taxes

Texas Sales and Use Tax Frequently Asked Questions

Prepayment Discounts, Extensions and Amendments

What is a prepayment discount?

A prepayment discount is a discount of 1.25 percent that monthly or quarterly taxpayers can take in addition to the 0.5 percent timely filing discount allowed any taxpayer filing timely reports and payments.

What are the requirements to take a prepayment discount?

A monthly or quarterly filing taxpayer can take a prepayment discount if the taxpayer does each of the following:

  • prepays a “reasonable estimate” of their state and local sales and use tax liability for the entire reporting period
  • files a prepayment report (PDF) if paying by mail
  • files their monthly or quarterly report showing the total tax amount due on or before the reporting period’s due date, and pays the balance of the tax due for the period
What are the due dates for filing prepayment reports and making payments?

The prepayment report and tax prepayment for a monthly filer are due on or before the 15th day of each month. For example, for a January return that’s due on Feb. 20, the prepayment report and tax prepayment are due on Jan. 15.

The prepayment report and tax prepayment for a quarterly filer are due on or before the 15th day of the second month of each quarter. For example, for the first quarter return filing period that is due on April 20, the prepayment report and tax prepayment are due on Feb. 15. See the Prepayment Discount Examples.

See Rule 3.286 (h), Seller's and Purchaser's Responsibilities for additional information.

What is a reasonable estimate to qualify for a prepayment discount?

A "reasonable estimate" for a prepayment discount means paying

  • at least 90 percent of the current period’s total tax amount due; or
  • at least 100 percent of the total tax amount due and paid in the same reporting period in the previous year.

See Rule 3.286 (h), Seller's and Purchaser's Responsibilities for additional information.

Prepayment Discount Examples

A monthly filer owes tax of $2,500.00 for its February report due March 20. For its previous year’s February report, it owed and paid $1,700.00. For its current February tax prepayment and report, it can prepay

  • $2,250.00, paying 90 percent of its current February tax payment due; or
  • $1,700.00, matching its previous February tax payment due.

A quarterly filer owes tax of $750.00 for its first quarter report due April 20. For its previous year’s first quarter report, it owed and paid $620.00. For its current year’s first quarter tax prepayment and report, it can prepay

  • $675.00, paying 90 percent of its current year’s first quarter tax payment due; or
  • $620.00, matching its previous year’s first quarter tax payment due.

See Rule 3.286 (h), Seller's and Purchaser's Responsibilities for additional information.

What if I made a mistake on my return and need to make changes?

You can submit an amended return by

  • making corrections on a copy of the original return you filed; or
  • completing a new return with the correct information.

In either case, write “Amended Return” on the top of the form and sign and date the return.

Mail the amended return, and any additional tax due (if you underpaid your taxes) plus any penalties and interest, to

Comptroller of Public Accounts
111 E. 17th Street
Austin Texas 78774-0100

If you overpaid your taxes, see Sales Tax Refunds.

For additional information about how to amend your report, see