Texas Sales Tax
Frequently Asked Questions
Reporting and Remittance
- What is a sales and use tax return?
- When do I file the tax return form?
- If I cannot file my return or pay the tax on time, can I request an extension?
- What happens if I file a late tax return or my tax payment is overdue?
- If I don't owe taxes, do I still file a return?
- How do I pay the taxes that are due?
- What happens if I do not file a tax return?
- What are prepayment discounts?
- What are vendor's discounts?
- If a customer pays after the tax reporting period, or pays in installments, when is the tax due?
- What if I made a mistake on my return and need to make changes?
- 1. What is a sales and use tax return?
- A sales and use tax return is a form used by a Texas sales and use tax permit holder to report the collection and remittance of sales and use taxes to the Comptroller's office. Returns can be downloaded from our Tax Forms Online page or file online using Webfile.
- 2. When do I file the tax return form?
- When you obtain your Texas sales and use tax permit, you will be instructed to file your tax return on a monthly, quarterly, or yearly basis (the determination is based on the volume of sales expected for your business). This filing requirement will be adjusted based on the amount of taxes that you actually collect.
- Most businesses will file monthly returns, but depending on how much tax your business collects, you might qualify to file quarterly or yearly returns.
- Monthly: Taxpayers who collect $500 or more in state sales or use tax in a month must file monthly. Monthly sales and use tax returns are due on or before the 20th day of the month following the month in which the taxes were collected. For example, the July return must be filed on or before August 20th.
- Quarterly: Taxpayers who collect less than $500 state sales and use tax per month (or less than $1500 per calendar quarter) may file quarterly. Quarterly sales and use tax returns are due on or before the 20th day of the month after the end of the quarter in which the taxes were collected. For example, the first quarter covers January, February, and March, and the return must be filed on or before April 20th.
- Yearly: Taxpayers who collect less than $1,000 in state sales and use tax per year may file yearly. Yearly sales and use tax returns are due on or before January 20th.
- If the due date falls on a Saturday, Sunday, or legal holiday the next business day is the due date. We send preprinted tax returns to almost all businesses that hold a Texas sales and use tax permit. Preprinted monthly tax returns are mailed the first week of the following month. For example, the July return will be mailed the first week of August. Preprinted quarterly tax returns are mailed the first week of the month following the end of the quarter. For example, the first quarter return will be mailed the first week of April.
- We will not send preprinted tax returns to a business if the post office has notified us that the mailing address is undeliverable, or if you are required by state law to file your tax returns electronically. Texas law requires every taxpayer or licensee who paid a total of $100,000 or more in a payment category during the preceding state fiscal year (September 1 through August 31) to pay by EFT.
- Preprinted yearly returns are mailed in November prior to the due date in January.
- If the business does not receive a preprinted form, it is the taxpayer's responsibility to file a tax return and remit taxes on time. To receive a blank return, a taxpayer can download a blank return at our Tax Forms Online. call us at (800) 252-1389, or visit the nearest enforcement field office. Some sales tax forms are also available via Fax on Demand. You can request a fax when you call (800) 252-5555.
- 3. If I cannot file my return or pay the tax on time, can I request an extension?
- No, unless a disaster has been declared in your area or the Comptroller specifically grants an extension. See Rule 3.1 in General Rules for more details. The Comptroller rarely approves an extension unless there's been a natural disaster declared by the Texas Governor or the President of the United States.
- 4. What happens if I file a late tax return or my tax payment is overdue?
If you file a late return and/or make a late tax payment, you are liable for interest and penalty charges. If you file a sales tax return after the due date, the discount is not allowed. Taxpayers are required to file sales tax returns by the due date. For reports due before Oct. 1, 2011, a $50 late filing fee was assessed if you filed more than two returns with a postmark date later than the due date. If you file a report originally due on or after Oct. 1, 2011, with a postmark after the due date the $50 late filing fee will be assessed. The penalty will be assessed regardless of whether you subsequently file the report or whether any taxes or fees were due for the period covered by the late-filed report. The $50 penalty is due in addition to any other penalties assessed for the reporting period.
If the tax liability is paid 1-30 days late, there is a 5% (.05) penalty applied to the amount of sales tax paid after due date. If the tax liability is paid 31-60 days late, there is a 10% (.10) penalty applied to the amount of sales tax due. If the payment is over 60 days late, the penalty is 10% of the amount of sales tax due plus interest. Calculate interest at the rate published online. Additionally, delinquent taxpayers may be referred to an outside collection agency which subjects them to a collection fee. If you pay your full tax liability on time but do not file your return on time, you may still be liable for a penalty for filing a late return as noted above.
If you fail to file a sales tax return timely, you may receive a Notice of Tax/Fee Due that estimates the amount of sales tax due for the filing period. This is an estimate only. The estimated figure will be replaced with the actual amount of tax due once a return is filed. A return must be filed even if you had no sales. If you do not file and pay your sales tax on or before 20 days after we issued this estimate, you are also liable for an additional 10% penalty on the outstanding tax. So you could be assessed a twenty (20) percent penalty on the tax due plus any applicable collection fees and interest.
- 5. If I don't owe taxes, do I still file a return?
- Yes. You must file a tax return even if you have no sales for the reporting period or if all your sales are nontaxable.
- 6. How do I pay the taxes that are due?
- For most taxpayers, there are several payment choices. You can:
- Texas law requires every taxpayer who paid a total of $100,000 or more in sales and use taxes during the preceding state fiscal year (September 1 - August 31) to pay by EFT. The Comptroller will annually review the payments made during the previous fiscal year to determine who meets this criterion. We will inform these taxpayers at least 60 days prior to the effective date that they must remit payment(s) by EFT.
- Reminder: Regardless of how you pay, you must make your payments on time and file a timely return.
- 7. What happens if I do not file a tax return?
- If you fail to file a required sales tax report, the Comptroller's office will send you an estimated billing, with instructions to file a report providing your actual sales data for the estimated period. Please be aware that failure to file or pay a sales tax report may result in collection actions, including, but not limited to, additional late filing penalties, liens, and criminal charges.
- 8. What are prepayment discounts?
- Prepayments may be made by taxpayers who file monthly or quarterly returns. Prepayers are entitled to an additional 1.25% (one and one quarter percent) discount. The amount of the prepayment must be a reasonable estimate of the state and local tax liability for the entire reporting period. "Reasonable estimate" means at least 90% of the total amount due or an amount equal to the actual net tax liability due and paid for the same reporting period of the immediately preceding year. See Rule 3.286 "Seller's and Purchaser's Responsibilities" for additional information.
- 9. What are vendor's discounts?
- Taxpayers who file their returns on or before the due date are entitled to a .5% (one half of one percent) discount. Instructions on calculating the timely filing discount are included on the Texas sales and use tax returns.
- 10. If a customer pays after the tax reporting period, or pays in installments, when is the tax due?
- If a retailer is on the accrual basis of accounting, tax is due based on the date the sale takes place. A retailer on the cash basis of accounting will report a sale when payment is received from the customer. See Rule 3.302.
- If you report and pay tax on a credit sale and later find you cannot collect payment for it, you may be able to take a "bad debt" deduction on your sales and use tax return. See Rule 3.302.
- 11. What if I made a mistake on my return and need to make changes?
- Make a copy of the original return you filed or download a blank form from our website.
- Write "amended return" on the top of the form.
- If you're using a copy of your original return, cross out the amounts that are wrong and write in the correct amount. If you're using a blank form, enter the amounts as they should have appeared on the original return.
- Sign and date the return.
- If the amended return shows you overpaid your taxes, attach a letter requesting a credit and let us know how you would like to receive your refund. We can either send you a check for the overpaid amount or let you take a credit on a future return.
- If the amended return shows you underpaid your taxes, please send the additional tax due plus any penalties and interest that may apply.
- Mail the signed and dated amended return to:
Comptroller Of Public Accounts
111 E. 17th Street
Austin Texas 78774-0100