Once you have a Texas sales tax permit, the Comptroller expects a return from you on every due date, whether you sold anything or not. Filing and paying online takes a few minutes when your books are in order, and the steps are the same every period.
If you're still working out whether you need a permit, what rate to charge or how often you file, start with my guide to Texas sales tax and come back here when it's time to file.
What you need before you file Texas sales tax online
Have these ready before you log in:
- Your 11-digit Texas taxpayer number
- Your Webfile number, which you'll find on letters and notices from the Comptroller
- Total sales for the period, from your books or point-of-sale reports
- Taxable sales for the period, which is the part of your sales you charged tax on
- Taxable purchases, meaning items you bought for your business without paying Texas sales tax (this is use tax, and many small businesses have none)
- Your business bank account details, if you're paying by bank debit
Pull the numbers from reconciled books, not from bank deposits. Deposits include sales tax you collected, card processing timing and transfers, so they almost never match your actual sales.
Step by step: filing and paying through Webfile
Webfile is the Comptroller's free online system for filing and paying sales tax. You reach it through the Comptroller's eSystems login.
1. Log in to eSystems
Create an account the first time, then log in and choose Webfile for sales and use tax.
2. Enter your Webfile number and choose the period
Enter the Webfile number from your notice and select the reporting period you're filing. Check that the period matches your assigned filing frequency, whether that is monthly, quarterly or annual.
3. Report total sales
Enter your total Texas sales for the period. This includes everything you sold, taxable or not.
4. Report taxable sales and taxable purchases
Enter the sales you charged tax on, then any taxable purchases. Leave out the sales tax itself; you report sales before tax, and Webfile calculates the tax from them.
5. Check the local tax
If you have one location, Webfile applies your local rates for you. If you sell from more than one location, report each one separately so the local tax goes to the right city, county and districts.
6. Review the total and pay
Webfile shows the tax due, including the timely filing discount when you file and pay on time. Pay by bank debit or by credit card. Card payments go through a processor that charges a fee, so bank debit is usually the better choice.
7. Save the confirmation
Download or print the confirmation page and keep it with your sales reports for that period. If the Comptroller ever questions a return, that confirmation is your proof that you filed and paid.
Total sales vs taxable sales: an example
The line that confuses people most is total sales versus taxable sales. I've kept the books for gas stations and truck stops, and they show the difference well. Fuel is not subject to sales tax, but snacks, drinks and supplies in the store usually are.
| Item | Amount for the quarter |
|---|---|
| Fuel sales | $180,000 |
| Taxable store sales | $40,000 |
| Total Texas sales (reported) | $220,000 |
| Taxable sales (reported) | $40,000 |
Both numbers go on the return. Reporting only taxable sales, or reporting total sales as taxable, are both mistakes that show up later as a notice from the Comptroller.
Hotels have a similar split. Room revenue is not reported as sales tax; it falls under hotel occupancy tax, which is a separate return. Food, gift shop and other taxable sales still go on the sales tax return. Restaurants also need to keep alcohol sales in mind, since mixed beverages have their own taxes and reports.
Filing deadlines and zero returns
Returns are due on the 20th day of the month after the reporting period. If the 20th falls on a weekend or a holiday, the due date moves to the next business day.
You must file even when you had no sales. A missed zero return carries the same $50 late filing fee as any other late return, and paying more than 30 days late raises the penalty from 5% to 10%. The full list of penalties and discounts is in my Texas sales tax guide.
Common mistakes when you pay sales tax online
- Reporting bank deposits as sales instead of using the sales reports from your books
- Including the sales tax you collected in the sales figures
- Forgetting to report fuel, room revenue or other non-taxable sales in total sales
- Filing only for the locations that had sales when the business has several
- Skipping zero returns in slow periods
- Not saving the confirmation, then having no proof when a notice arrives
Every one of these traces back to the books. When sales and sales tax are recorded correctly through the month, the return is just a matter of copying numbers across. That's why I set up sales tax tracking in QuickBooks before anything else when I set up a client's books.
Want your sales tax filed for you?
I've spent 38 years in accounting, and I file Texas sales tax returns for small businesses as part of their monthly books, working online from Weatherford, Texas. If you'd rather not think about the 20th of the month again, see my tax preparation and planning services or book a short intro call.
Sources
- Texas Comptroller: Getting Started with Webfile
- Texas Comptroller: Requirements for Reporting and Paying Sales and Use Tax
This article is general information, not tax advice for your specific situation. Rules and rates are set by the Texas Comptroller and can change.