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Texas Sales Tax 2022 for Businesses: A Complete Guide

“Government authorities in Texas, United States, collect 6.25% sales tax from businesses.”

What Does The Texas Sales Tax 2022 For Businesses Mean?

All businesses selling, leasing, renting, or acquiring taxable goods and services apply for the Texas Sales Tax Permit.

It is mandatory for a business dealing with out-of-state suppliers that do not hold this permit.

You will have to visit the official website of The Comptroller of Texas Government to submit your application through eSystems.

How Much Is The Sales Tax For Businesses in Texas?

The State Government of Texas collects 6.25% sales tax from businesses.

Local taxing jurisdictions can order businesses to pay 2% additional sales tax.

Cities, counties, SPDs (Special Purpose Districts), and transit authorities fall in the category of local taxing jurisdictions.

Time is money for a businessman.

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By the end of this Strategy Session, you will have a clear understanding of the next steps you can take for your business to take advantage of the tax deductions you are missing out on.

You must know some more things about it.

Make sure you value collecting state and local use taxes equally.

Business owners should collect information about collecting and reporting Local Sales and Use Tax Rates.

You can refer to 94-105 Local Sales and Use Tax Collection – A Guide For Sellers to learn more about it.

The guide is available on the official website of The Comptroller of Texas Government.

The collection of sales and use tax is performed at the same time.

Sales Tax in Texas Threshold Limit
6.25% $500,000 economic sales threshold limit

Read More: Mississippi Sales Tax 2022 for Businesses: A Complete Guide

Do You Need To Collect Texas Sales Tax For Your Ecommerce Business?

All businesses having physical and economic nexus in Texas must collect sales tax.

E-commerce businesses having an office, team, a distribution place, a warehouse, and space for sales or samples in Texas qualifies for sales tax collection.

Do you have another place to conduct your corporate activities? Don’t worry! Your business still qualifies to collect this tax.

E-commerce businesses exceeding the threshold limit of $500,000 can collect this tax.

What Types Of Goods And Services Are Taxable Under Texas Sales Tax?

Many types of goods and services are taxable in Texas. For example

  • Amusement and entertainment services.
  • Construction businesses charging for materials separately are also a part of this list.
  • Credit reporting, data processing, debt collection, information, internet access, personal, real property, security, telecommunication, telephone answering, utility, transmission, distribution, vehicle parking or storage, repair, restoration, remodeling of personal and nonresidential real property repair, SaaS and taxable labor services are taxable in Texas.
  • Registration and reporting of Texas Sales and Use Tax:

You can register for it through the eSystems of the Texas government.

The state government of Texas has determined an eligibility criterion to make the registration process easy.

  • The Eligibility Criteria:

You must be of 18 (minimum age) years.

Parents or legal guardians can submit applications on behalf of a minor.

Are you a sole owner, partner, officer, or director? Who are you? Don’t you have a social security number?

Don’t worry! You can fill AP-201 form and the Texas Application form and email them at Sales.applications@cpa.texas.gov. 

Alternatively, you can fax your application to 512-936-0010 to apply for it.

The List of Essential Documents Required:

You should keep the following documents by your side during the registration process:

  • SSN (Social Security Number) for a sole owner and officers or directors of the corporation.
  • Partnership social security numbers or federal employers’ ID numbers of all partners.
  • Texas Corporation’s file number. You will get it from the Texas Secretary of State to get it.
  • NAICS (North American Industrial Classification System) Code.

How often do you need to file a sales tax return in Texas?

The State Government of Texas allows you to file and remit sales tax monthly, quarterly and yearly. The due date is always the 20th of every month during the reporting period.

The process of payment can be accomplished through the following mediums:

  • Electronic check with web file.
  • Electronic check with EDI.
  • TEXNET.
  • Credit card with Web file.
  • Paper check.

You can file and remit your sales tax the next business day if the due date falls on a weekend or a holiday.

What happens if you do not file sales tax by the due date?

Make your payments on time to avoid a $50 penalty and loss of prepayment discounts.

5% extra fine is levied for late payment electronically.

The choice of your payment method depends on the amount of sales tax you are to pay.

Need Assistance With Texas Sales Tax 2022?

We have dedicated our wealth of time and tax and accounting skills to helping many global corporate bigwigs.

From skills to the team of financial, tax, and accounting experts, we have everything to exceed your requirements and expectations to help keep your business in the good books of the state government of Texas.

Message or phone us anytime.

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