How to get a Texas sales and use tax permit

Who needs one

You need a Texas sales and use tax permit if you sell, lease or rent taxable goods or services in Texas: a store, a restaurant, a gas station, an online seller shipping into Texas, or a service business whose service is taxable. Each place of business gets its own outlet listed on the permit. A business with three stores has one taxpayer number and three outlets.

The permit matters beyond sales tax. In Texas the tobacco and e-cigarette retailer permits, the TABC alcohol permit, the Texas Lottery license and USDA SNAP authorization all expect a sales tax permit to exist first. That is why it is always the first filing for a new store.

What it costs

There is no fee for the permit itself. The Comptroller can require a security deposit (a bond or cash deposit) from some applicants, for example when the business or an owner has a history of unpaid state taxes or the business expects large tax collections. The Comptroller also will not issue a permit while any state tax is owed by the applicant, so an existing company should check its account first.

What you need to apply

• The legal name, Texas Secretary of State file number and federal EIN of the business.
• The name, address and Social Security number of every owner, partner, officer or managing member. Each person listed signs.
• The physical address of each location, the date of the first sale, and the type of business (its NAICS code).
• An estimate of monthly taxable sales, which helps the Comptroller set how often you file.

Filing in person at a Comptroller field office with a signed power of attorney (form 01-137) is usually the fastest route for a new store. Online applications through the Comptroller's eSystems are common too, and the AP-201 paper form still works by mail.

How long it takes

In person, the taxpayer number is often issued the same day. Online, expect about 2 to 3 weeks. Either way the paper permit arrives by mail about a week later. Post it where customers can see it. The new permit shows up in the Comptroller's Texas Taxpayer Search within a few days, and that public record is what other agencies check.

After the permit: returns

The permit comes with a filing schedule. The Comptroller assigns monthly, quarterly or yearly returns based on how much tax you collect. Returns are due on the 20th day of the month after the period ends, and a return is due even when there were no sales. Texas charges 6.25% state sales tax, and cities, counties and special districts can add up to 2% more, so the combined rate is up to 8.25%.

Late returns cost a penalty, and repeated missed returns can lead the Comptroller to suspend or revoke the permit. A revoked sales tax permit also pulls the other permits that depend on it into trouble at their next renewal.

Closing or selling the store

A sales tax permit does not transfer. When a store is sold, the seller closes the outlet and files a final return, and the buyer applies for its own permit. A buyer can also be held responsible for the seller's unpaid sales tax unless the buyer gets a certificate of no tax due from the Comptroller or withholds enough of the purchase price, so ask for it before closing.