The Austin MTA transit tax is a 1% local sales tax collected inside the Capital Metropolitan Transportation Authority (CapMetro) service area. It sits on top of the 6.25% Texas state sales tax and the 1% Austin city tax, which brings the combined rate on most taxable purchases to 8.25%.1Texas Comptroller of Public Accounts. Sales and Use Tax You don’t file it separately. It rides along on the regular Texas sales and use tax return, with a jurisdiction code that routes the penny per dollar to CapMetro instead of the city’s general fund.
How the 1% Fits Into the Total Rate
Texas caps the local portion of sales tax at 2%. Austin already uses one of those pennies for the city, so CapMetro’s 1% fills the cap.1Texas Comptroller of Public Accounts. Sales and Use Tax A $100 taxable sale at a retailer inside the service area produces $6.25 for the state, $1.00 for the city, and $1.00 for CapMetro. Because the local cap is already maxed, no other special-purpose district can add to the rate on that same sale.
Where the Transit Tax Applies
The service area is wider than the Austin city limits and narrower than the metro. It covers several communities that voted to join the transit district plus specific unincorporated pockets of Travis and Williamson counties. In Williamson County, that includes Anderson Mill, Jollyville, and Pond Springs in the southern unincorporated area. Parts of unincorporated northwestern, central, and northeastern Travis County are inside the boundary as well.2Texas Comptroller of Public Accounts. Transit Sales and Use Tax
Not every nearby city participates. Two businesses a few miles apart can collect different local rates depending on which side of the boundary they sit on. If you aren’t sure, verify your location with the Comptroller’s local tax rate lookup before you start charging.
What Isn’t Subject to the Tax
The transit tax piggybacks on the state sales tax, so anything exempt from Texas sales tax is also exempt from the 1% CapMetro portion. The common exemptions:
- Most unprepared groceries: bread, milk, eggs, produce, flour, sugar, and multi-pack snack items.3Texas Comptroller of Public Accounts. Grocery and Convenience Stores
- Over-the-counter drugs required by the FDA to carry a “Drug Facts” label.3Texas Comptroller of Public Accounts. Grocery and Convenience Stores
- Unflavored water, milk-based drinks, coffee beans, tea bags, and juices with more than 50% fruit or vegetable content.3Texas Comptroller of Public Accounts. Grocery and Convenience Stores
- Sales to state, local, and federal government bodies and Texas independent school districts, which are exempt without needing to apply.4Texas Comptroller of Public Accounts. Texas Tax-Exempt Entity Search
Prepared food sold with utensils, candy, and non-food items like paper products and beauty supplies stay taxable at the full 8.25%.3Texas Comptroller of Public Accounts. Grocery and Convenience Stores
Who Has To Collect It
Any business selling, leasing, or renting taxable goods or services inside the CapMetro boundary collects the transit tax from the buyer. Texas uses origin-based sourcing for local sales, so the rate is tied to where the seller receives the order, not where the buyer takes delivery. If a customer phones in an order to your Austin storefront and you ship it elsewhere in Texas, you still collect Austin-area local taxes on it.5Texas Comptroller of Public Accounts. Local Sales and Use Tax Collection – A Guide for Sellers
Remote sellers follow a destination rule and a revenue threshold. A seller based outside Texas only has to collect local use tax after exceeding $500,000 in total Texas revenue in the prior twelve calendar months. Once you cross that line, you must get a Texas permit and start collecting by the first day of the fourth month after the threshold was passed.6Texas Comptroller of Public Accounts. Remote Sellers
How To File and Pay
You report the transit tax on the Texas Sales and Use Tax Return (Form 01-114), the same return that covers state tax and every other local jurisdiction you collected for.7Texas Comptroller of Public Accounts. Texas Sales and Use Tax Forms For each jurisdiction, enter taxable sales and the correct code. The code for Austin Capital Metro Transit is what sends the 1% to CapMetro instead of the city.
Filing goes through the Comptroller’s Webfile system, accessed through eSystems.8Texas Comptroller of Public Accounts. File and Pay You can pay by ACH debit from a business account, credit card, or mailed check. Electronic payment clears faster and gives you a confirmation number on the spot.
Deadlines
The Comptroller assigns your filing frequency when you get your permit, based on the size of your tax liability. Larger businesses file monthly, mid-sized ones file quarterly, and the smallest file annually. Monthly returns are generally due on the 20th of the following month. In 2026, the June, September, and December deadlines shift because the 20th falls on a weekend: June moves to the 22nd, September to the 21st, and December to the 21st.9Texas Comptroller of Public Accounts. Due Dates for Taxes, Fees and Information Reports Quarterly filers submit in January, April, July, and October.
Electronic payments must land in Webfile by 11:59 p.m. Central on the due date. A paper check is on time if it carries a due-date postmark.9Texas Comptroller of Public Accounts. Due Dates for Taxes, Fees and Information Reports Keep the confirmation number. It’s your proof of a timely filing if an auditor ever asks.
Discounts for Filing on Time
Filing and paying in full by the due date lets you keep 0.5% of the tax due as a timely-filing discount. Monthly and quarterly filers can claim an additional 1.25% prepayment discount by estimating liability and paying early. The prepayment has to equal at least 90% of the tax ultimately owed, or at least what you paid for the same period in the prior year. Monthly prepayers submit by the 15th of the current month; quarterly prepayers submit by the 15th of the second month of the quarter. Stacked, the two discounts let a prepayer keep up to 1.75% of the tax collected.10Texas Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions
Penalties for Missing a Deadline
A late return triggers a flat $50 penalty no matter how small the balance. Late payments add a percentage on top:
- 1 to 30 days late: 5% of the tax due.
- More than 30 days late: 10% of the tax due.
Interest starts accruing 61 days after the due date. For 2026, the annual rate is 7.75%, set at the prime rate plus one percentage point.11Texas Comptroller of Public Accounts. Interest Owed and Earned A business owing $5,000 that pays 45 days late would face the $50 filing penalty, a $500 late-payment penalty, and interest starting two weeks after that. Penalties apply to the full return, so you can’t carve out the CapMetro piece and pay only that on time.1Texas Comptroller of Public Accounts. Sales and Use Tax
Records You Have To Keep
Hold on to all sales and use tax records for at least four years: invoices, receipts, deposit records, point-of-sale reports, resale certificates, and exemption certificates. You can’t destroy them earlier without written authorization from the Comptroller.12Texas Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions If you’re under audit, in appeal, or have a refund claim pending, keep the relevant records until the case is closed.
The item that trips up businesses most often is a missing resale or exemption certificate. If you can’t produce one for a sale you treated as exempt, the auditor will reclassify that sale as taxable and bill you for the state tax, the city tax, the transit tax, and the penalties on all of it.12Texas Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions