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Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts

taxes

Texas Sales and Use Tax Frequently Asked Questions


Obtaining a Sales Tax Permit

Who is required to hold a Texas sales and use tax permit?

You must obtain a Texas sales and use tax permit if you are an individual, partnership, corporation or other legal entity engaged in business in Texas and you:

  • Sell tangible personal property in Texas;
  • Lease or rent tangible personal property in Texas;
  • Sell taxable services in Texas; or
  • Sell or lease tangible personal property or taxable services to customers in Texas from an out-of-state business and have revenue from Texas of $500,000 or more in the past 12 months.
What is tangible personal property?

"Tangible personal property" is personal property that can be seen, weighed, measured, felt, or touched or that is perceptible to the senses. See Tax Code Section 151.009, "Tangible Personal Property."

What is a taxable service?

The sale of certain services, including amusement, cable television, data processing and telecommunication services, is subject to Texas sales and use tax. See Tax Code Section 151.0101, Taxable Services for a full list of taxable services. See also Publication 96-259, Taxable Services for more information.

What does it mean to be engaged in business?

You are engaged in business in Texas if any of the following statements apply:

  • You have a temporary or permanent location (e.g., office, warehouse, place of distribution) in Texas that you operate directly or through an agent.
  • You have an employee or representative in Texas who sells, delivers or takes orders for taxable items.
  • You perform services using company employees, authorized service agents or subcontractors in Texas.
  • You conduct business in any other manner in Texas.

Additionally, you may have sales tax responsibilities if you are a remote seller, marketplace seller or marketplace provider. See Publication 94-108, Engaged in Business for additional information.

How do I get a permit?

You can apply for a sales tax permit using our Texas Online Sales Tax Registration Application System, or print AP-201, Texas Application for Sales and Use Tax Permit (PDF) from the Texas Sales and Use Tax Forms webpage and mail it to the Comptroller’s office at:

Comptroller of Public Accounts
111 E. 17th St.
Austin, TX 78774-0100
Is there a fee for a permit?

There is no fee for the permit, but you may be required to post a security bond. For more information on security bonds, contact a Comptroller field office.

Once I have obtained a Texas sales and use tax permit, what are my obligations as a permit holder?

As a permit holder, you are required to:

  • Post your permit at your place of business;
  • Collect sales tax on all taxable sales;
  • Pay sales and use tax on all taxable purchases;
  • Timely report and pay sales and use taxes; and
  • Keep adequate records.

You are required to file a sales and use tax return even if there are no taxable sales or purchases to report during that filing period.

If my business doesn't have a federal identification number yet, can I still apply for the sales and use tax permit?

Yes, you can submit an application for a sales and use tax permit without including a federal identification number on the permit application.

Do I need more than one permit?

As a seller, you must have a tax permit for each active place of business. A place of business is an established outlet, office or location that the seller, the seller's agent or employee operates to receive three or more orders for taxable items in a calendar year. If you have multiple active places of business, you will receive separate permits for each business location with the same taxpayer identification number but with separate outlet numbers.

A warehouse, storage yard or manufacturing plant is not a "place of business of the seller" for tax permit requirement purposes unless the seller receives three or more orders in a calendar year at the warehouse, storage yard or manufacturing plant.

Can I use the sales tax permit number from my old business or from an existing business that I purchased?

If you held a permit for a previous business and your permit has been cancelled or is inactive, you must reapply for a sales tax permit for your new business even if it is at the same location.

A permit is valid only for the person to whom it was issued and only for the business at the address shown on the permit. It cannot be transferred from one owner to another. For additional information on buying an existing business, see the Buying, Selling, or Discontinuing a Business section of this FAQs webpage.

If the ownership of my business changes, is a new permit needed?

Yes. Your business needs a new permit if there are any changes in ownership. If you are a sole proprietor and you incorporate your business, or you form a partnership or limited liability company, this is considered a change of ownership. For example, if you operate a business as a sole proprietor but decide to incorporate, the corporation will have to obtain a new permit for the business, even though you may operate the business as an officer of the corporation. You also must close the sole proprietor sales tax permit if it is no longer needed.

If I am no longer in business, can I keep my sales tax permit?

Your permit is valid only if you are actively engaged in business as a seller. If you are no longer conducting business, you should close the business location and return your permit to the Comptroller’s office for cancellation. Likewise, the Comptroller’s office may cancel your permit if it finds that you are no longer engaged in business as a seller.

Please note that if your permit is active, you must still file sales tax returns – even if you have no taxable sales or purchases to report.

Should I notify the Comptroller's office if I change my business address or mailing address?

Yes. Your current business and contact information must be accurate.

Update your information through one of the following methods:

Am I required to register to pay other taxes?

When you apply for a sales and use tax permit, we may be able to inform you of other taxes, licenses or fees for which your business might be responsible; but it is ultimately your responsibility to determine what taxes, licenses or fees (federal, state or local) your business must report or pay.

Are my business records subject to audit?

Yes. Your records may be audited to determine whether you have collected and paid the correct amount of tax. The audit may determine that you owe tax, that you are entitled to a refund of overpaid taxes or that you have paid the correct amount. In general, you may be audited in four-year intervals; thus, you are required to keep records for a minimum of four years. See the Keeping Records section of this FAQs webpage.

Why are you giving telemarketers my business telephone number?

The Comptroller’s office receives requests each week for a list of businesses that have been issued new sales tax permits. This is public information, and our office is required by law to provide the requested public information, including the permittee’s telephone number. Please keep the following in mind:

  • We do not sell this information.
  • We are prohibited by law from asking a requestor what they plan to do with the information.
  • New sales tax permittees sometimes experience an influx of calls from vendors seeking to provide goods or services to the new taxpayers.
  • Taxpayers have reported that within a week or two of starting business, the unsolicited calls diminish.
  • The Comptroller’s office is committed to protecting your information; therefore, none of your confidential information is ever disclosed.