Sales tax is an integral part of doing business in Texas, and understanding the process of sales tax registration is the first step toward compliance. In our earlier blog post, “Texas Sales Tax Basics: A Must-Know Guide for Business Owners,” we provided an introduction to the fundamentals of Texas sales tax. We also discussed the criteria that determine which businesses are required to get a Sales Tax Permit in Texas.
Let’s dive into compliances by getting to know the fundamental aspects of Texas sales tax registration to ensure that your business operates within the bounds of the law.
Creating Your Texas Comptroller Account
In the world of sales tax, the first crucial step is establishing your Texas Comptroller Account (an agency responsible for managing Sales Tax in Texas). This initial act not only paves the way for legal and financial compliance but also provides you with a foundational platform to navigate the complexities of Texas sales tax.
You have the flexibility to choose between two registration methods for your Texas sales permit: you can either complete the registration process online or opt for the mail-in application.
ONLINE REGISTRATION
Registering for a Texas Sales and Use Tax Permit online is a streamlined and convenient process. Below is a detailed, step-by-step walkthrough to assist you in commencing the process
Access the Texas Comptroller’s Website:
Start by visiting the Texas Comptroller of Public Accounts website at https://comptroller.texas.gov. You can access the registration portal from the “Sales Tax” section of the website.
Create an Online Account:
If you don’t already have one, you’ll need to create an online account. Look for a “Sign Up” or “Register” option on the website and follow the prompts to set up your account You can do this by clicking “MyCPA” on the homepage and following the registration prompts.
Login to Your Account:
Once your account is created, log in to your MyCPA account using your email and password.
Complete the Application:
Log in to your account and select the option to “Apply for a Permit via eSystem”. Click on it to start the online application.
Provide Business Information:
Fill out the application by supplying details regarding your business. This will include details about your legal business name, business structure, contact information, and the types of products or services you offer.
During the application process, you will also be queried about your online business status and, if necessary, your North American Industrial Classification System (NAICS) code will be assigned.
Provide Ownership Information:
You’ll need to supply information about the business owner or responsible party, including their name, Driver’s License, Social Security Number (SSN) or federal employer identification number (FEIN), and contact details.
Review and Submit Your Information:
Thoroughly examine the information you’ve furnished to verify its accuracy. Any errors or omissions can cause delays in the application process. Once you’re satisfied, submit your application.
Wait for Approval:
Once you’ve submitted your application, the Texas Comptroller will review your information. The approval process typically takes 2-3 weeks, but it can vary.
Receive Your Sales Tax Permit:
If your application is approved, you’ll receive your Sales and Use Tax Permit. This permit is an official document that signifies your legal authority to collect and remit sales tax in Texas.
Start Collecting Sales Tax:
With your permit in hand, you are now legally obligated to collect the appropriate amount of sales tax on taxable sales. You will need to file periodic sales tax returns, typically on a monthly or quarterly basis, as determined by the Texas Comptroller. These returns report the sales tax you’ve collected and remit the funds to the state.
OFFLINE REGISTRATION
Should you prefer not to file your application online, an alternative option is to download the application form, specifically, form AP-201 (Texas Application for Sales and Use Tax Permit). After completing the necessary paperwork, ensure to print it out and send the application to the following address by mail:
Comptroller of Public Accounts
111E. 17th Street
Austin, TX 78774-0100
Disclaimer:
The information provided in this content is for general informational purposes only. You should always seek the advice of an expert before making any decisions based on the information provided. We do not warrant or guarantee the accuracy, completeness, or usefulness of the information provided. Any reliance you place on such information is strictly at your own risk. We are not responsible for any damages, losses, or expenses related to the use of this content.
21 November 2023