The requirement to obtain a Texas sales and use tax permit applies to individuals as well as corporations, firms, partnerships, and all other legal entities.
2. What is tangible personal property?
The statutory definition for "tangible personal property" is "personal property that can be seen, weighed, measured, felt, or touched or that is perceptible to the senses." See Sec. 151.009.
3. What is engaged in business?
A person or a retailer is engaged in business in Texas if any of the following criteria are met:
(A) maintains, occupies, or uses an office, place of distribution, sales or sample room, warehouse or storage place, or other place of business;
(B) has any representative, agent, salesperson, canvasser, or solicitor who operates in this state under the authority of the seller to sell, deliver, or take orders for any taxable items;
(C) promotes a flea market, trade day, or other event that involves sales of taxable items;
(D) uses independent salespersons in direct sales of taxable items;
(E) derives receipts from a rental or lease of tangible personal property that is located in this state;
(F) allows a franchisee or licensee to operate under its trade name if the franchisee or licensee is required to collect Texas sales or use tax; or
(G) conducts business in this state through employees, agents, or independent contractors.
5. Is there a fee charged for a Texas sales and use tax permit?
There is no fee for the Texas Sales and Use tax permit.
However, based on your application, you could be required
to post a security bond. For more information on security
bonds, please refer to Rule 3.327 or contact your
local enforcement field office.
6. If my business doesn't have a federal identification number yet, can I still apply for the sales and use tax permit?
Yes. If a business applies for a sales tax permit prior to obtaining a federal employer's identification number, we will issue a permit under a temporary number. When the federal employer's identification number is provided to the Comptroller's office, we will then issue a new permit, based on the federal number.
7. Do I need more than one permit?
Each seller 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, or the seller's agent, or employee operates for the purpose of receipt of orders for taxable items. 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. If you have multiple places of business you will receive separate permits for each business location displaying the same taxpayer identification number, but with separate outlet or sequence numbers.
8. Can I use the sales tax permit number from my old business or from an existing business that I purchased?
No. 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. See Buying, Selling, or Discontinuing a Business
9. If the ownership of my business changes, is a new permit needed?
Yes. The new owner must obtain a permit if there are any changes in ownership of your business. Incorporating a business or forming a partnership or limited liability company is considered a change of ownership and must be reported. 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.
10. If I am no longer in business, can I keep my sales tax permit?
Your permit is valid only as long as you are actively engaged in business as a seller. If you are no longer conducting business, you should return your permit to the Comptroller for cancellation. Likewise, the Comptroller may cancel your permit if it finds that you are no longer engaged in business as a seller.
11. Should I notify the Comptroller's office if I change my business address or mailing address?
Yes. We need to update our records to ensure that your tax returns are mailed to the correct address. You can make the changes in these ways:
When you apply for a sales and use tax permit, we may be able to inform you of other taxes, licenses, or fees that your business might be responsible for, but you have the obligation to determine what taxes, licenses, or fees (federal, state or local) your business is responsible for reporting and/or paying.
13. Are my business records subject to audit?
Yes. Your records may be audited to determine whether you have paid the correct amount of tax. The audit may determine that you owe tax, that you are entitled to a refund, or that you have paid the correct amount. In general, you may be audited in four years intervals; thus, you are required to keep records for a minimum of four years. See Keeping Records.
14. Once I have obtained a Texas sales and use tax permit, what are my obligations as a permit holder?
