To get a reseller permit in Texas, apply for a Sales and Use Tax Permit through the Comptroller’s eSystems portal. The application is free, takes about 15 minutes online, and the permit typically arrives in two to three weeks.1Texas Comptroller. Texas Online Tax Registration Application Once you have it, you can collect sales tax from customers and issue resale certificates to suppliers so you can buy inventory tax-free.
Do You Need One
You need a permit if you’re engaged in business in Texas and you sell, lease, or rent taxable goods, provide taxable services, or buy taxable goods from out-of-state suppliers who don’t hold a Texas permit.2Texas Comptroller of Public Accounts. Sales Tax Permit Requirements Texas charges 6.25 percent state sales tax on most retail sales, and local jurisdictions add up to 2 percent on top.3Texas Comptroller. Sales and Use Tax
Taxable services include data processing, security, telecommunications, debt collection, insurance, and certain repair and remodeling work. If you provide any of these, you need the permit even if you never touch a physical product.
Physical Presence in Texas
A warehouse, office, storefront, or employee working in the state creates physical nexus. The Comptroller requires a separate permit for each place of business, and each permit is tied to that specific person and location.4State of Texas. Texas Tax Code Chapter 151 – Section 151.201 Permits can’t be transferred between owners or locations.
Remote Sellers
You don’t need a Texas storefront to trigger registration. Remote sellers with more than $500,000 in total Texas revenue over the preceding twelve calendar months must register. After crossing the threshold, you have until the first day of the fourth month after the month you exceeded it to obtain your permit and begin collecting tax.5Texas Comptroller of Public Accounts. Remote Sellers
Selling taxable items in Texas without a permit is a criminal offense, starting at a Class C misdemeanor for a first violation and escalating from there.6State of Texas. Texas Tax Code 151.708 – Selling Without Permit Since applying costs nothing, there’s no reason to wait.
What to Gather Before You Apply
Have these ready before you open the application. Missing pieces will stall you:
- Tax identification: Social Security number for sole proprietors, or a Federal Employer Identification Number (FEIN) for corporations, LLCs, and partnerships.
- Secretary of State file number, if your entity is registered with the Texas Secretary of State.
- NAICS code describing your primary business activity. You can look this up on the Census Bureau’s website.
- The date you will begin or began making sales or providing services in Texas.
- Your accounting method (cash or accrual).
- Names and addresses of all owners, partners, or corporate officers.
- Physical and mailing addresses, even if they’re the same.
- Bank account information, which may be requested if you’ve held a Texas permit before or if your application is flagged for extra review.
The paper equivalent of the application is Form AP-201, on the Comptroller’s forms page.7Texas Comptroller of Public Accounts. Texas Sales and Use Tax Forms Most applicants won’t need to download it because the online form collects the same information.
How to Submit the Application
Online
The fastest route is the Comptroller’s eSystems portal.8Texas Comptroller of Public Accounts. About eSystems Create a user profile, enter your business details, and sign electronically. The portal walks you through each section so it’s hard to skip a required field. Online applications typically process in two to three weeks.1Texas Comptroller. Texas Online Tax Registration Application
By Mail
If you prefer paper, complete Form AP-201 and mail it to the Comptroller in Austin. A person authorized to bind the business must sign it by hand. Paper takes longer, often four to six weeks depending on volume. Use a trackable shipping method since you’re mailing sensitive identifiers.
The Cost
The permit itself is free.9Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions In some cases the Comptroller requires a security bond before issuing the permit. The bond amount is the greater of $100,000 or four times your estimated average monthly tax liability, with a $500 minimum for itinerant vendors.10Legal Information Institute. 34 Texas Administrative Code 3.327 – Taxpayer’s Bond or Other Security Bonds are usually imposed when the applicant has a history of tax delinquency or when the business model presents elevated collection risk. First-time applicants with clean records generally aren’t asked for one.
After Approval
The Comptroller reviews every application and contacts you at the details you provided if anything is missing. Once approved, you receive a physical permit in the mail along with your unique eleven-digit tax identification number.
You must display the permit conspicuously at your place of business.9Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions Each location needs its own displayed permit.4State of Texas. Texas Tax Code Chapter 151 – Section 151.201
The approval letter also assigns your filing frequency: monthly, quarterly, or yearly, based on expected tax liability.3Texas Comptroller. Sales and Use Tax Yearly filers must submit their report by January 20 each year.
Using the Resale Certificate
The reason to hold this permit is the ability to buy inventory without paying sales tax at purchase. You give your supplier a completed Texas Sales and Use Tax Resale Certificate, Form 01-339, which requires your eleven-digit Texas permit number, a description of what you’re buying, a description of your business, and your signature.11Texas Comptroller of Public Accounts. Form 01-339 Sales and Use Tax Resale Certificate / Exemption Certification
The certificate is only valid for items you genuinely intend to resell, lease, or rent. You can hold items for demonstration or display while waiting to sell them, but the moment you use a resale-purchased item for another purpose, you owe sales tax on it based on the purchase price or fair market rental value at the time you start using it.
What the Certificate Does Not Cover
A resale certificate does not cover anything your business consumes rather than resells. Office supplies, equipment, furniture, cleaning products, tools, and employee uniforms worn on the job are all taxable to you at purchase. Buying operational supplies under a resale certificate is one of the most common audit triggers.
Penalties for Misuse
Knowingly using a resale certificate to buy items you don’t intend to resell carries penalties that scale with the tax you avoided:
- Less than $20 avoided: Class C misdemeanor
- $20 to under $200: Class B misdemeanor
- $200 to under $750: Class A misdemeanor
- $750 to under $20,000: third-degree felony
- $20,000 or more: second-degree felony
These tiers come from Tax Code § 151.7075 and also apply when a purchaser uses a resale certificate and later cannot produce records showing the items were resold.12State of Texas. Texas Tax Code 151.7075 – Failure to Produce Certain Records After Using Resale Certificate Keep clean records of every resale-certificate purchase and the sale that followed it.
Keeping the Permit in Good Standing
Once your permit is active, you must file sales tax returns on schedule even if you had zero taxable sales during the reporting period.9Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions A missed return, even a zero-dollar one, triggers a $50 penalty per late report, on top of any interest or additional penalties for unpaid tax.13Texas Comptroller of Public Accounts. Late Filing Penalty – Publication 98-918
The permit itself doesn’t expire as long as you remain engaged in business. But if you stop filing, the Comptroller may cancel it, and back penalties still stand. If you close the business, formally close the permit through the Comptroller and file a final return covering your last period of activity.