Start with what you sell.
Texas sales tax can apply to tangible personal property and specified taxable services. Do not assume that all services are exempt or that every item on an invoice receives the same treatment.
Describe your product or service precisely, including installation, delivery, subscriptions and bundled charges. Then check the Comptroller’s guidance for that activity. Contractor, repair and remodeling work can require a closer look at the type of property and contract.
Official source: Taxable services ↗
Official source: Repair and remodeling ↗
Check registration before taxable sales.
Use the Comptroller’s permit FAQs to determine whether you must register. The Texas sales tax permit itself has no application fee, although a security bond may be required.
Prepare your legal business name, ownership information, business addresses and identification details before applying. Use the official application rather than a paid service claiming you must pay it to obtain a permit.
Selling through a marketplace can change collection responsibilities. Check the rules for your marketplace and any direct sales separately; do not treat marketplace collection as a blanket exemption for your business.
Official source: Sales tax permit FAQs ↗
Official source: Official permit application ↗
The address and transaction matter.
Texas imposes a 6.25% state sales and use tax. Local taxes can add up to 2%, for a maximum combined rate of 8.25%. Many Houston-area transactions use the 8.25% ceiling, but that rate is not universal.
Do not assign one rate to every “Houston” address or use a ZIP code alone. Determine where the sale is sourced under Texas rules, then verify the address and transaction with the Comptroller’s Sales Tax Rate Locator. Pickup, delivery and orders received at different locations can produce different results.
Official source: Texas Sales Tax Rate Locator ↗
$100 × 8.25% = $8.25 tax
If a fully taxable $100 sale correctly carries an 8.25% combined rate, the customer’s total is $108.25. This demonstrates the calculation only; it does not determine the correct rate for your sale.
Official source: Local sales and use tax collection guide ↗
Follow your assigned filing frequency.
| Frequency | Usual due date |
|---|---|
| Monthly | 20th of the following month |
| Quarterly | April 20, July 20, October 20 and January 20 |
| Annually | January 20 of the following year |
Check your assigned frequency and current official due dates. Weekend and holiday rules can move a deadline.
Permit holders generally must file required returns even when there are no sales or no tax due. Keep collection records separate from ordinary spending money so the amount due is available when you file.
Official source: Filing dates ↗
Official source: Sales tax reporting responsibilities ↗
Make the return easier to prepare.
- Record gross sales, taxable sales and tax collected for the reporting period.
- Keep documentation supporting exempt or resale transactions.
- Reconcile marketplace statements and direct sales separately.
- Review purchases that may create a use-tax obligation.
- Check local allocations, submit the return and retain confirmation.
Official source: Local sales and use tax guidance ↗