Asked about Texas sales and use tax, Comptroller filings, Texas tax permits, Texas exemptions, Texas nexus, or any request involving Texas state sales and use tax compliance.
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Quick reference table
| Field | Value | | --- | --- | | Jurisdiction | Texas, United States | | Jurisdiction code | US-TX | | Tax type | Sales and Use Tax (state + local) | | State rate | 6.25% | | Local rate cap | 2.00% (city + county + transit + special district) | | Maximum combined rate | 8.25% | | Sourcing | Origin-based for intrastate; destination-based for remote sellers | | Economic nexus | $500,000 total Texas revenue for remote sellers; includes taxable and nontaxable sales into Texas | | Primary legislation | Texas Tax Code, Chapter 151 | | Tax authority | Texas Comptroller of Public Accounts | | Filing portal | https://comptroller.texas.gov/taxes/sales/ | | SST member | Yes (associate member) | | Return form | 01-114 (standard); 01-117 (short form) | | Filing frequencies | Monthly, quarterly, annual (assigned by Comptroller) | | Vendor discount | 0.5% of tax due (max $1,750/month) for timely filing | | No state income tax | Correct -- but franchise tax applies to businesses (separate) | | Federal framework skill | us-sales-tax | | Skill version | 2.0 |
Required inputs table
| # | Question | Why it matters | |---|----------|----------------| | 1 | Texas Sales and Use Tax Permit number? | Required for filing | | 2 | Assigned filing frequency? | Determines due dates | | 3 | Nexus type (physical, economic, both)? | $500,000 threshold | | 4 | Sell through marketplace facilitators? | Facilitators collect on facilitated sales | | 5 | Primary business location in Texas? | Origin-based for intrastate sales | | 6 | Sell services? Which types? | Texas taxes only enumerated services | | 7 | Sell SaaS or data processing services? | 20% exemption on data processing services | | 8 | Franchise tax obligations? | Separate from sales tax -- escalate if needed |
R-TX-1 -- Franchise tax
Texas franchise tax (margin tax) is entirely separate. Outside scope.
R-TX-2 -- Motor vehicle sales tax
Administered by TxDMV, not Comptroller. Different return process.
R-TX-3 -- Oil and gas equipment
Quick reference table (https://comptroller.texas.gov/taxes/sales/remote-sellers-marketplace-faq.php)
| Field | Value |
|---|---|
| Jurisdiction | Texas, United States |
| Jurisdiction code | US-TX |
| Tax type | Sales and Use Tax (state + local) |
| State rate | 6.25% |
| Local rate cap | 2.00% (city + county + transit + special district) |
| Maximum combined rate | 8.25% |
| Sourcing | Origin-based for intrastate; destination-based for remote sellers |
| Economic nexus | $500,000 total Texas revenue for remote sellers; includes taxable and nontaxable sales into Texas |
| Primary legislation | Texas Tax Code, Chapter 151 |
| Tax authority | Texas Comptroller of Public Accounts |
| Filing portal | https://comptroller.texas.gov/taxes/sales/ |
| SST member | Yes (associate member) |
| Return form | 01-114 (standard); 01-117 (short form) |
| Filing frequencies | Monthly, quarterly, annual (assigned by Comptroller) |
| Vendor discount | 0.5% of tax due (max $1,750/month) for timely filing |
| No state income tax | Correct -- but franchise tax applies to businesses (separate) |
| Federal framework skill | us-sales-tax |
| Skill version | 2.0 |
Required inputs table
| # | Question | Why it matters |
|---|---|---|
| 1 | Texas Sales and Use Tax Permit number? | Required for filing |
| 2 | Assigned filing frequency? | Determines due dates |
| 3 | Nexus type (physical, economic, both)? | $500,000 threshold |
| 4 | Sell through marketplace facilitators? | Facilitators collect on facilitated sales |
| 5 | Primary business location in Texas? | Origin-based for intrastate sales |
| 6 | Sell services? Which types? | Texas taxes only enumerated services |
| 7 | Sell SaaS or data processing services? | 20% exemption on data processing services |
| 8 | Franchise tax obligations? | Separate from sales tax -- escalate if needed |
Tangible personal property table
| Pattern | Taxable? | Notes |
|---|---|---|
| General TPP (electronics, furniture, appliances, equipment) | TAXABLE | Tex. Tax Code Section 151.051 |
| Clothing and footwear | TAXABLE | NO clothing exemption except during Sales Tax Holiday |
| Clothing under $100 during August Sales Tax Holiday | EXEMPT | Tex. Tax Code Section 151.326 |
Food and beverages table
| Pattern | Taxable? | Citation |
|---|---|---|
| Grocery food (for home consumption) | EXEMPT | Sec. 151.314 |
| Prepared food (heated, served with utensils) | TAXABLE | Sec. 151.314(c) |
| Soft drinks / candy | TAXABLE | Sec. 151.314(b) |
| Bakery items (unheated, no utensils) | EXEMPT | |
| Dietary supplements | EXEMPT | |
| Bottled water | EXEMPT | |
| Ice | EXEMPT | |
| Alcoholic beverages | TAXABLE |
SaaS and digital goods table
| Pattern | Taxable? | Notes |
|---|---|---|
| Canned software (any delivery) | TAXABLE | Sec. 151.009 |
| Custom software (any delivery) | TAXABLE | Unlike most states, TX taxes custom software |
| SaaS (cloud-hosted) | TAXABLE | As data processing service -- 20% exemption applies |
| Data processing services | TAXABLE (80%) | Only 80% of charge taxable; 20% exempt under Sec. 151.351 |
| Streaming services | TAXABLE | As amusement services |
| Digital books, music, movies (download) | TAXABLE | Treated as TPP |
Services table
| Pattern | Taxable? | Citation |
|---|---|---|
| Amusement services | TAXABLE | Sec. 151.0028 |
| Cable television | TAXABLE | Sec. 151.0033 |
| Credit reporting / debt collection | TAXABLE | Sec. 151.0039 |
| Data processing | TAXABLE (80%) | Sec. 151.0035; 20% exempt |
| Information services | TAXABLE | Sec. 151.0038 |
| Laundry/cleaning/garment services | TAXABLE | Sec. 151.0045 |
| Motor vehicle parking/storage | TAXABLE | Sec. 151.0048 |
| Nonresidential real property repair/remodeling | TAXABLE | Sec. 151.0048 |
| Pest control | TAXABLE | |
| Security services | TAXABLE | |
| Telecommunication | TAXABLE | Sec. 151.0103 |
| Waste/trash removal | TAXABLE | |
| Professional services (legal, accounting, consulting, medical, engineering) | NOT TAXABLE | Not enumerated |
| Residential construction labor | NOT TAXABLE | |
| Residential real property services (cleaning, landscaping) | NOT TAXABLE | |
| Advertising | NOT TAXABLE | |
| Transportation/freight | NOT TAXABLE | |
| Education | NOT TAXABLE |
Manufacturing and exemptions table
| Pattern | Taxable? | Citation |
|---|---|---|
| Manufacturing equipment (directly in manufacturing) | EXEMPT | Sec. 151.318 |
| Raw materials / ingredients for manufactured product | EXEMPT | Sec. 151.318 |
| Farm/ranch machinery | EXEMPT | Sec. 151.316 |
| Agricultural supplies (feed, seed, fertilizer) | EXEMPT | Sec. 151.316 |
| Resale (Form 01-339) | EXEMPT | Sec. 151.302 |
| Interstate commerce (shipped out of state) | EXEMPT | Sec. 151.307 |
| Federal government | EXEMPT | Sec. 151.309 |
| Prescription drugs | EXEMPT | Sec. 151.313 |
| OTC drugs and medicine | EXEMPT | Sec. 151.313 -- Texas exempts OTC (unlike many states) |
| Containers/packaging for resale goods | EXEMPT | Sec. 151.302(c) |
| Newspapers/periodicals | EXEMPT | Sec. 151.320 |
Rate structure table
| Component | Maximum rate |
|---|---|
| State | 6.25% |
| City | 2.00% |
| County | 0.50% |
| Transit authority | 1.00% |
| Special district | Varies |
| Combined cap | 8.25% |
Sourcing table
| Scenario | Rate applied |
|---|---|
| Intrastate (seller and buyer both in TX) | Rate at seller's location (origin-based) |
| Remote (out-of-state) sellers | Rate at buyer's ship-to address (destination-based) |
Forms table
| Form | Use |
|---|---|
| 01-114 | Standard sales and use tax return |
| 01-117 | Short form |
| 01-115 | Schedule A -- local tax detail |
| 01-148 | Use tax return (purchasers) |
| 01-339 | Exemption/resale certificate |
Due dates table
| Frequency | Due date |
|---|---|
| Monthly | 20th of following month |
| Quarterly | April 20, July 20, October 20, January 20 |
| Annual | January 20 |
Economic nexus table (https://comptroller.texas.gov/taxes/sales/remote-sellers-marketplace-faq.php)
| Parameter | Value |
|---|---|
| Revenue threshold | $500,000 total Texas revenue for remote-seller safe harbor |
| Transaction threshold | None |
| Measurement period | Preceding 12 calendar months |
| Sales included | Taxable and nontaxable sales of tangible personal property and services into Texas, including resale sales and sales to exempt entities |
| Authority | Comptroller remote-seller guidance; Texas Tax Code Section 151.107; Rule 3.286 |
Penalties table
| Penalty | Rate |
|---|---|
| Late filing (1-30 days) | 5% of tax due |
| Late filing (>30 days) | 10% of tax due |
| Fraud | 50% of deficiency |
Vendor discount table
| Parameter | Value |
|---|---|
| Rate | 0.5% of tax due |
| Maximum | $1,750/month for timely filers |
Statute of limitations table
| Scenario | Period |
|---|---|
| Standard | 4 years |
| No return | Unlimited |
| Fraud | Unlimited |
| 25%+ understatement | 6 years |
Situation: Business purchases $1,000/month SaaS. Resolution: Taxable amount = $800 (80%). At 8.25%: tax = $66.00, not $82.50.
Situation: Cleaning company serves both commercial offices and homes. Resolution: Commercial (nonresidential) = TAXABLE. Residential = NOT TAXABLE. Classify by property type.
Situation: Customer buys $75 jeans during August holiday weekend. Resolution: EXEMPT. Clothing under $100/item during holiday. Sec. 151.326.
Situation: Dealer sells a vehicle. Resolution: Motor vehicle sales tax (6.25%) administered by TxDMV, not Comptroller. Separate process.
Situation: Business purchases custom-developed software. Resolution: TAXABLE in Texas (unlike most states). Sec. 151.009.
Input: $800 TV. Rate: 8.25%. Expected: Tax = $66.00.
Input: $150 of bread, eggs, meat. Expected: Tax = $0.
Input: $2,000/month SaaS. Rate: 8.25%. Expected: Taxable = $1,600. Tax = $132.00.
Input: NY seller, $550K Texas sales, 12 months, no physical presence. Expected: Exceeds $500K. Must register.
Input: $30 OTC cold medicine. Expected: Tax = $0. OTC exempt in Texas.
Input: $500 commercial janitorial. Rate: 8.25%. Expected: Tax = $41.25.
Input: $200 home cleaning. Expected: Tax = $0. Residential exempt.
Input: $50,000 production machine. Form 01-339. Expected: Tax = $0.
Input: Timely pays $10,000 in tax. Expected: Discount = $50. Net = $9,950.
Input: $75 jeans during August Sales Tax Holiday. Expected: Tax = $0.
This skill is provided for informational and computational purposes only and does not constitute tax, legal, or financial advice. All outputs must be reviewed by a qualified professional (CPA, EA, or tax attorney) before filing.
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Exempt customer documentation and return treatment (https://comptroller.texas.gov/taxes/publications/96-122.php)
| Buyer / sale type | Tax treatment | Documentation to retain | Return treatment |
|---|---|---|---|
| Federal government | Exempt on qualifying purchases | Properly completed Form 01-339 or purchase voucher in the government entity name | Include tax-free sale in Total Texas Sales; exclude from Taxable Sales |
| Texas state/local government and public schools | Exempt on qualifying purchases | Form 01-339 or government purchase voucher; public school/government identity should be clear | Include in Total Texas Sales; exclude from Taxable Sales |
| Private school, college, university, church, religious/charitable nonprofit | Not automatically exempt; must have Comptroller exempt status | Properly completed Form 01-339 in the exempt organization name; authorized-agent purchases must identify the exempt organization | Include in Total Texas Sales; exclude from Taxable Sales only with support |
| Federally recognized tribal council or tribal-council-owned business | Treat as exempt federal instrumentality; individual tribe members are not exempt merely by status | Form 01-339 or comparable exemption documentation identifying the tribal entity, not an individual member | Include in Total Texas Sales; exclude from Taxable Sales only for entity purchases |
| Farm/ranch/agricultural production | Exempt only for qualifying items used directly in commercial agricultural/timber production | Form 01-924 with Ag/Timber Number for ag/timber exemption; do not use Form 01-339 for that exemption | Include in Total Texas Sales; exclude from Taxable Sales only for qualifying documented items |
| Resale | Exempt when purchased for resale | Properly completed resale certificate (Form 01-339 resale side) and purchaser sales tax permit / resale details | Include in Total Texas Sales; exclude from Taxable Sales |
| Shipped or delivered out of Texas | Not subject to Texas sales tax when destination is outside Texas; check destination-state nexus separately | Shipping records, bill of lading, delivery address, customer order, and invoice showing out-of-state destination | If included in Texas outlet gross receipts, include in Total Texas Sales and exclude from Taxable Sales as a destination deduction |
Form 01-114 exempt sales reporting (https://comptroller.texas.gov/taxes/audit/manuals/fundamentals/ch5.php)
| Return concept | Treatment |
|---|---|
| Form 01-114 Item 1 / Total Texas Sales | Report gross taxable and nontaxable sales for the outlet/reporting period, excluding separately collected sales tax. Tax-free sales are not omitted from total sales. |
| Form 01-114 Item 2 / Taxable Sales | Report only sales subject to Texas tax after supported deductions and exemptions. Exempt, resale, and supported out-of-state destination sales are excluded here. |
| Deductions / exempt-sales reconciliation | There is no separate universal deduction line in the basic return; Comptroller audit reconciles deductions as Total Sales minus Taxable Sales. Keep certificates and shipping records by transaction. |
| Tax-free sales holidays or statutory exempt items | Include only in Total Texas Sales, not Taxable Sales, unless Comptroller instructions for a special schedule say otherwise. |
Depends on
Other Texas computations in the OpenAccountants Tax Library.
Highly specialized drilling/production equipment taxability. Escalate to reviewer.
Tangible personal property table
| Pattern | Taxable? | Notes | |---|---|---| | General TPP (electronics, furniture, appliances, equipment) | TAXABLE | Tex. Tax Code Section 151.051 | | Clothing and footwear | TAXABLE | NO clothing exemption except during Sales Tax Holiday | | Clothing under $100 during August Sales Tax Holiday | EXEMPT | Tex. Tax Code Section 151.326 |
Food and beverages table
| Pattern | Taxable? | Citation | |---|---|---| | Grocery food (for home consumption) | EXEMPT | Sec. 151.314 | | Prepared food (heated, served with utensils) | TAXABLE | Sec. 151.314(c) | | Soft drinks / candy | TAXABLE | Sec. 151.314(b) | | Bakery items (unheated, no utensils) | EXEMPT | | | Dietary supplements | EXEMPT | | | Bottled water | EXEMPT | | | Ice | EXEMPT | | | Alcoholic beverages | TAXABLE | |
SaaS and digital goods table
| Pattern | Taxable? | Notes | |---|---|---| | Canned software (any delivery) | TAXABLE | Sec. 151.009 | | Custom software (any delivery) | TAXABLE | Unlike most states, TX taxes custom software | | SaaS (cloud-hosted) | TAXABLE | As data processing service -- 20% exemption applies | | Data processing services | TAXABLE (80%) | Only 80% of charge taxable; 20% exempt under Sec. 151.351 | | Streaming services | TAXABLE | As amusement services | | Digital books, music, movies (download) | TAXABLE | Treated as TPP |
Data processing 20% exemption critical note
Texas provides a 20% exemption for data processing services. Only 80% of the charge is subject to tax.
Services table
| Pattern | Taxable? | Citation | |---|---|---| | Amusement services | TAXABLE | Sec. 151.0028 | | Cable television | TAXABLE | Sec. 151.0033 | | Credit reporting / debt collection | TAXABLE | Sec. 151.0039 | | Data processing | TAXABLE (80%) | Sec. 151.0035; 20% exempt | | Information services | TAXABLE | Sec. 151.0038 | | Laundry/cleaning/garment services | TAXABLE | Sec. 151.0045 | | Motor vehicle parking/storage | TAXABLE | Sec. 151.0048 | | Nonresidential real property repair/remodeling | TAXABLE | Sec. 151.0048 | | Pest control | TAXABLE | | | Security services | TAXABLE | | | Telecommunication | TAXABLE | Sec. 151.0103 | | Waste/trash removal | TAXABLE | | | Professional services (legal, accounting, consulting, medical, engineering) | NOT TAXABLE | Not enumerated | | Residential construction labor | NOT TAXABLE | | | Residential real property services (cleaning, landscaping) | NOT TAXABLE | | | Advertising | NOT TAXABLE | | | Transportation/freight | NOT TAXABLE | | | Education | NOT TAXABLE | |
Manufacturing and exemptions table
| Pattern | Taxable? | Citation | |---|---|---| | Manufacturing equipment (directly in manufacturing) | EXEMPT | Sec. 151.318 | | Raw materials / ingredients for manufactured product | EXEMPT | Sec. 151.318 | | Farm/ranch machinery | EXEMPT | Sec. 151.316 | | Agricultural supplies (feed, seed, fertilizer) | EXEMPT | Sec. 151.316 | | Resale (Form 01-339) | EXEMPT | Sec. 151.302 | | Interstate commerce (shipped out of state) | EXEMPT | Sec. 151.307 | | Federal government | EXEMPT | Sec. 151.309 | | Prescription drugs | EXEMPT | Sec. 151.313 | | OTC drugs and medicine | EXEMPT | Sec. 151.313 -- Texas exempts OTC (unlike many states) | | Containers/packaging for resale goods | EXEMPT | Sec. 151.302(c) | | Newspapers/periodicals | EXEMPT | Sec. 151.320 |
Rate structure table
| Component | Maximum rate | |---|---| | State | 6.25% | | City | 2.00% | | County | 0.50% | | Transit authority | 1.00% | | Special district | Varies | | **Combined cap** | **8.25%** |
Sourcing table
| Scenario | Rate applied | |---|---| | Intrastate (seller and buyer both in TX) | Rate at seller's location (origin-based) | | Remote (out-of-state) sellers | Rate at buyer's ship-to address (destination-based) |
General taxability rule
All sales of TPP taxable unless specifically exempted. Only specifically enumerated services are taxable.Tex. Tax Code Section 151.051
Data processing / SaaS 20% exemption rule
SaaS and data processing services: only 80% of the charge is taxable. The 20% exemption applies automatically.Tex. Tax Code Section 151.351
Residential vs nonresidential classification rule
Nonresidential real property services are taxable. Residential real property services (cleaning, landscaping, repairs) are NOT taxable. Classification depends on property type, not customer type.
Forms table
| Form | Use | |---|---| | 01-114 | Standard sales and use tax return | | 01-117 | Short form | | 01-115 | Schedule A -- local tax detail | | 01-148 | Use tax return (purchasers) | | 01-339 | Exemption/resale certificate |
Due dates table
| Frequency | Due date | |---|---| | Monthly | 20th of following month | | Quarterly | April 20, July 20, October 20, January 20 | | Annual | January 20 |
Mandatory e-filing threshold
$50,000+
Economic nexus table
| Parameter | Value | | --- | --- | | Revenue threshold | $500,000 total Texas revenue for remote-seller safe harbor | | Transaction threshold | None | | Measurement period | Preceding 12 calendar months | | Sales included | Taxable and nontaxable sales of tangible personal property and services into Texas, including resale sales and sales to exempt entities | | Authority | Comptroller remote-seller guidance; Texas Tax Code Section 151.107; Rule 3.286 |https://comptroller.texas.gov/taxes/sales/remote-sellers-marketplace-faq.php
Penalties table
| Penalty | Rate | |---|---| | Late filing (1-30 days) | 5% of tax due | | Late filing (>30 days) | 10% of tax due | | Fraud | 50% of deficiency |
Vendor discount table
| Parameter | Value | |---|---| | Rate | 0.5% of tax due | | Maximum | $1,750/month for timely filers |
Record retention period
4 years from filing or due date.
Statute of limitations table
| Scenario | Period | |---|---| | Standard | 4 years | | No return | Unlimited | | Fraud | Unlimited | | 25%+ understatement | 6 years |
Exempt customer documentation and return treatment
| Buyer / sale type | Tax treatment | Documentation to retain | Return treatment | | --- | --- | --- | --- | | Federal government | Exempt on qualifying purchases | Properly completed Form 01-339 or purchase voucher in the government entity name | Include tax-free sale in Total Texas Sales; exclude from Taxable Sales | | Texas state/local government and public schools | Exempt on qualifying purchases | Form 01-339 or government purchase voucher; public school/government identity should be clear | Include in Total Texas Sales; exclude from Taxable Sales | | Private school, college, university, church, religious/charitable nonprofit | Not automatically exempt; must have Comptroller exempt status | Properly completed Form 01-339 in the exempt organization name; authorized-agent purchases must identify the exempt organization | Include in Total Texas Sales; exclude from Taxable Sales only with support | | Federally recognized tribal council or tribal-council-owned business | Treat as exempt federal instrumentality; individual tribe members are not exempt merely by status | Form 01-339 or comparable exemption documentation identifying the tribal entity, not an individual member | Include in Total Texas Sales; exclude from Taxable Sales only for entity purchases | | Farm/ranch/agricultural production | Exempt only for qualifying items used directly in commercial agricultural/timber production | Form 01-924 with Ag/Timber Number for ag/timber exemption; do not use Form 01-339 for that exemption | Include in Total Texas Sales; exclude from Taxable Sales only for qualifying documented items | | Resale | Exempt when purchased for resale | Properly completed resale certificate (Form 01-339 resale side) and purchaser sales tax permit / resale details | Include in Total Texas Sales; exclude from Taxable Sales | | Shipped or delivered out of Texas | Not subject to Texas sales tax when destination is outside Texas; check destination-state nexus separately | Shipping records, bill of lading, delivery address, customer order, and invoice showing out-of-state destination | If included in Texas outlet gross receipts, include in Total Texas Sales and exclude from Taxable Sales as a destination deduction |https://comptroller.texas.gov/taxes/publications/96-122.php
Form 01-114 exempt sales reporting
| Return concept | Treatment | | --- | --- | | Form 01-114 Item 1 / Total Texas Sales | Report gross taxable and nontaxable sales for the outlet/reporting period, excluding separately collected sales tax. Tax-free sales are not omitted from total sales. | | Form 01-114 Item 2 / Taxable Sales | Report only sales subject to Texas tax after supported deductions and exemptions. Exempt, resale, and supported out-of-state destination sales are excluded here. | | Deductions / exempt-sales reconciliation | There is no separate universal deduction line in the basic return; Comptroller audit reconciles deductions as Total Sales minus Taxable Sales. Keep certificates and shipping records by transaction. | | Tax-free sales holidays or statutory exempt items | Include only in Total Texas Sales, not Taxable Sales, unless Comptroller instructions for a special schedule say otherwise. |https://comptroller.texas.gov/taxes/audit/manuals/fundamentals/ch5.php
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