How to File Sales Tax in Texas: A Complete Guide for Small Businesses
Everything Texas small business owners need to know about collecting, reporting, and filing sales tax. Nexus rules, rates, deadlines, and filing walkthrough.
Texas has a reputation for being business-friendly, but sales tax filing can still trip up new owners. This guide walks through everything you need to know.
Who needs to collect Texas sales tax?
You must collect sales tax if you have nexus in Texas. Nexus is established by:
- A physical location (store, warehouse, office)
- An employee or contractor in the state
- Inventory stored at an Amazon FBA warehouse
- Over $500,000 in Texas sales in the previous 12 months (economic nexus)
The current rate
The state rate is 6.25%. Local jurisdictions (cities, counties, transit authorities, special districts) can add up to 2%, making the maximum combined rate 8.25%.
Unlike some states, Texas is a destination-based state — you charge the customer's rate, not your own.
What's taxable in Texas?
Most tangible personal property and many services:
- Retail sales of goods
- Repair services
- Data processing (20% exemption)
- Amusement services
- Many telecommunications
Not taxable: professional services (accounting, legal, medical), groceries, prescription drugs, most agricultural products.
Filing frequency
Texas assigns filing frequency based on expected liability:
- Monthly: $1,500+ per month expected
- Quarterly: $500-$1,499 per month
- Yearly: under $500 per month
Reports are due on the 20th of the month following the end of the reporting period.
Step-by-step: filing with the Texas Comptroller
1. Register for a Sales and Use Tax Permit at comptroller.texas.gov
2. Collect tax at point of sale — use destination-based rates
3. File via Webfile (online), TEXNET, or by mail
4. Pay via ACH, credit card, or check
5. Keep records for 4 years
Common mistakes
- Using your own city's rate instead of the customer's
- Forgetting to file a zero return in months with no sales
- Missing the 20th deadline (penalty is $50 + 5-10% of tax due)
- Not tracking exempt sales (requires a valid exemption certificate)
How TinSuite helps
TinSuite's tax engine automatically:
- Detects nexus in every US state based on your sales
- Applies correct destination-based rates
- Generates a filing-ready Sales Tax Report by jurisdiction
- Sends reminders before each filing deadline
No more spreadsheets. No more late filings. Try TinSuite free for 14 days.