taxes

Engaged in Business

Remote sellers, marketplace providers and marketplace sellers engaged in business in Texas must apply for a Texas sales and use tax permit and collect sales and use tax on the taxable items (tangible personal property and taxable services) they sell, deliver or provide here.

Are You Engaged in Business in Texas?

You are engaged in business in Texas if any of the following statements apply:

• You have a temporary or permanent location in Texas that you operate directly or through an agent.
  • Examples include a kiosk, office, distribution center, sales room, sample room, warehouse, storage place or any other physical location where you sell taxable items.
• You have an employee or representative in Texas to sell, deliver or take orders for taxable items.
  • Examples include agents, canvassers, or solicitors operating under your authority to conduct business in Texas; independent salespersons operating on behalf of direct sales companies; employees who exhibit products at trade shows or conferences; affiliates or related businesses that accept returns in Texas.
• You perform services using company employees, authorized service agents or subcontractors in Texas.
• You promote a flea market, arts and crafts show, trade day, festival or other event selling taxable items services in Texas.
• You lease equipment or other tangible personal property to others in Texas.
• You own or use tangible personal property (including computer software) in Texas.
• You deliver items using owned, leased or company vehicles in Texas.
• You allow a franchisee or licensee to operate under your trade name and the franchisee or licensee is required to collect sales and use tax in Texas.
• You formed, organized or incorporated your business in Texas and your internal affairs are governed by Texas law (even if you have no other activity in this list).
• You solicit in Texas
  • orders for taxable items by mail or online; or
  • sales of taxable items through catalogs, periodicals, advertising flyers or other advertising, or by radio, television, telephone, or other communication system.
• In Texas, you have at least a 50 percent ownership interest in, or are owned at least 50 percent by, another entity who maintains
  • a distribution center, warehouse or similar location and delivers your taxable items sold to purchasers;
  • a location from which business is conducted that sells substantially similar products as you and sells those products under a substantially similar business name as yours; or
  • location from which business is conducted that uses its facilities or employees to promote your sales or intends to establish or maintain a marketplace for you, including receiving or exchanging returned merchandise.
• You conduct business in any other manner in Texas.

Additionally, you have sales and use tax responsibility if either of the following apply:

• You are a remote seller with total Texas revenue greater than $500,000 in the preceding 12 calendar months. For additional information on a remote seller’s Texas tax responsibility, see our Remote Sellers webpage.
• You are a remote marketplace provider with total Texas revenue greater than $500,000 in the preceding 12 calendar months. For additional information on a marketplace provider’s Texas tax responsibility, see our Marketplace Providers webpage.
• You are a marketplace provider or a marketplace seller engaged in business in Texas. For additional information on a marketplace provider’s and seller’s Texas tax responsibilities, see our Marketplace Providers and Marketplace Sellers webpage.

Out-of-State Business Performing Disaster-Related Work in Texas

An out-of-state business coming to Texas for the sole purpose of helping with disaster recovery is not considered engaged in business here and is not required to register with the Secretary of State or to collect or remit Texas taxes (including franchise tax) from its customers if it meets certain requirements. For additional information, see Publication 94-182, Disasters and Texas Taxes.

Additional Resources

• Sales and Use Tax
• Texas Online Registration Application
• Remote Sellers
• Remote Sellers and Marketplace Frequently Asked Questions
• Marketplace Providers and Marketplace Sellers

94-108
(12/2020)