If you’re selling digital services and products to customers in Texas, then you might be liable for sales tax](https://www.quaderno.io/blog/vat-gst-sales-consumption-tax) in Texas. This guide covers two very important parts of the system:
- Registering for Texas sales tax, and then
- Filing Texas sales tax returns on time.
We’ve scoured the Texas Comptroller’s website to provide you with all the necessary information about TX sales tax for out-of-state businesses in one place.
How to register for sales tax in Texas
Here are some TX sales tax instructions. Remote sellers register for sales tax in Texas according to where you are based.
US businesses (or businesses that have a physical address in the United States) can register via eSystems, an online tax portal. This portal is also where you’ll file and pay your tax returns. More on that later!
International businesses must register by filling out a form and emailing it to the Texas Comptroller office. You’ll find more information below.
US businesses
The first step is to register for a sales tax permit in Texas.
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Go to the eSystems website and click the option on the right, creating a profile as a first time user.
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Then you’ll enter account information with the log-in credentials of your choice. You can check the availability of your username by clicking the link at the top. A valid US phone number is required.
Note: If you have a base outside of the US as well, you have the option to + Add an International Number at the bottom of the form.
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Next you’ll set 3 security questions with personal information only you would know the answer to. These will be used for User ID or password recovery if you ever forget your log-in information.
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The final steps are to agree to the Terms of Use and then verify your email address. You’re done! It will take 2-3 weeks to receive your Texas sales permit. When you do, you’ll be assigned a tax filing frequency: monthly, quarterly, or yearly. You’ll also receive a Webfile number. It’s a 6-digit number beginning with RT or XT. This is a unique identifier used to identify your business in a certain tax type. It’s also your access code to the electronic reporting feature within eSystems.
International businesses
In summary, the registration process is pretty simple! You must fill out Form AP-201, Texas application and email it to [email protected] or fax the application to 512-936-0010.
However, the form requires a lot of information, so it’s worth looking through and gathering all the necessary documents and data ahead of time. Here’s a sneak peek:
Question 3 asks about a Federal Employer Identification Number (FEIN or EIN). If you aren’t familiar with this, take a moment to read about what an EIN number is and how to get one.
It will take at least 2-3 weeks to receive your TX sales tax permit. When you do, you’ll also be assigned a filing frequency: monthly, quarterly, or yearly.
How to file sales tax returns in Texas
Sales and taxes should be reported and filed using US dollars. If you’ve made any transactions in Texas in a different currency, be sure to convert those to USD using official currency exchange rates.
When to file and pay Texas sales tax
You must file a sales tax return either monthly, quarterly, or yearly with the Texas Comptroller office. The deadlines are as follows:
Monthly
For monthly filers, reports are due on the 20th of the month following the reporting month. For example, the April sales tax report is due May 20.
Quarterly
For quarterly filers, reports are due on the 20th of the month following the reporting period.
- April 20, for first quarter ending March 31
- July 20, for second quarter ending June 30
- October 20, for third quarter ending September 30
- January 20, for fourth quarter ending December 31
Yearly
For yearly filers, reports for the previous year are due on January 20.
Note: Didn’t make any sales in Texas during your reporting period? You should still report that. This is typically called a “Nil declaration” and it follows the exact same process as a normal return. (Just a little less data entry 😉) Texas also allows you to file a nil declaration by phone using Telefile.
How to file a Texas sales tax return
Before you start your Texas sales tax return, you should collect all the information about your taxable sales in Texas during the previous quarter. The Texas Comptroller website suggests having these pieces ready:
- total sales and income
- total purchases and expenses
Here the process differs again for US businesses and international businesses.
US businesses
You can file online in Webfile. You can log in here. Click ‘File and Pay Taxes’ at the top.
Describe any form of confirmation or receipt that the user will receive after submitting.
International businesses
First, you must request a Webfile number. It’s a 6-digit number beginning with RT or XT. This is a unique identifier used to identify your business in a certain tax type. It’s also your access code to the electronic reporting feature within eSystems.
To request one, simply contact Texas’ Electronic Reporting Section at 1-800-442-3453 or [email protected]. Let them know you’re a foreign business that’s registered for sales tax in the state, and needs a Webfile number to report your taxes.
Once you have the number, you can log in to eSystems and file your tax return online.
Alternatively, you still have the option of snail mail. Download the tax return from this site, print and fill it out. Then you should mail it to:
Texas Comptroller
111 E. 17th St.
Austin, TX 78774
USA
How to pay sales tax in Texas
TX sales tax payments must be made using US dollars.
US businesses
Pay in Webfile. Send your payment via WebEFT, which requires your bank’s routing number and your account number.
Use a credit card. These cards are accepted:
- American Express
- Discover
- Mastercard
- Visa
But the Texas Comptroller office charges a non-refundable convenience fee that will be included in the transaction. The convenience fee is based on the amount of tax paid.
What to do in between registering and filing?
Well, you must comply with all the rules for Texas sales tax! That means charging the Texas sales tax rate -- at least 6.25% sales tax -- and watching out for local level taxes, among other things.
For further reading that will help you stay compliant and successful as a remote seller, check out our Guide to Sales Tax in Texas.
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the tax authorities.
