Introduction
Training your team in Texas just got more rewarding in 2025. Thanks to Texas Tax Code §151.3185, certain businesses can claim a refund on sales tax paid on wages used to train employees.
This little-known incentive is designed to boost workforce development and lower operating costs for tech, manufacturing, and startup employers investing in internal training programs.
Texas Code References
- Texas Tax Code §151.3185 – Refund for sales tax wages related to training
- Texas Administrative Code §3.330 – Details on refund eligibility
- Texas Workforce Commission (TWC) – May assist in compliance certification
What Qualifies for the Sales Tax Wage Refund?
Eligible businesses can claim a sales tax refund on wages paid to employees receiving training when:
- Training occurs on Texas soil
- Training is for improving job-related skills
- Employer paid state sales/use tax during the quarter
The maximum refund is limited to the amount of sales tax paid during the calendar quarter. You must apply within 1 year from the end of the quarter.
Example: Robotics Startup in Dallas
Example: NovaBots Inc. spends:
- $25,000 on employee training in Q2 2025
- Pays $7,300 in sales tax for that quarter (on purchases of materials, supplies, software)
NovaBots files a refund claim for the $7,300, substantiating that:
- Training occurred in Texas
- Was related to robotics engineering roles
- Payroll and tax receipts are included
Step-by-Step: Claiming the Refund in 2025
- Verify Eligibility
Ensure your training qualifies under job-related skill development. - Calculate Sales Tax Paid
Determine sales/use tax you paid for the quarter. - Gather Documentation
Include payroll, employee lists, training materials, and proof of in-state activity. - File Form 01-925
Use the Texas Comptroller’s refund form and submit within one year. - Retain All Supporting Records
Audit documentation should be kept for 4+ years.
Conclusion
Texas is quietly encouraging employers to invest in talent—with a direct sales tax refund for those who train in-house.
This is one of the few state programs that rewards both growth and compliance. Be sure to time your claim, track your payroll, and file before the deadline.
Call to Action
Training new hires or upskilling employees in 2025?
Book a consultation with Anshul Goyal, CPA, EA, FCA to:
- Review your refund eligibility under §151.3185
- Prepare a compliant wage and tax claim
- Maximize your return and meet the 1-year filing window
Training is an investment—get your taxes to reward it.
https://calendly.com/anshulcpa/
About Our CPA
Anshul Goyal, CPA, EA, FCA
Anshul brings 15+ years of U.S. and international tax experience. He specializes in helping online sellers, foreign founders, and U.S. residents with IRS and multi-state compliance. Known for his deep knowledge in Shopify and Amazon seller tax strategy, Anshul has helped hundreds of entrepreneurs minimize taxes and scale legally.
Disclaimer
This blog is for informational purposes only and does not constitute legal or tax advice. Please consult a qualified tax professional regarding your individual tax situation.
Anshul Goyal, CPA, EA, FCA, is a licensed Certified Public Accountant in the United States, admitted to practice before the IRS as an Enrolled Agent. He also represents clients in IRS litigation and specializes in helping U.S. and Indian businesses meet complex tax compliance requirements.
Top 5 High-Searched FAQs (2025)
1. What is the Texas §151.3185 refund?
A sales tax refund based on wages paid for in-state employee training.
2. Is there a cap on the refund?
Yes, limited to the amount of sales/use tax paid that quarter.
3. Who qualifies for this refund?
Businesses conducting job-relevant employee training in Texas.
4. What’s the deadline to file?
Within 1 year from the end of the quarter for which refund is claimed.
5. Can SaaS and tech startups claim this too?
Yes, if training is technical and Texas-based.