taxes

Auditing Fundamentals

Appendix

Tax Chart

Sales and Use Taxes:
Tax/Fund Tax Code Statute Reference Tax Rate Origination Date of Tax
State 26 Texas Tax Code, Chapter 151 6.25% September 1, 1961
Direct Pay 27 Texas Tax Code, Chapter 151 6.25% September 1, 1961
Maquiladora 28 Texas Tax Code, Chapter 151 6.25% June 14, 1989
City 26 Texas Tax Code, Chapter 321 1% - 2% January 1, 1968
MTA 26 Texas Tax Code, Chapter 322
San Antonio MTA: 1/2% January 1, 1978
Houston MTA: 1% October 1, 1978
Dallas MT A: 1% January 1, 1984
Fort Worth MTA: 1/2% April 1, 1984
Austin MTA : 1% July 1, 1985
CTD 26 Texas Tax Code, Chapter 322 El Paso CTD: 1/2% April 1, 1988
Laredo CTD: 1/4% July 1, 1991
CTA 26 Texas Tax Code, Chapter 322 El Paso CTD: 1/2% April 1, 1988
Laredo CTD: 1/4% July 1, 1991
ATD 26 Texas Tax Code, Chapter 322 San Antonio ATD: 1/4% April 1, 2005
County 26 Texas Tax Code, Chapter 323 1/2% - 1 1/2% January 1, 1987
SPD 26 Various 1/8% - 2% January 1, 1991
Interest Earned on
Financed Sales Tax
48 Texas Tax Code, Chapter 151.428 See State Sales & Use Tax Rule 3.302(f) September 1, 1989
Texas Emissions Reduction
Plan Surcharge
50 09/01/2001 - 06/30/2003: 1%
07/01/2003 - Present: 2%
September 1, 2001
Notes:
  1. Due date for all the sales taxes is: 20th of the month. If the 20th is a weekend or holiday, the due date is the next working day.
  2. Discount for timely filing: 1/2%
  3. Late returns are assessed a 5% penalty for 1-30 days late, and an additional 5% if over 30 days late. Minimum penalty is $1 per period. Interest is assessed beginning 61 days after the due date. Interest rate varies annually, set at one percent over the prime rate as published in the Wall Street Journal on the first business day of the year.
  4. Refund claims filed by a taxpayer on or after September 1, 2005 will accrue credit interest at either the Treasury Pool rate or Prime +1%, whichever is less. For refund claims filed prior to September 1, 2005, credit interest will accrue at Prime + 1%.
  5. For credits due on audits, if the entrance conference is prior to September 1, 2005, the credit interest rate will accrue at the Prime plus 1%: if the entrance conference is on or after September 1, 2005, credit interest accrues at either the Treasury Pool rate or Prime + 1%, whichever is less.
  6. For a complete listing of all the cities, counties, SPDs, or Transits and their applicable tax rates, please see Publication #96-132 - Texas Sales and Use Tax Rates
  7. The Texas Emissions Reduction Plan Surcharge is due on the sale, lease, or rental price heavy-duty, of off-road diesel-powered equipment. The surcharge is in addition to the sales & use tax due; however, if the sale, lease, or rental of the equipment is not subject to sales tax, the surcharge is not due.
Franchise Taxes:
Tax/Fund Tax Code Statute Reference Tax Rate
Franchise
Bank Franchise
13
16
171.001
171.001
.25% of net taxable capital or 4.5% of net taxable earned surplus - no minimum tax

Corporations owing less than $100 are not required to pay, but must file a report

Due Date: Annual Reports - May 15th of each year
Motor Fuels Taxes:
Tax/Fund Tax Code Statute Reference Tax Rate
Gasoline 90 - 06 153.101 Regular: 20¢/gallon
Diesel Fuel 90 - 07 153.201 Regular: 20¢/gallon
Liquefied Gas 90 - 08 153.301 All: 15¢/gallon
International Fuel Tax Agreement (IFTA) 56 162.001 Set by each member jurisdiction

Notes:

  1. Gasoline - due date: 25th of month following end of previous month for distributors, and the 25th of month following the end of the quarter for interstate truckers, or 25th of January for the previous year if annual filer
  2. Gasoline - discount: 2% of taxable gallons for distributors. 1/2% of taxable gallons for interstate truckers. Timely filing is not required for discount.
  3. Liquefied Gas - due date: 25th of January after each calendar year
  4. Liquefied Gas - discount: A permitted dealer retains 1% of the tax on the taxable gallons and an interstate trucker is entitled to 1/2% of the tax on the taxable gallons
  5. Diesel Fuel - due date: 25th of month following end of previous month for suppliers and 25th of month following end of quarter for interstate truckers and bonded users. Certain bonded users and interstate truckers may report annually.
  6. Diesel Fuel - discount: 2% of taxable gallons for suppliers. 1/2% of taxable gallons for interstate truckers and bonded users.
  7. IFTA is reported quarterly by the last day of the month following the end of the calendar quarter. Interstate carriers based in Texas report fuel tax paid in all member jurisdictions.
Minerals Taxes:
Tax/Fund Tax Code Statute Reference Tax Rate
Crude Oil Production 10 202.001 4.6% of value per barrel of 42 standard gallons

Discounts: N/A

Due date: 25th of first month after production
Natural Gas Production 11 201.001 7.5% of market value of gas produced and saved in Texas

Discounts: N/A

Due date: 20th of 2nd month after production
Miscellaneous Occupation Tax
(Oil & Gas Well Servicing)
19 191.081 2.42% of the receipts for the services performed

Due date: 20th of month following the end of each calendar month

Discounts: N/A
Sulphur Production 20 203.001 $1.03 per long ton (2240 lbs.) or fraction thereof of sulphur produced in Texas

Due Date: Last day of the month after each calendar quarter

Discounts: N/A
Oil Regulatory Tax 21 81.111(E)
Nat. Res.Code
$0.001875 per barrel (42 standard gallons) of oil

Due Date: 25th of the month following production

Discounts: N/A
Cement Production 22 181.001 $0.55 per ton (2000 lbs.)

Due date: 25th of month for business conducted in previous month

Discounts: N/A
Coastal Protection Fee 66 40.155a
Nat. Res.Code
2¢ per barrel (42 standard gallons) of crude oil

Due Date: Last day of the month for the previous month

Discounts: N/A

Notes:

  1. Crude Oil Production
    • Producers who do not pay the production tax are required to file only an annual report, which is due on or before March 1st of each year. All others are required to file monthly returns.
    • Special lower tax rates apply for wells located in new or expanded enhanced recover sites. Please consult Sections 202.056 and 202.059 of the Oil Production Tax Statute for those rates.
  2. Natural Gas Production - producers who have an average monthly tax liability of less than $200 must file an annual producer's report, which is due on or before February 20 of each year. If the producer's cumulative annual liability exceeds $2,400 at any time during the year, he is required to begin filing monthly returns at that time. Natural gas classified as high-cost natural gas is exempt from the gas production tax.
Hotel Taxes:
Tax/Fund Tax Code Statute Reference Tax Rate
Hotel Occupancy 75 156.001 6%

Due Date: 20th of the month

Discount: 1% for timely filing

Only state taxes are administered by the Comptroller

Motor Vehicle Taxes:
Tax/Fund Tax Code Statute Reference Tax Rate
Motor Vehicle
Sales and Use
89 152 6.25%

Due date: 20 working days after delivery of vehicle in Texas

Discount: N/A
Motor Vehicle
Gross Rental Receipts
15 152 Rentals for 30 days or less are taxed at 10%. Rentals for more than 30 days are taxed at 6.25%

Due date: Monthly, Quarterly or Yearly : 20th of the month following end of reporting period

Discount: ½% for timely filing
Motor Vehicle
Seller-Financed
Sales Tax
70 152 6.25%

Due Date: Monthly or Quarterly: 20th of the month following end of reporting period

Discount: ½% for timely filing
Motor Vehicle Sales and
Use (County Tax Assessor)
14 152 6.25%
Notes:
  1. Motor Vehicle Gross Rental Receipts - there is an additional 1.25% discount of the estimated tax if a prepayment is filed by the 15th of second month of quarter.
  2. Motor Vehicle Sales & Use (County Tax Assessor) - County Tax Assessor-Collector must report all tax and penalties collected, less a 5% commission. Due date: deposits are due either the 10th of the month, or weekly, or daily, depending on the volume of taxes collected. Penalty and interest is not assessed on any audit deficiency.
Miscellaneous Taxes:
Tax/Fund Tax Code Statute Reference Tax Rate
Misc. Gross Receipts (Utility Co) 23 182.021 Tax rate is dependent upon the population of the incorporated city
  • .00581 of gross receipts if population is 1,001 to 2,499
  • .0107 of gross receipts if population is 2,500 to 9,999
  • .01997 of gross receipts if population is over 9,999
Due Date: Quarterly: Last day of the month following the end of the quarter

Discount: N/A
Public Utility Commission
Gross Receipts Assessment
47 Chapter 16 of Utilities Code .1667% of gross receipts of electric and telephone utilities

                    Assessment Period:             Due Date:
                    July, Aug, Sept                Nov. 15
                    Oct, Nov, Dec                  Feb. 15
                    Jan, Feb, Mar                  May 15
                    April, May, June               Aug. 15
                    Annual (July of prior year     Aug. 15
                    - June of current year)
Local Revenue Funds (City)
(County)
32 V.T.C.A.
V.T.C.A.
See the Local Revenue Funds Manual for a description of the applicable funds, due dates, and fund amounts.
Inheritance 17 211.001 Per Federal Tax Tables.
Due Date: 9 months after date of death.
Discount: N/A
No Texas Inheritance Tax return is required on dates of death on or after January 1, 2005
Pari-Mutuel Wagering:
Tax/Fund Tax Code Statute Reference Tax Rate
Horse Racing 61 Art. 179e.
Texas Racing Act
Live Racing Pools
1% : $100 million but less than $200 million
2% : $200 million but less than $300 million
3% : $300 million but less than $400 million
4% : $400 million but less than $500 million
5% : in excess of $500 million

Tax is due by the end of the next business day following a race performance

Simulcasting Pools
1% due by the end of the next business day following a race performance
Greyhound Racing 62 Art. 179e.
Texas Racing Act
Live Racing Pools
1% : $100 million but less than $200 million
2% : $200 million but less than $300 million
3% : $300 million but less than $400 million
4% : $400 million but less than $500 million
5% : in excess of $500 million

Tax is due by the end of the next business day following a race performance

Simulcasting Pools
1% due by end of the next business day following a race performance
Petroleum Product Delivery Fee:
Tax/Fund Tax Code Statute Reference Tax Rate
Petroleum Product Delivery Fee 64 Texas Water Code,
Section 26.3574
Bracket system based on the number of gallons delivered.

Due Date: 25th of the month following the withdrawal and delivery

Discount: None
Controlled Substance Tax:
Tax/Fund Tax Code Statute Reference Tax Rate
Controlled Substance 65 Texas Tax Code, Chapter 159 $200.00 per gram of a controlled substance, counterfeit substance, or a mixture of marihuana and another taxable substance

$3.50 per gram of marihuana

$2,000.00 per fifty dosage units of controlled substances not sold by weight

Due Date: Immediately
Battery Sales Fee
Tax/Fund Tax Code Statute Reference Tax Rate
Battery Sales Fee (lead-acid batteries) 67 361.131-361.140
Health & Safety Code
$2.00 for each battery > 6 volts and < 12 volts
$3.00 for each battery 12 volts or more

Discounts: >$.025 credit per battery sold.

Due Date: 20th day of month following report period. Reporting periods are monthly or quarterly.
Automotive Oil Sales:
Tax/Fund Tax Code Statute Reference Tax Rate
Automotive Oil Sales 69 371.001-371.062
Health & Safety Code
1¢ for each quart on first importation into Texas

Discount: 1% credit of fee due

Due Date: 25th day of month following end of quarter
Cigar and Cigarette:
Tax/Fund Tax Code Statute Reference Tax Rate
Cigarette Distributor
and
Cigarette Manufacturer
88-31

88-84
Chapter 154 $20.50 per thousand on cigarettes weighing three pounds or less per thousand

$22.60 per thousand on cigarettes weighing more than three pounds per thousand
Cigars: Tobacco Distributor
and
Tobacco Manufacturer
88-18

88-85
Chapter 155
  • $1.00 per thousand
  • $7.50 per thousand
  • $11.00 per thousand
  • $15.00 per thousand
Rate determined by weight of cigars per 1000

Discounts: Cigarettes - 3% on purchases of tax stamps
Cigars - N/A

Due Dates: Cigarettes - 15th of the month
Cigars - 30th of the month
Insurance Taxes:
Tax/Fund Tax Code Statute Reference Tax Rate
Insurance Premium 71 Texas Insurance Code Tax rates vary depending on type of insurance: life, accident & health, HMO's property, and casualty or title insurance - if obtained from insurers licensed by the Texas Department of Insurance

If independently procured by a policyholder domiciled or headquartered in Texas on risks located in Texas from insurers not licensed in Texas: 4.85% of taxable premiums - assessed on the policyholder
Insurance Maintenance 72 Texas Insurance Code Tax rates vary depending on the lines of insurance written: life, accident & health, motor vehicle, casualty and fidelity, title, HMOs, worker's compensation, third-party administrators, and prepaid legal

Discounts: N/A

Due Dates: March 1 of the year following the issuance of insurance coverage - insurers licensed by the Texas Department of Insurance

May 15th of the year following the issuance of insurance coverage - due by policyholder from insurance independently procured from non-licensed insurers
Mixed Beverage Gross Receipts Tax:
Tax/Fund Tax Code Statute Reference Tax Rate
Mixed Beverage Gross Receipts Tax 73 Chapter 183 14% of gross receipts

Discounts: N/A

Due Date: 20th of the month following the end of each calendar month
Boat & Boat Motor Sales & Use 60 160.001 6.25%

Due Date: Within 20 working days from date of purchase or when boat or motor first brought into Texas

Discount: N/A
Manufactured Housing Sales & Use 46 158.001 5% of 65% of manufacturer's sales price

Due Date: Monthly: Last day of the month following each calendar month

Discount: N/A
Fireworks Sales Tax 30 161.001 2% - in addition to the sales tax

Due Date: Twice a year - February 20th and August 20th

Discount: N/A
Notes:
  1. Boat & Boat Motor Sales & Use Tax is paid to either the local County Tax Assessor-Collector or the Texas Parks & Wildlife Department
  2. The mixed beverage tax is imposed on the person or organization holding the mixed beverage permit and not the customer. It may not be added to the selling price as a separate charge and may not be backed out from the amount received.

Reasons for Assignment

  • Additional Info Supplied by TP
  • Admin. Tax Policy Change
  • Associated Insurance Group
  • Audit Lead Card
  • Audit Select Query
  • Bankruptcy
  • Certificate of No Tax Due (NTD) Request
  • Certificate Related Issue
  • External Source
  • Final Audit Request
  • Headquarters Select
  • Incorrect Tax Rate Charged
  • Informant Program
  • Lead from an Audit Assignment
  • No Tax Charged
  • Not Permitted
  • Operating from Open Register
  • Other - See Comment
  • Prior Productive Audit
  • Priority I Audit
  • Refund Request
  • Resale or Exempt. Certificates
  • Results of a Court Case
  • Results of a Hearing
  • ROP Project
  • Taxpayer Request/Complaint

Audit Flowchart Timelines

This flowchart is intended to show how an audit flows from the time the audit is generated, to the time when the audit is completed and leaves the audit office.

A detailed explanation of all the items in the flowchart is discussed in the various chapters of this manual.

flowchart

View alternate text for Audit Flowchart Timelines.

TOC | Preface | 1 | 2 | 3 | 4| 5 | 6 | 7 | 8 | 9 | 10 | Appendix | Glossary | Timelines

(Revised 06/2008)