Texas Use Tax Form and Tax Rates
The tax rate for sales tax and for use tax is the same. The Texas state sales and use tax is 6.25 percent, but local taxing jurisdictions (cities, counties, special purpose districts and transit authorities) may also impose sales and use tax up to 2 percent for a total maximum combined rate of 8.25 percent. If you purchase a taxable item, you will have to pay state and local use taxes.
Use and sales tax rates by city
A seller who uses catalogs or the internet to sell goods is treated the same as any other seller of taxable items. If you purchase merchandise through a catalog or online from a seller located in Texas, you owe Texas sales tax on the purchase. If you purchase merchandise through a catalog or online from a seller located outside of Texas and use the taxable item in Texas, you owe Texas use tax on the purchase. An out-of-state mail-order company or an internet company may hold a Texas Sales and Use tax permit and collect Texas tax. If the out-of-state seller does not have a Texas permit or does not collect Texas use tax, use tax is due and payable by the purchaser.
A seller who uses catalogs or the internet to sell goods is treated the same as any other seller of taxable items. If you purchase merchandise through a catalog or online from a seller located in Texas, you owe Texas sales tax on the purchase. If you purchase merchandise through a catalog or online from a seller located outside of Texas and use the taxable item in Texas, you owe Texas use tax on the purchase. An out-of-state mail-order company or an internet company may hold a Texas Sales and Use tax permit and collect Texas tax. If the out-of-state seller does not have a Texas permit or does not collect Texas use tax, use tax is due and payable by the purchaser.
Anyone who buys taxable goods and services that are stored, used or consumed in Texas from a seller who does not charge Texas sales tax owes Texas use tax.
Most Texas sellers collect sales tax and remit it to the Comptroller’s office. But when you buy items online or by telephone, email or fax from mail order catalogs, the seller may not, and may not be required to, collect Texas sales tax. If you buy the item for use in Texas, you owe Texas use tax.
For example, if you buy a shirt through an online auction from a seller in Ohio who does not charge Texas sales tax, or if a New York electronics store sells you a camera through its website and does not charge Texas sales tax, you owe Texas use tax on the price of the item.
Items bought in another country are also subject to Texas use tax. For example, if you buy something in Mexico that you bring back to Texas, you owe use tax on the purchase price.
Sometimes use tax is due even when you buy an item in Texas. If you buy an item in a part of Texas with no local taxes, you will pay state sales tax (6.25 percent) on that purchase. But if you use the item in an area that imposes a local tax, you owe that local use tax.
EXAMPLE: You live in Houston, have travelled to an area with no local tax and buy an item for $200 from a seller in that area. The seller only charges state sales tax of $12.50, or 6.25 percent. Since the use tax rate in Houston is 8.25 percent, you owe the 2 percent local use tax of $4.00.
If you have a sales tax permit and bought goods or services that are subject to use tax, report your purchase on your Texas sales tax return on line 3, “taxable purchases.”
If you do not hold a Texas sales and use tax permit and you bought items on which the seller did not collect Texas sales or use tax, report your purchases on Form 01-156, Texas Use Tax Return (PDF).
If you paid another state’s sales or use tax on the merchandise, you can take a credit for the amount of sales tax paid to the other state.
