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Do I Have Sales Tax Nexus in Texas?

  • Feb 28, 2016 | Laura McCamy

If you run your ecommerce business from a location in Texas, you know you have to collect and remit TX sales taxes on your in-state sales. Even if you are based in another state, however, you may have sales tax nexus in Texas. In the era of online sales, you could have nexus in places you have never even visited.

If you lease warehouse space or operate a satellite office in Texas, you have sales tax nexus in the state. If you have an employee or sales rep based there, that will also create nexus.

Even if you don’t have a warehouse in Texas, however, Amazon does. The online retail giant has seven fulfillment centers in Texas. If you use Fulfillment by Amazon (FBA), keep an eye on your Inventory Event Detail report to find out whether any of your products are warehoused in Texas. If so, you have sales tax nexus in the state. That means you will need to register and start charging sales tax when you ship to customers in the Lone Star State.

Texas does not have click-through or affiliate nexus, so you don’t have to worry about sales generated through affiliate marketers based in the state. Keep your eye on this one, though. Texas looked at a click-through nexus law in 2011, and the issue may come up again in the future as more and more states adopt similar regulations.

Texas is second only to California in terms of population. If your ecommerce business is thriving (and we hope it is), you’re probably doing business with customers in Texas. Having a clear understanding of whether you have sales tax nexus in Texas will help you avoid compliance headaches (plus interest and penalties) down the road.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Laura McCamy
Avalara Author Laura McCamy