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Texas Sales Tax Rate Locator Update to Benefit Texas Businesses

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The Texas Comptroller has a critical role for the state of Texas and an infamous role for Texas businesses. Its role includes administering the provisions of the Texas tax code. One of its core functions is to guide taxpayers to comply with tax laws and of course, conducting Texas sales tax audits. Recently, it announced the updated Texas Sales Tax Rate Locator, a resource that helps remote sellers find sales tax rates by address. The update eases business' tax obligations by searching for the local sales rate for online purchases in Texas.

Sellers will now be able to access a detailed file resource of Texas addresses with respective state and local sales and use tax obligations. In addition, they included a file of local jurisdiction taxes.

How Will the Sales Tax Rate Locator Help Businesses?

Keep Them Informed of Local Sales Tax Rates

The new update will help sellers to keep track of the local sales tax rates for a city or county and promptly collect and remit as per the law. Texas offers a relatively low sales and use tax rate of 6.25% compared to other states. However, the local sales tax rates change depending on the county and city, reaching up to 8.25%. Texas has over 1,200 cities and 254 counties and this further complicates the role of taxpayers.

Support Remote Sellers in Their Tax Duties

This targets remote sellers who might not be fully conversant of their tax responsibilities in Texas. Texas is one of the states which has enacted the Wayfair bill. The bill allows states to collect taxes on businesses without a physical presence in Texas.

In general, the state excludes remote sellers with sales of less than $500,000 in the previous year from their tax collecting and reporting responsibilities in respect of sales and use tax. However, if sellers are located in Texas, or exceed the threshold, they collect and remit local sales tax based on delivery location.

Help Businesses Manage Operations Effectively

The sales tax rate locator is an important tool in tax planning strategies for any business. For a remote seller, it can easily become overwhelming to keep track of business taxes, including Texas sales and use tax. The two files providing both the sales and use tax obligations and local jurisdiction tax rates can be easily integrated by businesses into their software systems to ensure they perform their tax responsibilities with efficiency.

Even better, the sales tax rate locator eliminates the need for a long trail of paperwork as everything is done online and saves time by avoiding a strenuous search and confirmation of respective local sales rates. It is also user-friendly, in that the business owner enters the address, city, and zip code to ensure they charge the correct tax rate. Businesses will now manage their business expenses in respect of taxes and budget accordingly.

What to Expect

The Texas Comptroller will continue to update the two files every quarter. As a result, all businesses, including remote sellers, need to stay informed and ensure they perform their tax responsibilities.

The Texas Comptroller acts intending to simplify the state's tax system to work for businesses and citizens and promote its revenue collecting duties. As a business owner, you may still not be fully oriented with the sales tax. Sales Tax Helper helps you navigate this resource to ensure you stay on top of your business taxes. Please contact us today for more information.

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