Texas Sales Tax and Use Tax
What is the Texas sales tax?
Taxes in Texas are origin-based 1, meaning the Texas sales tax rate is based, or determined from, the location where a sale originates
To see a full breakout of Texas sales tax rates by state, county, city and special district, use our easy Texas sales tax calculator. After putting in any ZIP code, you can enter a retail price to calculate Texas sales tax totals.
What is the Texas use tax?
The Texas state use tax rate is the same as the state, county, city and special district rates.
If you reside in TX, use tax is due to the state on any and all transactions where sales tax has not been paid, even out-of-state internet sales.
Who has to pay Texas sales tax or use tax?
In general, a business must collect and remit all applicable Texas sales taxes if that business has nexus, a physical presence such as a brick-and-mortar location, within a given state. The presence of an employee or salesperson, delivery by the seller's vehicle, and storage of materials usually establishes nexus as well.
Texas says that an out-of-state seller is required to collect tax if they can be defined as a "retailer engaging in business". Texas has certain additional laws establishing nexus for other reasons such as out-of-state businesses using in-state affiliates, advertisers or vendors, or businesses that make internet sales or mail catalogs.
If you are not sure if you have established nexus in Texas, you can usually get free help by contacting the Texas Comptroller of Public Accounts. Click here for an updated listing of direct phone numbers. You could also contact a qualified certified public accountant or lawyer who specializes in tax law in Texas. Click here for listing of recommended resources.
Special rules applying to Texas sales tax and use taxes
- Shipping is taxable.
- Finance charges are exempt from sales tax, when stated separately.
- Clothing is taxed at the same rate as the general sales tax.
- Texas Sales tax holidays are held for Energy Star items as well as some back to school items.
Since Texas legislators can vote to change the Texas sales tax and use tax rates at any time, it is very difficult for individuals to keep track of the changes. The population of TX state is also rapidly changing, which can cause frequent updates to the ZIP codes and local municipality names and complicates the job of keeping track of Texas sales tax jurisdictions.