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Texas sales tax rules explained in a minute - Will's Whiteboard

  • Jun 2, 2016 | Will Frei

Are you doing business in the great state of Texas? Are you planning to do business there? If so, check out this video to learn the basics of Texas sales tax laws in about a minute.


Hi, welcome to Will’s Whiteboard. I’m Will. It’s no secret that the State of Texas is one of the biggest and the baddest in the U.S. The same is true of its sale tax law. So to help you wrap your mind around some of the unique features of Texas sales tax law, I’m going to go over some of the highlights, and I’m going to do it in about a minute. You ready? Here we go.

State sales tax rate in Texas is 6.25%, but if you add on local taxes it can get as high as 8.25% so don’t forget about those. When it comes to Nexus, or the connection you can have with Texas that gives you the obligation to collect sales tax, here’s an interesting wrinkle: if you work with Texas affiliates or if you keep inventory in Texas, you will likely have Nexus and should be registered there to collect sales tax.

What about filing? If in the previous year you’ve remitted over $10,000 to the State of Texas in sales and use taxes, then the next year you have to file electronically.

Here’s a Texas gotcha when it comes to sales tax: Texas says if you sell digital goods and those goods in physical form would be taxable, then the digital goods are also taxable. Example, if CDs are taxable in the state of Texas, that same music sold digitally would be taxable as well. Hope this helps you understand Texas sales tax. I’ll talk to you next time.

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
Will Frei
Avalara Author Will Frei
Will Frei directs social media and blogging for @avalara. He is on a mission to help make sales tax less taxing for businesses of all kinds.