Texas Sales Tax Filing Update October 2019
What's changing in Texas?
Texas has passed a law requiring Marketplaces to collect and remit sales tax on sales facilitated through the marketplace effective October 1, 2019.
- Amazon, eBay, Etsy and Walmart began this collection on October 1, 2019.
- You can view the state's guidance document here.
How does this affect me?
If you sell through a Marketplace that has agreed to begin collection in this state, you'll see sales tax collected in, for sales on and after October 1, 2019 on your TaxJar Dashboard and on your Texas Transactions page.
- If you have never set up a filing frequency for Texas in your account's State Settings, our system will default the state to a monthly frequency and due date on your Dashboard after we see tax collected there. (We default to a monthly frequency and due date if you haven't yet adjusted any frequencies on your end, but the state itself would ultimately determine your exact filing frequency.)
- If you are currently opted in to receive email reminders for your sales tax due dates, you'll also see Texas listed as a state where you have an upcoming monthly return due in those emails.
I've never registered for a Texas license. Do I need to register for a sales tax license in Texas now?
No, if all your sales are Marketplace-only sales, then a remote seller does not need a permit.
- A remote seller must have received and accepted in good faith a certification that the marketplace will collect sales and use tax. The seller must retain require records of all marketplace sales.
Please note, if you are a retailer with a physical presence in Texas or you are a remote seller who has crossed the economic nexus threshold for Texas ($500,000/year in gross revenue in the previous calendar year), then you will need to register for a Texas sales tax license.
- If you've imported your sales across all platforms into your TaxJar account, you can determine if you have economic nexus in the state by running the Sales & Transactions Checker.
- If you do not meet any of the criteria that create nexus in Texas, you won't need to register for a sales tax license in this state.
I have already registered for a license in Texas and all of my sales are Marketplace-only sales. Should I cancel my existing registration?
Yes, if all your sales are Marketplace-only sales then Form 01-798, Remote Seller's Intent to Terminate Use Tax Responsibilities (PDF) must be completed by remote sellers to terminate their Texas use tax responsibilities.
- A "remote seller" cannot have a physical presence or representative in the state.
- A remote seller that terminates its use tax responsibilities must resume collection on the first day of the second month following any 12 calendar months in which total Texas revenue exceeds $500,000. See Rule 3.286, Seller's and Purchaser's Responsibilities, for more information.
Do I need to collect taxes on my Texas sales on other platforms?
Yes, if you have nexus in the state (physical or economic) and you make sales to customers in Texas on platforms outside of the marketplace that is automatically collecting and remitting, you will also need to collect tax on your end on the Texas orders that are processed on the other platforms.
Do I still need to file returns in Texas?
Yes. Once you register for a license, you will be required to file a return based on the frequency the state has assigned you.
- If you've previously registered, the state expects you to remain registered and continue to file returns.
I still need to file returns in Texas. How do I do this without paying double tax on the sales that were collected and remitted by my Marketplace?
When you file, you'll include Marketplace Sales in your Total Texas Sales. You can use your TaxJar Reports to view your Marketplace Sales amount.
- Then, you'll exclude your Marketplace Sales from "Taxable Sales" and also exclude Marketplace Sales from "Amount subject to local tax."
If all of your sales are Marketplace sales, once you deduct the marketplace sales, you will need to file a $0 return.
- If you make sales on other platforms in addition to the Marketplace, you'll need to make sure you remit the tax you collected for those sales when you file.
- If you're enrolled in AutoFile for Texas, our system will handle the Marketplace sales deduction process automatically.
How does this affect my TaxJar Report for Texas?
Your Texas Sales Tax Report will be updated in early November 2019 (when returns for sales after October 1, 2019 are due) to specifically reflect sales that had tax collected and remitted by Marketplaces that are supported as Marketplace Facilitators in TaxJar Reports.
- These changes will be similar to the Report updates for other states where the Marketplace Facilitator collects tax automatically.