To get a sales tax permit in Texas, file Form AP-201 with the Texas Comptroller of Public Accounts through the eSystems online portal. There is no application fee, the form takes roughly 15 to 20 minutes to complete, and your physical permit arrives in the mail about two to three weeks later. You need the permit before you make your first taxable sale in the state.
Do You Need a Permit
You need a Texas sales and use tax permit if you are an individual, partnership, corporation, or other legal entity engaged in business in Texas and you sell or lease tangible personal property or sell taxable services. Out-of-state sellers need one once their total Texas revenue exceeds $500,000 in the preceding 12 calendar months, counting taxable, exempt, and resale transactions.1Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions2Texas Comptroller of Public Accounts. Engaged in Business
One boundary worth knowing before you apply. If every sale you make goes through a marketplace like Amazon, eBay, or Walmart, the marketplace provider collects and remits the tax, not you. You only need your own permit if you also sell through other channels, such as your own website or in-person events. Keep the marketplace’s tax-collection certification in your records.3Texas Comptroller of Public Accounts. Marketplace Providers and Marketplace Sellers
What to Gather Before You Start
Form AP-201 asks for the same information whether you file online or on paper, so pull it together first.4Texas Comptroller. Texas Application for Sales Tax Permit and/or Use Tax Permit
- Identification numbers. Sole owners give a Social Security number. Partnerships need an SSN or Federal Employer Identification Number for each partner. Corporations supply the FEIN plus an SSN for each officer or director.
- NAICS code for your business activity. If you don’t have one, look it up on the U.S. Census Bureau site.
- The date you will begin, or began, making sales in Texas.
- An estimate of monthly taxable sales, specifically whether you expect them to exceed $8,000. The Comptroller uses this to set your filing frequency.
- Names, SSNs or FEINs, and positions of each officer, partner, or managing member.
- The street address of every Texas location where you sell taxable items. List each one.
- The name of your business bank.
Signing the application affirms the information is true and correct to the best of your knowledge. Check every number and name before you submit; errors slow processing.
How to File
Online Through eSystems
The fastest route is the Comptroller’s eSystems portal. Create a user profile, complete the digital version of AP-201, and submit. Online applications generally process in two to three weeks.5Texas Comptroller. Texas Online Tax Registration Application
Paper Application by Mail
If you would rather file on paper, download AP-201, complete and sign it, and mail it to:
Comptroller of Public Accounts
111 E. 17th St.
Austin, TX 78774-0100
Paper filings take about four weeks from the date the Comptroller receives a complete, signed form. Incomplete applications take longer.6Texas Comptroller. Instructions for Sales Tax Application
Fees and Security Bond
There is no fee. Depending on your circumstances, the Comptroller may require you to post a security bond, and if so you’ll be notified during the application process.1Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions
When Your Permit Arrives
The state mails you a physical Sales and Use Tax Permit. Display it prominently at your place of business. The permit is not transferable, so if you move locations or the ownership of the business changes, you will need to update your registration or reapply.1Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions
Buying Inventory Tax-Free
Holding the permit lets you buy inventory for resale without paying sales tax at the register. Give your supplier a completed resale certificate, Form 01-339, listing your business name and address, your 11-digit Texas sales tax permit number, a description of the items you are buying, and a description of your business activity. Sign the certificate and hand it to the supplier. Do not send it to the Comptroller.7Texas Comptroller. Sales and Use Tax Resale Certificate / Exemption Certification
If you later use one of those items yourself instead of reselling it, you owe sales tax on it as of the date you start using it. Issuing a resale certificate for goods you know at the time of purchase are not for resale is a criminal offense, ranging from a Class C misdemeanor to a second-degree felony depending on the amount of tax evaded.
Penalties for Selling Without a Permit
Selling taxable goods or services in Texas without a permit is a criminal offense. A first violation is a Class C misdemeanor punishable by a fine of up to $500. With a prior conviction for the same offense, subsequent violations are Class B misdemeanors with fines up to $2,000. Each day of unpermitted operation counts as a separate offense, so fines stack quickly.8State of Texas. Texas Tax Code 151.708 – Selling Without Permit; Criminal Penalty