Texas Sales Tax Economic Nexus & Remote Seller Guide

Texas imposes sales and use tax under Texas Tax Code Chapter 151, administered by the Texas Comptroller of Public Accounts. Following Comptroller Rule 3.286, Texas enforces an economic nexus safe harbor for out-of-state remote sellers.

1. The 12-Month Trailing Measurement Period

Unlike states that look strictly at calendar years, Texas measures sales on a rolling 12-calendar-month basis. Businesses must calculate gross sales at the conclusion of every month. Once gross receipts exceed $500,000, the seller must obtain a permit no later than the first day of the fourth month after the threshold was crossed.

2. Texas Single Local Use Tax Rate Option (1.75%)

Texas has a state sales tax rate of 6.25%, and local jurisdictions (cities, counties, transit authorities) can add up to 2.00% in local taxes (maximum 8.25%).

To simplify multi-jurisdiction reporting, the Texas Comptroller allows qualifying remote sellers to elect a flat Single Local Use Tax Rate of 1.75% across all shipments, eliminating the need to track individual local taxing jurisdictions. Total rate collected under this election is 8.00% (6.25% state + 1.75% local).

3. Nexus Connection to Texas Franchise Tax

Warning for corporate controllers: Under Texas Tax Code Section 171.0011, having economic nexus for sales tax purposes also creates nexus for the Texas Franchise Tax (Margin Tax) if Texas gross receipts exceed $500,000, requiring an annual franchise tax No Tax Due Information Report or Public Information Report.