What Is Texas Use Tax and When Do You Owe It?

Texas use tax is a tax you owe directly to the state when you buy a taxable item without paying Texas sales tax at the time of purchase and then use, store, or consume it in Texas. The rate matches the sales tax: 6.25% for the state, plus up to 2% in local tax, for a combined rate as high as 8.25%.¹ The classic trigger is buying something online, by phone, or on a trip out of state and bringing it home. In practice, platforms like Amazon and eBay now collect Texas tax on most sales, so the situations where the obligation actually lands on you are narrower than they used to be.

When You Still Owe Use Tax

Texas Tax Code Chapter 151 imposes the tax on the storage, use, or consumption of any taxable item purchased from a retailer when Texas sales tax was not collected.² Two changes have shrunk the pool of transactions that now reach the buyer. After South Dakota v. Wayfair, Texas adopted an economic nexus rule requiring any remote seller with more than $500,000 in Texas revenue over the prior 12 months to collect sales tax, and starting October 1, 2019, marketplace facilitators must collect and remit on all third-party sales delivered into Texas.³

What’s left for you to handle yourself usually falls into one of these buckets:

Private-party purchases from an individual in another state who is not a retailer.
Orders from small foreign or domestic sellers below the $500,000 economic nexus threshold who don’t sell through a major marketplace.
Taxable goods you buy while traveling in a state with no sales tax or a lower rate and then bring home.
Business equipment or inventory a company moves into Texas from another state.

Credit for Tax Paid to Another State

Texas does not double-tax the same purchase. If you already paid sales or use tax to another state on the item, that amount is credited against what you owe Texas.² If the other state’s rate was 6.25% or higher, you owe nothing at the state level, though local tax may still apply if your combined Texas rate exceeds what you paid. If the other state’s rate was lower, you pay Texas only the difference. Paid 4% elsewhere and the Texas rate where you use the item is 8.25%? You owe 4.25% here.

What’s Exempt

Use tax exemptions mirror sales tax exemptions. If an item is exempt from Texas sales tax, no use tax is due on it either. The categories most buyers run into:

Grocery staples such as bread, milk, eggs, fruits, vegetables, flour, and sugar. Prepared food, candy, and soft drinks generally are taxed.⁴
Over-the-counter medicines and dietary supplements labeled with a Drug Facts or Supplement Facts panel.⁴
Items bought for resale, when the buyer gives the seller a completed Form 01-339 (Texas Sales and Use Tax Resale Certificate). The tax is paid by whoever ultimately consumes the product.⁵

Vehicles, Boats, and Outboard Motors

Cars, trucks, boats, and outboard motors bought out of state and brought into Texas carry a 6.25% use tax, but you don’t file a use tax return for them. Instead, the tax is paid when you title or register the item. For boats and outboard motors, you have 45 working days after bringing the item into Texas to submit the title application and remit the tax to the Parks and Wildlife Department, an authorized agent, or a county tax assessor-collector.⁶ The credit for tax paid to another state applies here too.

How to Calculate What You Owe

Take the total purchase price, including shipping and handling, and multiply by the combined tax rate for the Texas location where you use or store the item. The state portion is always 6.25%, and local rates vary by city, county, and special-purpose district up to an additional 2%.⁷ The Comptroller’s Sales Tax Rate Locator returns the exact combined rate for any Texas street address.¹

Then subtract any sales tax you already paid to another state on the same item. On a $2,000 purchase stored where the combined rate is 8.25%, the full tax is $165. If you paid $100 in another state, you owe Texas $65.

How to File and Pay

The form depends on whether you already have a Texas sales tax permit. Without a permit, use Form 01-156, the Texas Use Tax Return, which is for any person or business not already permitted for Texas sales and use tax.⁸ If you hold a sales tax permit, report taxable out-of-state purchases on the “taxable purchases” line of your regular sales and use tax return (Form 01-114).⁹

Electronic filing and payment go through the Comptroller’s Webfile system, reached through the eSystems portal.¹⁰ Electronic check (ACH debit) is free. Credit card payments carry a convenience fee of $1.00 for payments up to $100, or 2.25% plus $0.25 for anything over $100.¹¹ On paper, print Form 01-156, complete it, and mail it with a check or money order to the Comptroller at 111 E. 17th Street, Austin, TX 78774-0100.⁸ Webfile payments must be submitted by 11:59 p.m. Central Time on the due date to count as timely.¹²

Penalties and Interest If You’re Late

The penalty escalates with time:

1 to 30 days late: 5% of the tax owed.
More than 30 days late: 10%.
After a formal Notice of Tax/Fee Due: an additional 10%, bringing the total to 20%.¹³

Past-due tax also accrues interest. The 2026 annual rate on delinquent tax is 7.75%.¹⁴ Penalties and interest stack.

Records and How Far Back the Comptroller Can Look

Keep purchase receipts, shipping invoices, proof of tax paid to other states, and copies of any returns for at least four years.¹⁵ That matches the Comptroller’s standard audit window: four years from the date the tax became due.¹⁶

The four-year clock has important exceptions. If you never filed a return, the limitations period never starts, and the Comptroller can assess tax at any time. The same applies to a fraudulent return or a return containing a gross error, meaning the tax due was understated by 25% or more.¹⁶ Ignoring the obligation entirely leaves the door open indefinitely.

If You’re Already Behind: Voluntary Disclosure

For buyers or businesses carrying years of unpaid use tax, the Comptroller offers a Fast-Track Voluntary Disclosure Agreement. You report and pay the tax owed for the past four years, and the Comptroller waives penalties and interest on those amounts and releases you from liability for anything older.¹⁷

The agreement has limits. If a prior audit turned up similar errors, the Comptroller will not grant it. And if you collected tax from customers and failed to remit it, the interest waiver does not apply. For most people sitting on an unreported balance, though, a VDA is the cheapest way to clear it before the Comptroller finds it first.

1
Texas Comptroller of Public Accounts. Sales and Use Tax
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State of Texas. Texas Tax Code Chapter 151 – Limited Sales, Excise, and Use Tax
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Texas Comptroller of Public Accounts. Remote Sellers and Marketplace Frequently Asked Questions
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Texas Comptroller of Public Accounts. Grocery and Convenience Stores
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Texas Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions – Resale Certificates
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Cornell Law Institute. 34 Texas Administrative Code 3.741 – Imposition and Collection of Tax
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Texas Comptroller of Public Accounts. Local Sales and Use Tax Collection – A Guide for Sellers
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Texas Comptroller of Public Accounts. Texas Use Tax Return
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Texas Comptroller of Public Accounts. Texas Sales and Use Tax Forms
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Texas Comptroller of Public Accounts. File and Pay
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Texas Comptroller of Public Accounts. Select A Payment Option
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Texas Comptroller of Public Accounts. Due Dates for Taxes, Fees and Information Reports
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Texas Comptroller of Public Accounts. Penalties for Past Due Taxes
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Texas Comptroller of Public Accounts. Interest Owed and Earned
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Texas Comptroller of Public Accounts. Texas Sales and Use Tax Frequently Asked Questions – Keeping Records
16
Cornell Law Institute. 34 Texas Administrative Code 3.339 – Statute of Limitations
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Texas Comptroller of Public Accounts. Fast-Track Voluntary Disclosure Agreement