Texas has no personal income tax, and that leads some new business owners to assume there is no state filing at all. Sales tax is where that assumption goes wrong.
When you need a permit
Generally, if you sell or lease taxable goods, or provide taxable services, in Texas. A permit is required before you begin, and there is no fee for it.
What tends to be taxable
- Most tangible goods sold at retail.
- Certain services — the list is specific and it surprises people. Some services are taxable in Texas and many are not.
- Some labor, depending on what it is attached to.
Whether your specific work is taxable is worth confirming rather than assuming in either direction. Getting it wrong in either direction causes problems.
The rate is not one number
The state rate is combined with local rates, so the total depends on where the sale takes place. Businesses that deliver or work in several jurisdictions have to get this right per transaction.
Filing
- Returns are filed on a schedule assigned to your business — monthly, quarterly or annually depending on volume.
- A return is required even in a period with no sales.
- Collected sales tax is held on behalf of the state. It is not revenue and it should not be spent.
Sales tax rules and rates change. Confirm current requirements with the Texas Comptroller for your specific business rather than relying on general guidance, including this.
Ask us
Call (432) 257-7547 or come by 700 C Andrews Hwy in Midland. We work in English and Spanish.
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