Introduction
Businesses in Texas that sell taxable goods or services must collect and remit sales tax to the state. The Texas Comptroller’s Office requires businesses to file sales tax returns either monthly, quarterly, or annually, depending on revenue.
Filing your Texas sales tax return online is the fastest and most efficient method to stay compliant and avoid penalties. This guide provides a step-by-step process to file your Texas sales tax return through the Comptroller of Public Accounts eSystems portal.
Who Needs to File a Texas Sales Tax Return?
Any business that:
- Sells taxable goods or services in Texas.
- Has a Texas Sales and Use Tax Permit.
- Collected sales tax from customers.
- Purchased taxable goods without paying sales tax (use tax applies).
Texas Sales Tax Rates
| Tax Type | State Tax Rate | Local Tax Rate | Total Maximum Rate |
|---|---|---|---|
| State Sales Tax | 6.25% | Up to 2% | 8.25% |
| Use Tax | 6.25% | Up to 2% | 8.25% |
Local jurisdictions (cities, counties, and transit authorities) can impose additional sales tax, but the total cannot exceed 8.25%.
When Are Texas Sales Tax Returns Due?
The due date depends on your business’s taxable sales volume:
| Filing Frequency | Who Must File? | Due Date |
|---|---|---|
| Monthly | Businesses collecting over $500 per month in sales tax | 20th of the following month |
| Quarterly | Businesses collecting $500 or less per month | April 20, July 20, October 20, January 20 |
| Annually | Businesses collecting $1,000 or less per year | January 20 |
If the due date falls on a weekend or holiday, the deadline is extended to the next business day.
Step-by-Step Guide to Filing Texas Sales Tax Online
Step 1: Log Into the Texas eSystems Portal
- Go to the Texas Comptroller eSystems website.
- Click on “Sales Tax Webfile”.
- Enter your 11-digit taxpayer number and Webfile number (found on your sales tax permit).
Step 2: Select the Filing Period
- Choose the reporting period you are filing for (monthly, quarterly, or annual).
Step 3: Enter Total Sales and Taxable Sales
- Report gross sales (total revenue including non-taxable items).
- Enter taxable sales (sales subject to Texas sales tax).
- Calculate the total tax due based on the applicable tax rate.
Step 4: Report Sales Tax Collected
- Enter the sales tax collected from customers.
- Break down sales by local tax jurisdictions (if applicable).
Step 5: Claim Any Deductions or Exemptions
- Resale or wholesale sales – Sales to tax-exempt buyers (resellers, government, nonprofits).
- Out-of-state sales – If the item was shipped outside of Texas.
- Returned goods or sales tax refunds.
Step 6: Review and Submit the Return
- Double-check all figures and deductions for accuracy.
- Click “Submit” to file your return electronically.
- Print or save a copy of the confirmation for records.
Step 7: Make a Payment
- Pay sales tax due using ACH transfer, credit/debit card, or check.
- Electronic payments are required if your business owes more than $10,000 in sales tax per year.
How to Pay Texas Sales Tax
| Payment Method | Processing Time | Fees |
|---|---|---|
| ACH Debit | 1-2 business days | Free |
| Credit/Debit Card | Immediate | 2.25% fee applies |
| Paper Check | 5-7 business days | Free |
To avoid penalties, payments must be received by the due date.
What Happens If You Don’t File or Pay Sales Tax?
| Violation | Penalty |
|---|---|
| Late Filing | 5% penalty if late 1-30 days; 10% if more than 30 days late |
| Failure to Pay | 10% penalty plus daily interest charges |
| Underreporting Sales Tax | Additional fines and possible audit |
If you miss a deadline, file the return and pay as soon as possible to minimize penalties.
Can Businesses Claim Texas Sales Tax Discounts?
Yes. Texas offers a small tax discount to businesses that file and pay on time.
- 0.5% discount if sales tax is paid on or before the due date.
- An extra 1.25% discount for businesses that prepay 100% of the tax due for the next reporting period.
Common Mistakes to Avoid When Filing Texas Sales Tax
- Missing filing deadlines – Even if no tax is due, you must file a $0 return.
- Failing to collect sales tax – All taxable sales must include sales tax charged to customers.
- Underreporting taxable sales – Can result in penalties or an audit from the Texas Comptroller.
- Not claiming deductions correctly – Ensure exempt sales and deductions are properly documented.
How to Handle a Texas Sales Tax Audit
The Texas Comptroller’s Office may audit businesses if:
- Sales tax filings show large discrepancies.
- The business regularly files late or underreports tax.
- A random audit selection occurs.
To avoid problems:
- Keep sales tax records for at least four years.
- Maintain invoices, receipts, and tax-exempt certificates.
- Work with a CPA to ensure compliance.
Conclusion
Filing a Texas sales tax return online is quick, efficient, and necessary to stay compliant. Businesses must collect and remit sales tax on time to avoid penalties and audits.
For expert guidance on Texas sales tax compliance, schedule a meeting with our CPA Anshul Goyal by clicking at https://calendly.com/anshulcpa/ now.
Frequently Asked Questions (FAQs)
1. When is Texas sales tax due?
- Monthly: 20th of the following month.
- Quarterly: April 20, July 20, October 20, January 20.
- Annually: January 20.
2. Can I file a Texas sales tax return for free?
Yes, filing through the Texas Comptroller’s eSystems portal is free.
3. What if I didn’t collect sales tax for a period?
You must still file a $0 return to avoid penalties.
4. What happens if I file Texas sales tax late?
A 5% penalty applies if late up to 30 days, and 10% if more than 30 days late, plus interest.
5. Should I hire a CPA to handle Texas sales tax?
Yes, a CPA can help businesses file correctly, claim deductions, and avoid audits.