The state sales and use tax rate is 6.25 percent, but local taxing jurisdictions (cities, counties, special purpose districts, transit authorities) may also impose sales and use taxes up to a combined 2 percent, for a maximum combined total rate of 8.25 percent, state and local. Refer to Guidelines for Collecting Local Sales and Use Tax (PDF) for additional information on local sales and use tax administration.
Criminal offenses involving the sales and use tax include both felonies and misdemeanors. Conduct punishable as a felony includes:
Failure to Remit Taxes Collected
Intentionally or knowingly failing to remit sales taxes collected when the unremitted amount is $1,500 or more may be prosecuted as a first-degree felony if the amount (either individually or in the aggregate) equals or exceeds $200,000 (Tax Code, Section 151.7032). (Cases involving unremitted amounts less than $1,500 are misdemeanors.)
Intentionally or knowingly committing various fraudulent acts with respect to books and records required to be made or kept by law may be prosecuted up to a third-degree felony (Tax Code, Sec. 151.7102).
In 2007, the Legislature passed House Bill 11 dramatically expanding the Comptroller's ability to identify, audit and, when appropriate, prosecute tobacco and liquor retailers who collect sales taxes but do not remit the proper amounts to the state. Largely through enhanced electronic reporting requirements, since fiscal 2009 the Comptroller has identified more than $665 million due the state through fiscal 2015.
Enacted in 2007 by the 80th Legislature, HB 11 dramatically increased the Comptroller’s ability to identify, audit and, when appropriate, prosecute retailers who are collecting sales taxes on certain purchases but not remitting the proper amounts to the state.
HB 11 amended the Alcoholic Beverage and Tax codes to require distributors and wholesalers who sell ale, beer, wine, cigarettes, cigars and tobacco products to Texas retailers to report those sales monthly to the Comptroller’s office. These distributors and wholesalers must also report that data electronically, unless they demonstrate the inability to do so.
HB 11 data, which have now been collected since January 2008, allow the Comptroller to compare the wholesale purchases that retailers have made of these products with the sales that they are required to report. Because both datasets mostly are received electronically, discrepancies can be more easily and rapidly identified. Rapid identification is essential so that the Comptroller's auditors can begin working to mitigate losses and recoup any revenue owed the state. Since fiscal 2009, the Comptroller's office has identified more than $665 million due the state from alcohol and tobacco sales (through fiscal 2015).
In some cases, audit documentation may suggest that the taxpayer had criminal intent to evade taxes. If so, the Criminal Investigations Division reviews and evaluates the case for the possible filing of criminal charges.
Sales tax permits may be suspended or revoked, and former permitholders may be denied new permits if the Comptroller is not satisfied that the holder will comply with the sales tax statutes or Comptroller rules in the future. (Tax Code, Sections 151.203 and 151.204)
Sales tax cases are prosecuted in the counties in which any element of the offense occurs.