Texas sales and use tax: 2026 rates, sourcing, nexus, exemptions and filing

Figures are for tax year 2026, as they stand on 25 September 2026. They come from the Texas Comptroller of Public Accounts at comptroller.texas.gov. Texas has no state personal income tax, but it does have sales and use tax (this Guide) and a franchise tax on businesses (not covered here). A short section at the end covers 2025 periods.

Scope and who this is for

• Businesses that sell goods or taxable services in Texas or to Texas customers, and must decide what to charge, which local tax applies, and how to file.
• Out-of-state sellers deciding whether they must get a permit (remote sellers, marketplace sellers, marketplace providers).
• Businesses that owe use tax because no Texas tax was charged on their purchases.
• Sellers accepting, and buyers giving, resale and exemption certificates (Form 01-339).
• Out of scope: Texas franchise tax (see the pointer under "When to refuse or refer"), motor vehicle sales tax, hotel occupancy tax, mixed beverage taxes, the 9-1-1 fees, and oil and gas equipment. The detailed taxability of food, clothing and software beyond the points below is also out of scope.

Ask the client first

• Does the business have any physical presence in Texas (office, store, warehouse, employees, representatives, inventory, services performed here)? Was it formed in Texas?
• If it is outside Texas: what was its total Texas revenue in the preceding 12 calendar months, counting taxable and nontaxable sales, resale and exempt sales, separately stated delivery charges, and marketplace sales?
• Does it sell through a marketplace provider, and has that provider certified that it collects Texas tax?
• What exactly does it sell: goods, SaaS or other data processing, information services, real property services, repair or remodeling (residential or nonresidential), or professional services?
• Where are orders received and fulfilled? Does it have a Texas "place of business" (three or more orders a year received there)? Where are goods delivered?
• Does it hold a permit for each place of business, and what filing frequency has the Comptroller assigned?
• Does it hold a properly completed Form 01-339 from each exempt or reselling customer? Has it bought taxable items for use in Texas without paying Texas tax?
• Were any returns late? Did it pay $10,000 or more in the preceding state fiscal year (electronic payment)?

The method, step by step

1. Decide whether the seller must hold a permit. A business engaged in business in Texas (physical presence, representatives, services performed here, or any of the other tests in Publication 94-108) must hold a permit before selling. A remote seller with no physical presence must get one once its total Texas revenue for the preceding 12 calendar months is outside the $500,000 safe harbor (remote sellers).
2. Classify each sale. Tangible personal property is taxable unless an exemption applies. Services are taxable only if they fall in one of the categories listed in Tax Code Section 151.0101 (Publication 96-259). Data processing (including SaaS) and information services are taxed on 80% of the charge.
3. Check exemption paperwork. Resale and exempt sales need a properly completed Form 01-339 in the seller's records. Federal and Texas government buyers are exempt by law; nonprofits only once the Comptroller has granted exempt status.
4. Find the rate. The state rate is 6.25%. Add local tax (city, county, special purpose district, transit) of up to 2%, for a combined maximum of 8.25% (Comptroller sales tax page). Use the sourcing rules below to decide which location's local tax applies.
5. Charge tax on the full sales price, including delivery and shipping charges on taxable items (collection FAQ). State the tax separately on the invoice unless the tax-included notice and sign rules are met.
6. Accrue use tax on your own taxable purchases on which no Texas tax was paid, as "taxable purchases" (Item 3) on the return (use tax FAQ).
7. File and pay by the 20th of the month after the period (the next business day if the 20th is a weekend or legal holiday), even with nothing to report. Take the 0.5% timely filing discount only if you file and pay on time (Comptroller sales tax page).
8. Keep records for at least four years, including every resale and exemption certificate (records FAQ).

Rates, sourcing and thresholds for 2026

Rates (Comptroller sales tax page; Publication 94-105)

Item	2026 value	Condition
State sales and use tax	6.25%	On retail sales, leases and rentals of most goods and on taxable services
Local sales and use tax	Up to 2% in total	Cities, counties, special purpose districts and transit authorities combined
Maximum combined rate	8.25%	"The local tax due cannot be more than 2 percent, so the most tax you can collect is 8.25 percent"
Use tax	Same rates as sales tax	State use tax plus local use tax at the ship-to location
Single local use tax rate (remote sellers only, by election)	1.75%	Replaces destination local tax; not available to Texas-based sellers or marketplace providers (remote sellers)

Local jurisdiction boundaries do not follow ZIP codes. Use the Comptroller's Sales Tax Rate Locator for the rate at a specific address.

Which local tax applies: sellers with a Texas place of business (Publication 94-105)

A "place of business" is a store, office or other location where sales personnel receive three or more orders in a calendar year from people other than employees, independent contractors and affiliates. Servers, websites and software applications are not places of business. A warehouse from which goods are shipped is not a place of business unless it meets the test itself.

If the order was...	...and it was...	Local sales tax is due at...
Received at a Texas place of business	Placed in person	The place of business where the order was received
Received at a Texas place of business	Not placed in person, and fulfilled at a Texas place of business	The place of business that fulfilled it
Received at a Texas place of business	Not placed in person, and not fulfilled at a Texas place of business	The place of business where the order was received
Not received at a Texas place of business	Fulfilled from a Texas place of business	The place of business that fulfilled it
Not received at a Texas place of business	Fulfilled from a Texas location that is not a place of business	The ship-to location
Any	Not fulfilled in Texas	No local sales tax; local use tax at the ship-to location

Then add local use tax when you deliver into a jurisdiction with a higher local rate, under these conditions:

• The 2% cap. Total local sales and use tax on one sale can never exceed 2%. If a local use tax cannot be collected at its full rate without going over 2%, do not collect it at all.
• Order. Add local use taxes in this order: city, county, special purpose districts, transit authorities.
• Same type. No local use tax of a type (for example, city) is due if a local sales tax of the same type is already due.
• The buyer pays what you do not collect. The customer owes the Comptroller any local tax the seller does not collect.

The Comptroller has agreed, under a temporary injunction, not to enforce its rule on orders not received by sales personnel while that rule is challenged in court. If the answer turns on that rule, refer. Publication 94-105 also has special rules (for example amusement services, florists, job-site repair work, itinerant vendors).

Remote sellers and marketplaces (remote sellers; remote seller and marketplace FAQ)

A remote seller is an out-of-state seller whose only activity in Texas is remotely soliciting sales. Anyone with a Texas location, salespeople or representatives is not a remote seller.

Rule	2026 position
Safe harbor	No permit or collection is needed if total Texas revenue is less than $500,000 in the preceding 12 calendar months
What counts	Gross revenue from taxable and nontaxable sales of goods and services into Texas, including separately stated handling, transportation and installation fees, sales for resale and sales to exempt entities. From 1 April 2020, marketplace sales count too, even when the marketplace provider collects the tax
Transaction count test	None
Lookback	The preceding 12 calendar months, a rolling test
Start date	Get a permit and begin collecting no later than the first day of the fourth month after the month the $500,000 safe harbor is exceeded
Local tax	Destination local use tax at the ship-to address, or the single local use tax rate (1.75%) if elected on Form 01-799
Ending collection	Only after 12 consecutive months in which Texas revenue for the preceding 12 calendar months was less than $500,000, using the Comptroller's termination web form. Collection resumes on the first day of the second month after any 12 consecutive months with revenue over $500,000

Exactly $500,000: check. The Comptroller's pages do not agree. The remote sellers page and FAQ give the safe harbor as revenue "less than $500,000", and the permit FAQ and Publication 94-105 say a permit is needed at "$500,000 or more". Publication 94-108 instead says "greater than $500,000". On most of the wording, a seller at exactly $500,000 is outside the safe harbor. Because Publication 94-108 reads the other way, get written confirmation from the Comptroller before relying on either reading.

Single local use tax rate election. A new remote seller elects on its permit application; an existing one files Form 01-799, effective from the start of a reporting period. A revocation received before 1 October takes effect on 1 January of the next year. One received on or after 1 October takes effect on 1 January of the year after that. A buyer charged the single rate when its own local rate was lower can claim a refund of the difference.

Marketplaces.

• A marketplace provider (an entity that owns or operates a marketplace and processes sales or payments for marketplace sellers) that is engaged in business in Texas must collect on all sales made through its marketplace, based on the shipping destination. A remote marketplace provider applies the same $500,000 safe harbor to all sales through its marketplace. Providers cannot use the single local use tax rate (marketplace providers and sellers).
• The provider must certify to its sellers that it will collect (no special form; the terms of use can do it). Without a certification, the seller should collect.
• A remote seller selling only through certifying marketplaces needs no permit, but must keep marketplace sales records for at least four years. A Texas-based seller always needs a permit and must file, even if it sells only through a marketplace.
• A remote seller under the safe harbor whose only Texas presence is inventory temporarily stored at a marketplace provider's facility needs no permit if the provider has certified that it will assume the seller's duties. Above the safe harbor, it must get a permit and collect.
• On the return, marketplace sales go in Item 1 (Total Texas Sales) but not in Item 2 (Taxable Sales) when the provider has certified that it collects.

Filing frequency and electronic payment (Comptroller sales tax page; TEXNET FAQ)

• Frequency. The Comptroller tells each new permit holder by letter whether it files monthly or quarterly. Yearly filers also exist. Follow the frequency on the account; call 800-252-5555 if unsure.
• Electronic payment. Taxpayers who paid $10,000 or more in a payment category in the preceding state fiscal year must pay electronically (TEXNET, Webfile, EDI or credit card). The Comptroller notifies them at least 60 days before the due date. Those who paid $500,000 or more must pay by TEXNET.
• Electronic filing. The TEXNET FAQ says certain tax types must be filed electronically if more than $50,000 was paid in the prior fiscal year; check the Comptroller's thresholds page for sales tax.
• Penalty. Payments that do not meet the electronic payment requirement carry a 5% penalty for each filing period.

What is taxable: boundary and exception table

Taxable services (Publication 96-259, Taxable Services)

Only the services in Tax Code Section 151.0101 are taxable. Services not on the list, such as legal, accounting, engineering and consulting, are not taxable.

Service	Treatment	Condition or exception
Data processing, including SaaS and application service providers	Taxable on 80% of the charge (20% exempt)	Word processing, data entry, storage, manipulation, web hosting and site maintenance, backup, check preparation, payables and receivables. Using a computer as a tool for a professional service (for example, preparing tax returns or original architectural plans) is not data processing
Information services	Taxable on 80% of the charge (20% exempt)	Newsletters, database subscriptions, market reports, mailing lists. Not taxable when sold to FCC-licensed radio or TV stations or to newspapers published daily, weekly or at other short intervals. Polygraph tests, seminars and medical lab tests are not taxable (Publication 94-109)
Real property services	Taxable, residential and nonresidential	Landscaping and lawn care, garbage collection, building or grounds cleaning and janitorial, structural pest control, surveying. Not taxable when bought by a homebuilder for a new residential structure, with certification (Publication 94-157)
Household services by a self-employed individual	Not taxable	Only traditional household services (housekeeping, babysitting, cooking) by a person who is the household's employee and not a subcontractor for a maid service. Pool cleaning is still taxable (Publication 94-111)
Nonresidential real property repair, restoration or remodeling	Taxable on labor and materials	Excludes adding new usable square footage and scheduled periodic maintenance. Property used as a family dwelling (including apartments, nursing homes and retirement homes) is not nonresidential
Residential repair and remodeling	Labor not on the taxable list	Under a separated contract, collect tax on the separately stated materials at the job site (Publication 94-105)
Personal property maintenance, repair and remodeling	Taxable	For example appliance, jewelry and furniture repair, dog grooming
Amusement, cable television, credit reporting, debt collection, insurance services, parking and storage, security, telecommunications, telephone answering, laundry and cleaning	Taxable	Each has its own conditions in Publication 96-259 and the Comptroller rules
Internet access	Not taxable when separately stated	Removed from the taxable list effective 1 July 2025 (SB 1405). Taxable when bundled with a taxable service unless the provider can support an allocation

Mixed charges (Publication 94-127):

• Separately stated. Tax only the taxable part, if the nontaxable service is distinct and commonly sold on its own, and the taxable charge is billed separately at a reasonable amount.
• 5% or less. A taxable service that is 5% or less of the contract price and not separately identified is not taxed.
• More than 5%. The whole charge is taxable unless the charges are shown separately (the nontaxable share can later be proved with documents). Travel expenses passed on are part of the taxable price.
• Multi-state use. Only the part used in Texas is taxable. A multi-state customer can give an exemption certificate and accrue Texas tax on its Texas share, using a reasonable allocation supported by its records.

Goods: selected points (Publication 96-280)

Item	Treatment	Condition
Food products (flour, sugar, bread, milk, eggs, fruit, vegetables)	Not taxable	Prepared food, hot food, and food sold with eating utensils are taxable
Soft drinks, candy and gum	Taxable	Drinks with milk or more than 50% juice are not soft drinks
Ice	Taxable	Includes dry ice
Prescription drugs	Not taxable	A drug or medicine without a Drug Facts label is exempt only if a physician prescribes or dispenses it. Drugs and medicines for animals are exempt only when bought with a veterinarian's prescription; other nonprescription animal drugs are taxable (Publication 94-155)
Over-the-counter drugs and dietary supplements	Not taxable	Drugs must carry an FDA Drug Facts panel, and only OTC drugs designed for humans qualify; supplements a Supplement Facts panel (or meet the other listed tests). CBD products do not qualify
Books and magazines	Taxable	Newspapers are exempt only if they meet all of Publication 96-280's tests
Clothing and footwear	Taxable, except during the August sales tax holiday	During the holiday, each eligible item sold for less than $100 is exempt. Athletic or protective clothing, clothing subscription boxes, rentals and accessories do not qualify (Publication 98-490)

Resale and exemption certificates: Form 01-339 (resale FAQ; Form 01-339)

• Two sides. The front is the resale certificate; the back is the exemption certification. The resale side needs the buyer's Texas permit number (11 digits) or, for out-of-state retailers, their home registration number.
• No "exemption number". Form 01-339 states: "Sales and Use Tax 'Exemption Numbers' or 'Tax Exempt' Numbers do not exist." The exemption side needs no number to be valid.
• A permit is not a certificate. A customer's permit number or a copy of the permit does not replace a resale certificate and does not relieve the seller of collecting tax.
• Blanket certificates. Allowed only when the customer buys exclusively for resale. Otherwise, a certificate is needed for each purchase, and mixed orders must show which items are for resale.
• What resale covers. Items resold as acquired or as part of other goods or a taxable service; goods bought to lease or rent; goods transferred to the customer in a taxable service. Resale must be in the United States or Mexico.
• The seller's duties. Check the certificate is complete; question it if the business would not normally resell the item; refuse it if you know or have reason to believe the item is not for resale. Keep it four years; sales without one are presumed taxable on audit.
• Later use. A buyer that uses resale stock owes tax on the purchase price or the fair market rental value for the period of use.
• Criminal penalties. Misusing a resale certificate is an offense, from a Class C misdemeanor (tax evaded under $20) up to a second-degree felony ($20,000 or more).
• Motor vehicles. The exemption certification cannot be used to buy, lease or rent a motor vehicle.

Who is exempt as a buyer (Publication 96-122):

• Federal and Texas state and local government entities are exempt by law and need not apply. Government entities of other states and foreign governments are not exempt.
• Nonprofits must apply to the Comptroller and receive exempt status before buying tax free. Only purchases related to the exempt purpose qualify. Employees and volunteers cannot buy personal items tax free.

Manufacturing exemption (Publication 94-124)

• Who qualifies. Manufacturers and sub-manufacturers that make, fabricate, assemble or process goods for sale. Contractors, repairers of others' property, and service providers such as data processors do not.
• What is exempt. Equipment used directly in, and essential to, manufacturing that causes a physical or chemical change in the product; ingredients and components; quality control testing; certain pollution-control equipment; chemicals and catalysts; gas and electricity for exempt equipment (subject to a predominant use study); safety apparel and work clothing required for manufacturing that the manufacturer buys but does not resell to its employees; packaging.
• What is not exempt. Hand tools; intraplant transportation (conveyors, forklifts, cranes, piping between machines); janitorial and office items; items used incidentally, for storage, or in sales and distribution; property rented or leased for less than one year; research and development items; manufacturing support equipment such as air conditioning.
• How to claim. The buyer gives the seller a properly completed Form 01-339 (back): buyer name and address, item description, reason for exemption, signature and date, and seller name and address.
• Divergent use. If exempt equipment bought less than four years ago is used for non-manufacturing purposes, tax is due monthly: 1/48 of the purchase price × the divergent-use percentage × the tax rate at purchase. No tax is due for a month in which divergent use is 5% or less. After four years, divergent use is not taxed.

The agricultural and timber exemptions need a separate registration number and are not covered here; refer.

Goods shipped out of Texas (exports FAQ; audit manual, chapter 5)

• Interstate sales. Goods that, under the sales contract, are shipped to a point outside Texas (including another US state) are exempt from Texas tax. Keep proof of the out-of-state destination: invoices with the shipping address, purchase orders, and bills of lading, freight invoices or parcel receipts (or delivery receipts if you deliver in your own vehicle).
• Not exempt if the goods are delivered to the buyer or its agent in Texas and later removed from Texas, or delivered to a carrier in Texas that is not operating under a commercial bill of lading.
• Return. Report these sales in Item 1 (Total Texas Sales) but not in Item 2 (Taxable Sales) (Form 01-922). Check whether the destination state requires you to collect its tax.
• Exports outside the United States. No Texas tax is due if the seller keeps proof (a licensed customs broker export certification, foreign import documents, or a qualifying bill of lading). If the customer takes delivery in Texas, tax is due; the seller may refund it against proof of export, kept for four years.

Worked cases (Publication 94-105; Comptroller sales tax page)

The amounts are illustrations. The local rates in case 1 are the ones given in Publication 94-105's own example.

1. Delivery from a store outside city limits. A furniture store in Navarro County, outside Corsicana city limits, takes an in-person order for a $1,000 table plus a $100 delivery charge. Delivery charges on taxable items are taxable, so tax is due on $1,100. The store collects state tax of 6.25% and Navarro County tax of 0.5%. For delivery into Ennis (1.5% city use tax), the local total is still under 2%, so it adds Ennis city use tax: 8.25% in all, $1,100 × 8.25% = $90.75. For delivery into Waxahachie (2% city tax), the Waxahachie tax cannot be added without exceeding the 2% cap, so none of it is collected: 6.75% in all, $1,100 × 6.75% = $74.25.
2. Remote seller over the safe harbor. An Oregon seller with no Texas presence was under the safe harbor until June 2026. For the 12 months ending 30 June 2026, it sold $300,000 into Texas through its website and $300,000 through marketplaces that certify they collect. The total of $600,000 is over $500,000, so the safe harbor stops applying in June 2026. It must hold a permit and collect on its website sales no later than 1 October 2026, the first day of the fourth month after June. The marketplaces keep collecting on their sales. If it elects the single local use tax rate, a $200 website order shipped to Texas carries 6.25% + 1.75% = 8%, or $16.00. In a later period with $30,000 of marketplace sales and $20,000 of taxable website sales, it reports $50,000 in Item 1 (Total Texas Sales) and $20,000 in Item 2 (Taxable Sales) (remote seller FAQ).
3. SaaS subscription. A Texas business pays $2,000 a month for SaaS used at its office, where the combined rate is 8.25%. SaaS is a data processing service, so 80% is taxable: $2,000 × 80% = $1,600. Tax is $1,600 × 8.25% = $132.00 a month (Publication 96-259).
4. Bookkeeper with some data entry. A bookkeeper charges a client $10,000 for an engagement. $400 of it is data entry (taxable data processing), not separately stated. That is 4% of the fee, which is 5% or less, so no tax is collected. If the data entry were more than 5% of the fee, the whole charge would be taxable unless the bookkeeper billed the data entry separately (Publication 94-127).
5. House cleaning. A maid service charges $200 to clean a home where the combined rate is 8.25%. Cleaning a home is a taxable real property service: $200 × 8.25% = $16.50. A housekeeper who is the household's own employee charges no tax (Publication 94-111).
6. Timely filing discount. A monthly filer owes $10,000 of tax and files and pays by the due date. Its discount is $10,000 × 0.5% = $50.00. Filed or paid late, it gets none (Form 01-922).
7. Prepayment. A monthly filer owes $2,500 for February 2026, due 20 March 2026. Last year's February tax was $1,700. To earn the extra 1.25% prepayment discount, it must prepay a reasonable estimate by the February prepayment date (the 15th, moved to 17 February in 2026 on the due dates chart): at least 90% of this period's tax ($2,250) or 100% of the same period last year ($1,700) (prepayment FAQ).
8. Late return. A monthly filer owes $2,000 for September 2026, due 20 October 2026. It files and pays on 5 December 2026, 46 days late. The penalty is 10%, or $200.00, plus the $50 late filing penalty: $250.00, and no discount. No interest is due, because interest starts on the 61st day after the due date (penalties).
9. Divergent use of manufacturing equipment. A manufacturer bought a machine for $48,000 with Form 01-339 where the rate was 8.25%. Within its first four years, in one month it runs the machine 10% of its hours on non-manufacturing work. Tax due for that month is 1/48 × $48,000 × 10% × 8.25% = $8.25. At 5% or less divergent use, nothing would be due (Publication 94-124).

When to refuse or refer

• Franchise tax. The Texas franchise tax is a separate privilege tax on taxable entities, with its own economic nexus rule. A remote seller or marketplace seller that is a taxable entity may owe it. See the franchise tax pages on comptroller.texas.gov or a franchise tax Guide.
• The exactly-$500,000 boundary. A remote seller whose Texas revenue is at or very near $500,000; get written confirmation from the Comptroller (Publication 94-108).
• Audits, assessments, hearings and refund claims. Refund claims must generally be made within four years of the date the tax became due and payable (Tax Code Sections 111.108, 111.201 and 111.207, cited on the Comptroller's interest page). Refer to a Texas CPA, EA or tax attorney.
• Local sourcing disputes involving orders not received by sales personnel (the rule under temporary injunction), combined areas, or multiple places of business.
• Contracts on real property: new construction, lump-sum versus separated contracts, and homebuilder certifications.
• Manufacturing exemptions in detail (predominant use studies for electricity, cleanrooms, production companies), and agricultural and timber exemptions.
• Software licensing and custom software, other than SaaS as a data processing service; this Guide does not cover it.
• Unfiled past periods or a client without a permit that should have had one. Ask about penalty waivers before filing.
• Motor vehicle, hotel occupancy, mixed beverage, 9-1-1 and oil and gas taxes.

Filing and payment

Permit (permit FAQ)

• Who needs one. Anyone engaged in business in Texas who sells, leases or rents goods or sells taxable services here, and out-of-state sellers outside the remote-seller safe harbor.
• How. Online through the Texas Online Tax Registration Application, or Form AP-201. No fee, but a security bond may be required.
• Scope. One permit per active place of business (same taxpayer number, separate outlet numbers). Not transferable: a change of ownership, including incorporating a sole proprietorship, needs a new permit.
• Duties. Post the permit, collect tax, pay tax on taxable purchases, report on time, keep records. A return is due even with no sales.

Due dates for 2026 (due dates)

Returns are due on the 20th of the month after the period. If the 20th is a Saturday, Sunday or legal holiday, the next business day is the due date. The 2026 chart already applies this.

Filer	2026 due dates
Monthly	20 Jan, 20 Feb, 20 Mar, 20 Apr, 20 May, 22 Jun, 20 Jul, 20 Aug, 21 Sep, 20 Oct, 20 Nov, 21 Dec
Quarterly	Q4 2025 due 20 Jan; Q1 due 20 Apr; Q2 due 20 Jul; Q3 due 20 Oct. Q4 2026 is due 20 January 2027 (check the 2027 chart for weekend or holiday shifts)
Yearly	Returns for the previous year are due 20 January
Sales tax prepayments	15 Jan, 17 Feb, 16 Mar, 15 Apr, 15 May, 15 Jun, 15 Jul, 17 Aug, 15 Sep, 15 Oct, 16 Nov, 15 Dec

Mailed checks must be postmarked by the due date. TEXNET payments above $1,000,000 must be started by 8 p.m. CT on the banking business day before the due date.

The return (Form 01-922 instructions)

• Form 01-114 is the standard return. Businesses with more than one outlet, prepayers, remote sellers, marketplace providers and others must use the long form and supplements (01-115 outlet supplement, 01-116 list supplement). Form 01-117 is the short form (sales tax forms).
• Item 1, Total Texas Sales. All sales, services, leases and rentals made in Texas, including sales into Texas from outside, excluding tax.
• Item 2, Taxable Sales. Only taxable sales. Exempt, resale and certified marketplace sales are in Item 1 but not Item 2.
• Item 3, Taxable Purchases. Purchases for your own use on which no tax was paid, including items taken from resale stock.
• Credits. Taking a credit (for example tax paid in error) needs Form 01-148, the Credits and Customs Broker Schedule. Bad debt credits must be filed electronically.
• Use tax without a permit. Report on Form 01-156, Texas Use Tax Return; tax paid to another state can be credited (use tax FAQ).
• Amendments and extensions. Amend on a return marked "Amended Return" and pay any extra tax with penalty and interest. No filing extensions exist except in declared disaster areas.

Discounts (Comptroller sales tax page; prepayment FAQ)

Discount	2026 rate	Conditions
Timely filing	0.5% of the tax timely reported and paid	Return and payment both on time. The Comptroller's pages and return instructions state no dollar cap
Prepayment	1.25%, in addition to the 0.5%	Monthly or quarterly filers only. Prepay a reasonable estimate (at least 90% of the current period's tax, or at least 100% of the tax for the same period last year) by the 15th of the month (monthly) or the 15th of the second month of the quarter (quarterly); file a prepayment report if paying by mail; file the return by its due date and pay the balance

The prepayment discount applies only if all prepayment requirements are met and the return and any additional payment are on time.

Penalties and interest (penalties; interest)

Charge	2026 rule
Late payment, 1 to 30 days	5% of the tax
Late payment, more than 30 days	10% of the tax
Paid after the date on a Notice of Tax Due	A further 10%, for a total of 20%
Late return	$50 for each return filed after the due date, even if no tax is due
Interest	Starts on the 61st day after the due date. The rate is prime plus 1%: 7.75% for 2026 (8.50% for 2025). Interest = tax × rate × days ÷ 365 (366 in a leap year)
Not paying electronically when required	5% for each filing period
Failure to collect	The seller owes the tax it should have collected, plus penalties and interest (local tax FAQ)

The Comptroller's own interest example: $1,000 owed at 7.75% for 150 days gives $31.85 of interest. Continued non-payment can lead to liens, permit suspension, asset seizure and criminal charges. Missing records can lead to an estimated assessment; keep them at least four years, and longer during an audit, appeal or refund claim (records FAQ).

2025 periods (for amended or audited 2025 returns) (Comptroller sales tax page; interest)

• Unchanged. The Comptroller's current pages describe the rates, the 2% local cap, the $500,000 safe harbor, the discounts and the late penalties as standing rules, with no 2026 change.
• Interest. Tax due in 2025 carries interest at 8.50%.
• Internet access. Separately stated internet access has not been taxed since 1 July 2020; SB 1405 removed it from the taxable services list from 1 July 2025 (Publication 96-259).
• Due dates. Use the 2025 due dates chart for weekend and holiday shifts.

Completion checklist (Comptroller sales tax page)

• Nexus decided: engaged in business in Texas, or a remote seller outside the $500,000 safe harbor (all channels, including marketplace, exempt and resale sales); exactly $500,000 confirmed with the Comptroller.
• Permit held for each place of business (remote sellers: by the first day of the fourth month after crossing); marketplace certifications on file.
• Each sale classified, with the 80% base for data processing (including SaaS) and information services, and residential vs nonresidential work.
• Local tax sourced by place of business, with local use tax up to the 2% cap, or destination or single local use tax rate (1.75%) for remote sellers.
• Form 01-339 held for every resale and exempt sale, kept for four years; no reliance on "exemption numbers".
• Manufacturing exemptions limited to qualifying items; divergent use tracked monthly.
• Use tax accrued in Item 3.
• Return filed and paid by the 20th (or the next business day), including zero returns; paid electronically if required.
• 0.5% discount only on timely returns; 1.25% prepayment discount only if every condition was met.
• Any late period costed: 5% or 10% penalty, $50 per late return, interest from the 61st day at 7.75% for 2026.