If you sell taxable items at a fair, festival, antique market, trade show, arts and crafts show, gun show or other type of market or show, you may be responsible for collecting and re-mitting Texas sales and use tax. Depending on your business structure, you may also be responsible for paying franchise tax.
A "seller" is a retailer, wholesaler, distributor, manufacturer or other person who sells, leases, rents or transfers ownership of taxable items or performs taxable services for consideration. "Consideration" is the total amount paid for a taxable item or taxable service before tax.
Sellers at these events, including sellers from outside Texas participating at these events, are engaged in business in Texas and must have a Texas Sales and Use Tax Permit if they
Event promoters (organizers) are sellers, too. They must collect and remit the sales tax on their sales, as well as sales made by individuals, dealers or salespersons at these events who do not have an active Texas Sales and Use Tax Permit and whose sales do not qualify for tax exemption. Examples of sales that qualify for tax exemption include sales made by sellers under
Complete the Texas Online Tax Registration Application to get a sales tax permit. You can also apply by mail or in person at one of our field offices in the state. Applications and in-formation on what you need to apply for a Texas sales tax permit are available on our website. There is no fee to apply for a permit. Please note that sellers who operate without a permit may face a penalty.
If the Texas Comptroller of Public Accounts finds or has reason to believe that a tax due is likely to become delinquent, the Comptroller’s office may require you to post a security bond. These security bonds are intended to secure future sales tax. For more information, see Rule 3.327, Taxpayer's Bond or Other Security.
You must collect sales or use tax on the total sales price of the taxable items you sell. Your receipt or invoice must separately show the tax or clearly indicate you included the tax in the sales price.
You will collect 6.25 percent state tax and up to 2 percent local tax on your taxable sales. If you sell at different events around Texas, you will collect tax based on the location of each event. Use our Tax Rate Locator to find the correct tax rate.
For more information, see Publication 94-105, Local Sales and Use Tax Collection – A Guide for Sellers (PDF).
If you have a sales tax permit, you can buy items tax free to resell as part of your business. You will give the seller a completed resale certificate, Form 01-339, Texas Sales and Use Tax Resale Certificate (PDF) (front), at the time of purchase.
If you sell a taxable item to someone who tells you they will resell the item, then you can accept a completed resale certificate (PDF) for your records.
Some nonprofit organizations can buy items tax free. If your customer is an exempt organization, you can accept a completed exemption certificate, Form 01-339, Texas Sales and Use Tax Exemption Certificate (PDF) (back), instead of collecting the tax. For more information, see Tax Exemptions for Qualified Organizations.
If you have a sales tax permit, you must file a Texas Sales and Use Tax Return with the Comptroller’s office, even if you have no sales or no tax to report. You will file a return monthly, quarterly or yearly based on how much tax you collect. You can file online, respond on the preprinted form you receive through the mail, or download the forms from our website.
Returns and payments are due by the 20th day of the month following the reporting period. For example, the return for the first quarter (January, February and March) is due April 20. A $50 late filing penalty is due on every return filed after the due date. The $50 penalty is in addition to any other penalties assessed for the reporting period.
When you file the return and pay the tax on time, you can take a timely filing discount equal to one-half percent of the tax you collected.
If you are an out-of-state seller engaged in business in Texas, even if operating here tem-porarily, you must have a Texas Sales and Use Tax Permit and collect and report all appli-cable taxes for local Texas taxing jurisdictions.
When you are no longer engaged in business in Texas, and you do not intend to make more sales or have new business here, you can close your sales tax permit.
Admission fees are taxable. The event promoter must collect sales tax on admission fees.
Booth fees, floor space fees and rental charges for a space to sell or display taxable items are not subject to sales tax.
Parking fees are taxable. The business operating the parking facility must collect sales tax on parking fees and must show the sales tax amount separately on the customer’s bill, or give the customer a written statement that sales tax is included in the sales price.
For malls and markets where sellers rent space to sell, buy or trade their wares, the method of collecting sales tax depends on the location of the cash register or checkout system.
Central cash register – If the market or mall has a central cash register or checkout, both the market and the individual sellers must have sales tax permits. The market or mall collects, reports and remits the sales tax. The market reports total sales, taxable sales and total tax collected for all sellers.
Sellers report only the amount the market sells on their behalf in the "Total Sales" field of the sales and use tax return. For example, a seller receives $400 from the market or mall for sales for the month. The seller would report the $400 as total sales, but would not include the $400 in taxable sales on the sales and use tax return since the market reported and submitted the tax on the taxable sales.
No central cash register – If the market or mall does not have a central cash register or checkout, both the market and the individual sellers must have sales tax permits and must collect and remit tax on their sales.
The market’s promoter can be liable for taxes on sales made by sellers without a permit, so the promoter must make sure that each seller has an active sales tax permit.
Sellers must report total sales, taxable sales and tax collected.
The market must report total sales, taxable sales and the tax it collected for any sellers oper-ating without a sales tax permit.
If you occasionally sell personal items, you may qualify for the "occasional sales" exemption. If you qualify, you do not need a sales tax permit and you do not collect tax on those sales.
There are two types of occasional sales exemptions. One exemption is based on how many items you sell during a certain period, and the other exemption is based on the dollar amount of your sales during a certain period.
You do not qualify for the occasional sale exemption if any of these conditions apply to you:
You can qualify for an occasional sales exemption if you meet either of these requirements:
Sales made by groups, such as student or church groups that collect items to sell at a garage sale, do not qualify for this type of occasional sale exemption; it applies only to individuals.
The occasional sale exemption does not apply to flea markets, arts and crafts shows, or other similar “community-wide”-type events that are coordinated or produced by a third party, if you are required to pay a fee or commission to participate in the event (such as a booth or space rental fees). Unless other exemptions apply, you must collect sales tax.
Use this chart to see if you qualify for the occasional sales exemption:
|you have a sales tax permit||you sell taxable items||collect sales tax (unless an-other exemption applies to the sale).|
|you, as an individual or a business, do not have, and are not required to have, a sales tax permit||you make two or fewer sales per consecutive 12-month period (regardless of the dollar amount of the sales)||
|you are an individual who does not have, and is not required to have, a sales tax permit||
If you sell items at an event coordinated or produced by a promoter, and you do not pay a fee or commission to participate, you are not a “seller” for the purpose of the occasional sales exemption.
If you qualify for the occasional sales exemption, you must let the promoter know that you qualify. You can do this by giving the promoter a letter with the following information.
The letter must say you
The letter must also include your name, address, telephone number and driver’s license. Without this letter, the Comptroller’s office cannot verify you were eligible to make tax-free occasional sales.
Both you and the promoter must keep records for four years to document the exemption.
Nonprofit organizations are sellers, too, when they sell taxable items and must get a sales tax permit and collect and remit sales tax. A nonprofit organization, however, does not need a sales tax permit if it sells taxable items only during qualified tax-free fundraisers, or sells only nontaxable items.
See Nonprofit and Exempt Organizations – Purchases and Sales for information about tax-free sales by certain nonprofit organizations.
If you are a nonprofit organization that is qualified to make tax-free sales at the event, you must let the promoter know. You and the promoter must keep records for four years to document the tax-free sales.
Nonprofit Internal Revenue Code Section 501(c)(3) organizations do not have to collect sales tax on normally taxable items they sell at a county fair to persons attending or par-ticipating in the fair.
The organization must let the promoter know they will be making tax-free sales under this exemption. The 501(c)(3) and the promoter must keep records for four years to document the tax-free sales.
To purchase taxable items tax free for resale during the tax-free sales days, the organization can either give the seller a resale certificate (PDF) (if it has a sales tax permit) or an exemption certificate (PDF).
Taxable entities engaged in business in Texas have franchise tax responsibilities. Examples of nontaxable entities include sole owners and general partnerships of individuals. For more information, see our Franchise Tax Overview.
A taxable entity can qualify for a franchise tax exemption if it
Complete Form AP-114, Texas Nexus Questionnaire (PDF) to determine your franchise tax responsibility. If your entity is not subject to the tax, you must notify the Comptroller’s office in writing if it becomes subject to the tax.
In 2015, the Texas Legislature passed House Bill 855, which requires state agencies to publish a list of the three most commonly used Web browsers on their websites. The Texas Comptroller’s most commonly used Web browsers are Google Chrome, Microsoft Internet Explorer and Apple Safari.