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Use Tax
Use tax is a nonrecurring tax that is complementary to sales tax and is imposed on the storage, use, or other consumption of tangible personal property or a taxable service in Texas.
Who is responsible for Use Tax?
Texas sellers are required to collect and remit sales and use tax to the Comptroller’s office on their sales of taxable items or obtain a resale or exemption certificate in lieu of collecting the tax.
A Texas purchaser owes state and local use tax if they buy taxable goods and services that are stored, used or consumed in Texas from a seller who does not charge Texas sales tax. If the seller does not have a permit or fails to charge sales and use tax, the purchaser must pay the use tax directly to our office unless an exemption applies.
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For example, if you buy a shirt through an online auction from a seller in Ohio who does not charge Texas tax, or if a New York electronics store sells you a camera through its website and does not charge Texas tax, you owe Texas use tax on the sales price of the item.
Items bought in another country and used in Texas are also subject to Texas use tax. For example, if you buy taxable items in Mexico that you bring back to Texas, you owe Texas use tax on the purchase price of those items.
You must pay state and local use tax if you have the item delivered to, or use the item in, an area that imposes a local tax. If you buy an item from a seller located in a part of Texas with no local taxes, you will only pay state sales tax (6.25 percent) on that purchase. See Publication 94-105, Local Sales and Use Tax Collection – A Guide for Sellers, for additional information regarding local use tax.
A purchaser who buys a taxable new off-highway vehicle from an out-of-state retailer for use in Texas owes Texas use tax. For example, if you buy a new all-terrain vehicle (ATV) from an out-of-state retailer in Oklahoma who does not collect Texas tax, and you store or use the ATV in Texas, you owe Texas use tax on the price of the ATV. See our Use Tax for New Off-Highway Vehicles Purchased From Out-of-State Retailers webpage for additional information.
Use Tax Rates
The state use tax rate is 6.25 percent. For Texas purchasers, depending on where you use, store or consume the item, you may owe up to an additional 2 percent in local use taxes. Use our Sales Tax Rate Locator to determine the local tax rate at your address.
For example, you live in a city that imposes a 2 percent local tax. You travel to an area with no local tax imposed and buy a coffee table for $200 to use in your home. The seller only collects the state sales tax rate of 6.25 percent on the purchase. When you bring the coffee table back to your home, you owe the additional 2 percent local use tax of $4.
If you purchase an item from a remote seller and pay the state use tax and single local use tax, you do not owe any additional taxes.
How to Report and Pay Use Tax
Permitted purchaser
If you are a Texas purchaser with a Texas sales and use tax permit, you will report the use tax in Item 3, Taxable Purchases, of your Texas Sales and Use Tax Return, on your next regularly scheduled due date.
Nonpermitted purchaser
A nonpermitted Texas purchaser that does not have a Texas Sales and Use Tax Permit must report and pay any use tax owed to the Comptroller’s office on Form 01-156, Texas Use Tax Return (PDF).
A purchaser who owes less than $1,000 of use tax must file and pay no later than Jan. 20 of the following year. A purchaser who owes $1,000 or more in use tax must file and pay on or before the 20th of the month following the month when the $1,000 threshold is reached.
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For example, if you buy one untaxed item during this calendar year and owe $250 in Texas use tax on the purchase, you can file Form 01-156 (PDF) and pay the use tax any time through Jan. 20 of the following year.
If you purchase another untaxed item in the same year and owe an additional $750 in Texas use tax, you must file and pay the use tax due by the 20th of the following month because you reached the $1,000 threshold in tax owed for your combined purchases in one calendar year.
To receive a receipt acknowledging your payment of the use tax for a new off-highway vehicle purchased from an out-of-state retailer, you can file and pay online; or submit Form 01-163, Texas Use Tax Return – For New Off-Highway Vehicles Purchased From Out-Of-State Retailers (PDF).
Credit for Tax Already Paid
Texas allows a credit for sales or use tax paid to other states. For more information, see Rule 3.346, Use Tax.