Texas Sales Tax for LLCs — Rates, Collection & Filing

If your Texas LLC sells taxable goods or services, you are required to collect sales tax from customers and remit it to the Texas Comptroller. Texas has one of the higher combined sales tax rates in the country, with a 6.25% state rate plus up to 2% in local taxes. This page covers everything your LLC needs to know. For the complete tax picture, see our Texas LLC tax guide.

Texas Sales Tax Rates

The combined rate varies by location. Houston, Dallas, San Antonio, and Austin all charge the maximum 8.25%. Rural areas may be lower.

What Is Taxable in Texas

Taxable (must collect sales tax):

• Tangible personal property (physical goods) — clothing, electronics, furniture, food items (non-grocery), etc.
• Certain services specifically listed in Tax Code Chapter 151, including:
• Data processing services
• Information services
• Internet access services
• Insurance services
• Cable/satellite TV
• Amusement services
• Debt collection
• Security services
• Telephone answering services
• Credit reporting
• Real property repair and remodeling (labor)
• Pest control

Exempt (do not collect sales tax):

• Most professional services (legal, accounting, consulting, marketing, medical)
• Groceries (unprepared food items sold for home consumption)
• Prescription drugs and over-the-counter medicine
• Agricultural items sold for production use
• Manufacturing equipment purchased for production
• Items purchased for resale (with valid resale certificate)

Getting Your Sales Tax Permit

If your LLC sells taxable goods or services, you must obtain a Texas Sales and Use Tax Permit before making any taxable sale.

How to apply:

1. Go to https://comptroller.texas.gov/
2. Navigate to "Sales Tax Permit Application"
3. Complete the application online (free — no fee for the permit itself)
4. Processing time: typically 2-3 weeks for the physical permit to arrive by mail
5. You receive a temporary permit to begin collecting immediately upon online submission

Important: The sales tax permit is free. Any website or service charging you a fee to "get" a Texas sales tax permit is unnecessary — apply directly with the Comptroller at no cost.

Collecting and Remitting Sales Tax

Collection: Add the applicable combined rate (state + local) to every taxable sale. The rate is based on the location where the sale occurs (or where the item is delivered for shipped goods).

Filing frequency: The Comptroller assigns your filing frequency based on expected sales volume:

• Monthly: If you collect more than $500/month in sales tax
• Quarterly: If you collect $100-$500/month
• Annually: If you collect less than $100/month

Due dates:

• Monthly: 20th of the following month
• Quarterly: 20th of the month following the quarter end (April 20, July 20, October 20, January 20)
• Annually: January 20

Filing: Use the Comptroller's WebFile system at https://comptroller.texas.gov/

Timely filing discount: If you file and pay on time, you can keep 0.5% of the tax collected (up to $500/month) as a collection allowance.

Use Tax

If your LLC purchases taxable items from out-of-state sellers who did not collect Texas sales tax, you owe use tax at the same rate. This commonly applies to:

• Online purchases from retailers without Texas nexus
• Equipment purchased from out-of-state suppliers
• Supplies ordered from catalogs

Report and pay use tax on your regular sales tax return.

FAQ

Does my LLC need a sales tax permit if I only sell services?

Only if you sell one of the specifically taxable services listed in Tax Code Chapter 151. Most professional services (consulting, legal, accounting, medical, marketing) are exempt from Texas sales tax and do not require a permit. When in doubt, check the Comptroller's taxability guide for your specific service.

What if I sell online to Texas customers from out of state?

If your out-of-state LLC has "economic nexus" in Texas (more than $500,000 in Texas sales in a 12-month period), you must collect and remit Texas sales tax on sales to Texas customers. Register for a Texas sales tax permit if you meet this threshold.

Can I absorb the sales tax instead of charging customers?

No. Texas law requires that sales tax be passed to the consumer. You cannot advertise "tax included" prices that effectively absorb the tax. You may include tax in the stated price, but the receipt must separately state the tax amount.

What happens if I collect sales tax but do not remit it?

This is a serious offense. Collected sales tax is considered state funds held in trust. Failure to remit constitutes theft of state money. Penalties include 5% (1-30 days late) to 10% (31+ days late), plus 10% additional penalty for audit assessments, interest, and potential criminal charges for willful failure.

Do I charge sales tax on shipping?

If the item being shipped is taxable, delivery/shipping charges are also taxable in Texas. If the item is exempt, shipping charges are exempt. Handling charges are always taxable.