Quick Start for:

Electronic Funds Transfer

Electronic Funds Transfer (EFT) Payment Types are TEXNET, WebEFT (WebFile) and Credit Card.

Table of Contents

Forms

Complete this order form to request any of the above forms by mail.

Related Electronic Funds Transfer links:

Q: Who must pay by EFT?

A: A new law which passed during the 2007 legislative session, Senate Bill 377, lowered the threshold for mandatory electronic payments from $100,000 to $10,000 for certain taxes. Taxpayers who paid $10,000 or more in a payment category during the preceding state fiscal year are required by law to electronically transmit payments to the Comptroller's office beginning May 1, 2008. The taxes affected by this law are Sales & Use Tax, Direct Pay, Natural Gas, Crude Oil, Franchise, Gasoline, Diesel Fuel, Hotel Occupancy, Insurance Premium, Mixed Beverage Gross Receipts, and Motor Vehicle Rental. The Comptroller's office will inform taxpayers at least 60 days prior to the due date if you meet this requirement. Taxpayers who remit less than $100,000 for Sales & Use Tax can make their electronic payments by credit card or WebEFT via WebFile. They can also pay electronically via internet or telephone if they enroll in TEXNET.

The $100,000 threshold is applicable to all other taxes not mentioned above. Taxpayers who pay $100,000 or more must make their electronic payments by TEXNET.

If payments for a tax category continue to total $10,000 or more in subsequent years, then payments must continue to be made by EFT. Some taxpayers may have to pay by EFT for several tax types. For example, a company may pay $10,000 for both Sales & Use Tax and Franchise Tax. Both taxes must be paid by EFT.

Legislation provides that taxpayers who do not comply with the EFT requirements can be assessed a 5 percent penalty on the payment amount. This penalty would apply to each filing period in which payment is not remitted electronically.

Q: What types of payments may be paid by EFT?

A: Effective May 2008, all taxpayers who pay $10,000 for any of the eligible taxes or fees must use EFT.

Q: How do I get started?

A: Sales & Use Tax filers can use WebFile to file their tax return and make payments by clicking on WebFile at our home page. If you are required to use TEXNET, click on TEXNET – Electronic Payment Network at our home page or link to activate your account. It is very important to print the TEXNET Electronic Funds Transfer Payment Instruction Booklet (PDF, 1.72M) for the complete instructions on how to use TEXNET.

Q: What is Automated Clearing House (ACH) Debit?

A: To use this method of payment, you must be enrolled in the TEXNET system. TEXNET meets the mandatory electronic payment requirement. If you are required to use EFT, you may use the online activation to enroll. If you are not required to use EFT, you must fill out a paper enrollment form (PDF, 36k) and fax it to the number on the form.

An ACH Debit is where authorization is given to the TEXNET system by the taxpayer to debit the selected bank account. The taxpayer enters the payment information into the TEXNET system by touch-tone telephone or the Internet no later than 6:00 p.m. (CT) on the banking business day before the due date. The TEXNET system will prompt the taxpayer to enter a "settlement (fund transfer) date." Payment warehousing is a feature in which the taxpayer is given the option to choose a settlement date up to 30 days in the future. If a future settlement date is chosen, the taxpayer may inquire, change, or delete the entered information, as long as it's done by 6:00 p.m. (CT) on the banking business day before the scheduled settlement date. On the settlement date, the designated bank account will be debited for the entered payment amount.

After receiving the payment information, the TEXNET system will automatically issue a trace number to identify the completed payment.

A list of TEXNET payment due dates (PDF, 23k) is available. You will need Adobe Acrobat Reader to view the due date schedule.

For complete ACH Debit payment instructions, please read the TEXNET Electronic Funds Transfer Payment Instruction Booklet (PDF, 1.72M). You will need Adobe Acrobat Reader to view the booklet. To request this booklet by mail, complete this order form.

Q: What is ACH Credit with addenda?

A: To use this method of payment, you must be enrolled in the TEXNET system. TEXNET meets the mandatory electronic payment requirement. If you are required to use EFT, you may use the online activation to enroll. If you are not required to use EFT, you must fill out a paper enrollment form (PDF, 36k) and fax it to the number on the form.

The taxpayer originates an ACH Credit (PDF, 1.72M) in either CCD+ or CTX format through their financial institution for settlement on or before the payment due date. The addenda record(s) must be in the standard TXP format. This payment option allows the payment and related information to be transferred together; however, it is more prone to errors if the addenda record is improperly formatted. Inaccurate information could result in the inability to apply the payment timely. This may be considered a late payment and could result in the loss of timely filing and /or prepayment discounts or the assessment of a late filing penalty.

For complete instructions on ACH Credit payments, please read the TEXNET Electronic Funds Transfer Payment Instruction Booklet (PDF, 1.72M). You will need Adobe Acrobat Reader to view the user's guide. To request this booklet by mail, complete this order form.

Q: Do I still file my regular tax returns?

A: Yes, tax returns must be filed by the due date with the Comptroller of Public Accounts. If you are mandatory for paying by EFT at the $100,000 threshold, you are required to file your report electronically for the following taxes: Sales & Use, Direct Pay, Franchise, International Fuels Tax Agreement (IFTA), Motor Fuels, Natural Gas, and Crude Oil. However, if you pay $50,000 or more during the state fiscal year for the above referenced taxes, you will be required to file your tax returns electronically beginning with taxes due in January 2009.

Q: If I pay electronically, can I file my return electronically?

A: The Comptroller's office has two free programs that meet electronic filing requirements.

WebFile is for Sales & Use Tax filers only. This system is designed for fewer than 30 outlets or authorities.

Electronic Data Interchange (EDI) is designed for businesses reporting a large number of outlets, leases, schedules or authorities. EDI meets the mandatory requirement for submitting tax data electronically. Taxpayers and tax professionals can use the Comptroller's approved EDI software to transmit return data and payments for the following taxes:

  • International Fuels Tax Agreement (IFTA)
  • Motor Fuels
  • Natural Gas and Crude Oil
  • Sales Tax/Direct Pay

Please see the Electronic Data Interchange (EDI) section for further details on this system.

General Information

Missed Payment Deadline

If you are enrolled in TEXNET and payment information for ACH Debit transactions cannot be entered into the TEXNET system by 6:00 p.m. CT on the banking business day before the due date, or when ACH Credit with addenda transactions cannot be originated for settlement on the due date, the following procedure is to be used:

  • payment information must be provided to the TEXNET Hotline by telephone at (800) 531-5441, ext. 3-3010. Note: This is necessary to identify the payment; and
  • wire transfer funds to the Comptroller's bank account. Please include the taxpayer number in the wire.

Penalties

Late EFT payments are subject to the same penalties and loss of timely filing and/or prepayment discounts as any other late payment. See the tax return for detailed information. Also, failure to follow the EFT requirements could result in an additional 5 percent penalty being assessed.

Changes

If there is a change in banks or in account numbers for ACH Debit taxpayers, the Comptroller's office must be notified either in writing, by fax, or by accessing https://texnet.cpa.state.tx.us.

If any other information on the TEXNET Enrollment form changes, notification by telephone at (800) 531-5441, ext. 3-3010, is necessary for electronic transfers to be executed properly.

A TEXNET Change Form (#00-941) (PDF, 30k)is available online. You will need Adobe Acrobat Reader to view the form.

Holidays or Weekends

Currently, "same day" settlement of an ACH transaction is not available. When a due date falls on a weekend or holiday, it is important to originate the ACH transaction no later than the banking business day before the weekend or holiday. For example, if the due date falls on a Monday (or Tuesday, if Monday is a banking holiday), the payment must be originated no later than the previous Friday.

A due date schedule is provided to all taxpayers each calendar year. A schedule of EFT payment due dates (PDF, 23k) is available.

Late Payments/Proof of Payment

If a payment is received after the due date and the taxpayer and his financial institution do not think they are responsible for the delay, one of the following items must be furnished as appropriate proof of an attempt to transfer funds:

  • the trace number provided by the TEXNET system, when using ACH Debit;
  • the bank-assigned ACH trace number, when using ACH Credit with addenda; or
  • the Federal Reserve Bank wire transfer reference number, when using the backup procedures.

If the Comptroller's office determines that the taxpayer did attempt to transfer payment in a timely manner, payment records can be corrected upon receipt of appropriate documentation. Please call the TEXNET Hotline at (800) 531-5441, ext. 3-3010 for assistance.

Definitions

Addenda Record

An addenda record is sent with an ACH entry and contains an 80-character "free-form" field for information required by the Comptroller to identify the payment. In electronic tax collection, there is a standardized format for the addenda record known as TXP.

Automated Clearing House (ACH)

A central distribution and settlement point (in Texas, the Federal Reserve Bank in Dallas) for the electronic clearing of debits and credits between financial institutions. Every day, millions of ACH transactions take place - with funds debited from, or credited to, the balances of participating financial institutions, which in turn post those transactions to their customers' accounts.

Settlement

Occurs when funds are actually transferred from the taxpayer's bank to the Comptroller's bank account.

Settlement Date

The business day on which funds are transferred. This date should not be later than the due date for that tax.

Questions

For questions regarding Electronic Funds Transfer, please call the Electronic Reporting Section at (800) 531-5441, ext. 3-3630. You can also e-mail us at eft.cpa@cpa.state.tx.us. For questions regarding TEXNET payments, please call the TEXNET Hotline at (800) 531-5441, ext. 3-3010.

Required Plug-ins