettes
Other Tax-related FAQs
Obtaining a Sales Tax Permit
- Who is required to hold a Texas sales and use tax permit?
- What is tangible personal property?
- What is engaged in business?
- How do I get a sales tax permit number?
- Is there a fee charged for a sales tax permit?
- If my business doesn't have a federal identification number yet, can I still apply for a sales tax permit?
- Do I need more than one permit?
- Can I use the sales tax permit number from my old business or from an existing business that I purchased?
- If the ownership of my business changes, is a new permit needed?
- If I am no longer in business, can I keep my seller's permit?
- Should I tell the Comptroller's office if I change my business address or mailing address?
- Am I required to register to pay other taxes?
- Are my business records subject to audit?
- Once I have obtained a sales tax permit, what are my obligations as a permit holder?
Sales Tax Collection
- What is taxable?
- How much sales tax do I collect from my customers?
- What tax rate do I use?
- Am I required to separately state the sales tax amount to my customers?
- Is rounding permitted when computing sales tax?
- If I do not collect the sales tax or collect an incorrect amount, who is responsible for paying sales tax to the Comptroller's office?
- Are barters and exchanges taxable?
- Are delivery or shipping charges taxable?
- Where can I get more information?
Reporting and Remittance
- What is a sales and use tax return?
- When do I file the tax return form?
- If I cannot file my return or pay the tax on time, can I request an extension?
- What happens if I file a late tax return or my tax payment is overdue?
- If I don't owe taxes, do I still file a return?
- How do I pay the taxes that are due?
- What happens if I do not file a tax return?
- What are prepayment discounts?
- What are vendor's discounts?
- If a customer pays after the tax reporting period, or pays in installments, when is the tax due?
- What if I made a mistake on my return and need to make changes?
Buying, Selling, or Discontinuing a Business
- Why are resale certificates required?
- What can I buy tax free by issuing a resale certificate under my taxpayer number?
- What are my responsibilities as a buyer using a resale certificate?
- Do I need to submit a resale certificate each time I make a purchase?
- What are my responsibilities as a seller accepting a resale certificate?
- Can I find out if a seller's permit number is current?
- Can I issue a resale certificate if I buy items that will be resold in Mexico or another country?
- Are there any penalties for the illegal use of a resale certificate?
Exemption Certificates/Exempt Organizations
- Why are exemption certificates required?
- Does an exemption certificate have to have a number to be valid?
- Who qualifies as a purchaser exempt from sales tax?
- Is there any way I can verify whether an organization is an exempt organization?
- How can I apply to be exempt from sales tax?
- What are exempt uses?
Shipped out of Texas/Exports
Sales Tax Holiday
- Your sales tax holiday publication states “Texas shoppers get a break from state and local sales and use taxes…” Could you clarify who qualifies as a “Texas shopper?” For example, do shoppers from other states or countries qualify for the exemption?
- Do purchasers need to provide an exemption certificate or any other documentation to claim this exemption?
- Do all sellers located in Texas have to participate in this event?
- Can I rent a tuxedo for my wedding tax-free during the holiday?
- Can a purchaser receive a refund of sales and use taxes paid on purchases of qualifying items that were made before the sales tax holiday?
- Can pre-packaged combination sets or kits that contain items qualifying for exemption during the sales tax holiday and items that do not qualify for the exemption be sold tax-free during the holiday? For example, I sell pre-packaged school supply kits. The kits contain qualifying items such as pencils, paper, crayons and glue, but also contain items such as plastic baggies and tissues that do not qualify. Can I sell the pre-packaged kits tax-free during the sales tax holiday?
- Do special orders qualify for the sales tax holiday? My customers place an order and make a down payment or deposit when placing the order, but the merchandise may not be ready for pick up for several weeks. I have read that the sales tax holiday provides for layaway purchases, but does it also apply to the special or custom orders of eligible items placed during the holiday period?
- I've noticed some school supplies that my children's school requires are not on the list of school supplies qualifying for the sales tax holiday. Why?
- Do delivery or shipping and handling charges qualify for the exemption?
- How do you address transportation charges when shipping both taxable and exempted items in one shipment?
- What happens if the total sales price of an item is $100 or more when the transportation charges are added?
Electronic Cigarettes and Cigarettes
- What are E-cigarettes?
- Are E-cigarettes subject to the cigarette tax?
- Are electronic cigarettes (also known as E-cigarettes, personal vaporizers (PVs), or electronic nicotine delivery systems (ENDS)) subject to Texas Sales and Use Tax?
- What if the E-Cigarette contains nicotine? Is it then subject to the cigarette tax?
- Are cigarettes subject to both the sales and use tax and the cigarette tax?