Sales Tax in Texas: A Complete Guide for Ecommerce Sellers

Texas has a $500,000 economic nexus threshold (among the highest in the country) and a maximum combined rate of 8.25% (6.25% state + up to 2% local). Texas is not an SST state, so sellers register directly with the Texas Comptroller. The state has active sales tax enforcement and requires Texas-issued resale certificates for B2B sellers.

Quick reference

Economic nexus

Texas uses a $500,000 threshold measured on a trailing 12-month basis, not a calendar year. The trailing 12-month window means the calculation is continuous: every month, look back 12 months and compare total Texas revenue to $500,000.

There is no transaction count threshold in Texas. Only the dollar amount matters.

Once the $500,000 threshold is crossed, registration is required before the next sale. Texas takes the position that the collection obligation begins immediately upon crossing the threshold, there is no grace period.

Physical nexus

Physical presence in Texas creates nexus from day one:

• Office or place of business in Texas
• Warehouse or distribution center (including third-party logistics)
• Amazon FBA inventory in Texas fulfillment centers
• Employees or independent contractors in Texas
• Sales representatives in Texas

Texas has historically been aggressive about identifying sellers with physical presence and ensuring they’re registered.

Registration

Register at the Texas Comptroller’s website (comptroller.texas.gov → Sales and Use Tax → Apply for Permit). Registration is free. Permits are typically issued within a few days.

Texas issues a Sales and Use Tax Permit. Remote sellers registering for economic nexus may be assigned to quarterly filing initially.

Tax rates

State rate: 6.25%

Local rates: Cities, counties, transit authorities, and special districts can each levy up to 2% combined (no single category can exceed the combined 2% local cap). The maximum combined rate in Texas is 8.25%.

Major city combined rates: Austin, Dallas, Houston, and San Antonio are all at or near 8.25%.

Texas provides a rate lookup tool through the Comptroller’s website for address-level verification.

What’s taxable

Generally taxable: Most tangible personal property, electronics, clothing, furniture, toys, sporting goods, home goods.

Generally exempt:

• Prescription medications
• Most food items for home consumption (groceries)
• Agricultural equipment and supplies (with certification)
• Newspapers and magazines by subscription
• Manufacturing equipment used directly in production (with exemption certificate)

Notable Texas rules:

• Clothing: Taxable in most circumstances (unlike states with clothing exemptions). Texas has a sales tax holiday on clothing items under $100 annually.
• Digital products: Texas taxes most digital products, including electronic books, digital music, streamed entertainment, and downloaded software
• SaaS: Texas taxes SaaS (software as a service) — treated as a taxable data processing service
• Internet access: Exempt under the federal Internet Tax Freedom Act

Shipping taxability

Texas taxes shipping and delivery charges when the items being shipped are taxable. If the shipped items are exempt, the shipping charge is also exempt.

This applies to separately stated shipping charges as well as shipping included in the sale price.

Marketplace facilitator rules

Texas enacted marketplace facilitator legislation effective October 1, 2019. Qualifying marketplace facilitators (including Amazon, Etsy, Walmart, and eBay) collect and remit Texas sales tax on sales made through their platforms.

A remote seller whose only Texas sales are through marketplace facilitators does not need to register in Texas if they have no other Texas nexus. Sellers with physical nexus in Texas must register regardless of marketplace collection.

B2B and resale certificates

Texas has specific requirements for resale exemption certificates. Texas purchasers claiming resale exemption should provide a Texas Sales and Use Tax Resale Certificate (Form 01-339). Texas does not accept out-of-state resale certificates in place of the Texas-specific form.

The Comptroller’s office actively audits resale exemptions. Sellers accepting resale certificates without verification of the buyer’s Texas Sales Tax Permit Number may face liability if the certificate is invalid.

State-specific notes

Trailing 12-month threshold: Unlike states using a calendar year, Texas uses a rolling 12-month window. A seasonal seller who crosses $500K in the spring may be over the threshold in summer but under it by December, threshold monitoring requires monthly calculation, not annual.

Sales tax holidays: Texas holds an annual back-to-school sales tax holiday (late August) for clothing and school supplies under $100, and a separate emergency preparedness holiday. Sellers need to plan for these exemptions in their calculation engine.

Strong enforcement: Texas has historically been an active sales tax enforcement state. Sellers with physical presence that delay registration are more likely to receive compliance correspondence from the Comptroller’s office than in less-active states.