Foreign sellers can have Texas sales tax obligations even without a Texas office, employee, or warehouse. The Texas Comptroller of Public Accounts treats an out-of-state business whose only Texas activity is remote solicitation as a remote seller. A remote seller generally must obtain a Texas sales tax permit and collect and remit Texas state and local use tax when its total Texas revenue reaches $500,000 or more during the preceding 12 calendar months.
The collection obligation begins no later than the first day of the fourth month after the month in which the seller exceeds that safe-harbor amount. Sellers with Texas employees, representatives, inventory, fulfillment activity, trade-show activity, or another form of physical presence can have nexus under different rules, even if revenue is below the remote-seller threshold. The Texas Comptroller’s Webfile system is used for electronic filing, while foreign businesses located outside the United States can use the Comptroller’s alternative application submission process.
Do foreign sellers have Texas sales tax nexus?
Yes. A foreign seller can have Texas sales tax nexus through economic activity, physical presence, or marketplace-related activity. For Texas sales tax purposes, the important distinction is whether the business is a remote seller whose only Texas activity is remote solicitation or is instead engaged in business in Texas through people, property, inventory, representatives, or other in-state activity.
Texas is not a home-rule state for sales tax administration. Local jurisdictions, including cities, counties, special purpose districts, and transit authorities, may impose local sales and use taxes, but the Texas Comptroller of Public Accounts administers the state sales and use tax system and collects the tax through the state’s registration and filing process.
The exact position here depends on your own facts, so it is worth confirming with the state directly or talking to us about your situation. The exact nexus position depends on how orders are obtained, where inventory is stored, who performs services, how returns are handled, and whether related businesses operate in Texas.
Texas economic nexus threshold for foreign sellers
The Texas remote-seller threshold is $500,000 of total Texas revenue during the preceding 12 calendar months. The Comptroller measures total Texas revenue using gross revenue from taxable and nontaxable sales of tangible personal property and services delivered into Texas. The calculation also includes separately stated handling, transportation, installation, and similar charges collected by the seller, as well as sales for resale and sales to exempt entities.
A remote seller with total Texas revenue below $500,000 during the preceding 12 calendar months is within the stated safe harbor and is not required under that remote-seller rule to obtain a permit or collect, report, and remit Texas state and local use tax. This safe harbor does not override a separate physical-presence or other nexus basis.
Once the seller exceeds $500,000, it must obtain a permit and begin collecting and remitting Texas state and local use tax no later than the first day of the fourth month after the month in which the threshold is exceeded. Keep a rolling 12-month revenue calculation because the threshold is not limited to a calendar year.
Physical presence activities that create Texas nexus
Physical presence can create Texas nexus even when a foreign seller has not reached the remote-seller revenue threshold. Examples identified by the Texas Comptroller include a business location, salespersons, and representatives in Texas. Inventory, a warehouse, a distribution center, Texas fulfillment activity, or personnel performing business functions in the state may also require analysis.
Temporary activity can matter. Sellers from outside Texas that sell taxable items, take orders, or use a Texas fair, festival, market, or show to promote taxable sales are treated by the Comptroller as engaged in business in Texas and must have a Texas Sales and Use Tax Permit.
Related-party arrangements require care as well. A related entity’s Texas facilities or employees may affect the seller’s obligations when they deliver products, promote sales, maintain a marketplace, or handle returned merchandise. A foreign seller should map every Texas touchpoint rather than treating the absence of a local corporation as proof that no nexus exists.
How marketplace sales affect your Texas tax obligations
Texas law generally places the collection, reporting, and remittance duties for marketplace sales on a marketplace provider that processes sales or payments for marketplace sellers. The provider must certify that it assumes the seller’s statutory duties, collect tax on taxable marketplace sales, and report and remit the tax to the Comptroller.
Marketplace collection does not make every obligation disappear. A foreign seller may still need a Texas permit and may still need to file returns, particularly where it has direct Texas sales, physical presence, or other Texas activity. The seller should retain marketplace statements and documentation showing which transactions the provider treated as marketplace sales and which taxes it collected.
Do not assume that every channel is covered merely because one marketplace collects tax. Direct website orders, wholesale transactions, sales through other channels, exempt sales, returns, and Texas activity outside the marketplace should be reviewed separately. The exact treatment depends on the marketplace provider’s statutory certification and the seller’s broader Texas facts.
Register for a Texas sales tax permit through Webfile
A foreign business that is required to collect Texas tax needs a Texas Sales and Use Tax Permit. The Comptroller provides an online Texas sales tax registration application, and the state’s Webfile system is used to manage electronic tax filings and related account activity. A seller can also use Form AP-201, the Texas Application for Sales and Use Tax Permit.
A foreign seller located outside the United States can register by submitting the application by email or mail as described on the Comptroller’s remote-seller page. The seller should use the current application instructions and confirm the correct submission route before filing.
The application requires business-identification information. The Comptroller’s online registration instructions identify items such as federal employer identification information where applicable and a North American Industry Classification System code. The exact documentation depends on the legal form and ownership structure, so a foreign business should assemble its legal name, formation details, responsible-person information, federal tax identification information if issued, business address, product or service description, and Texas activity details before applying.
Determine which Texas sales are taxable
Texas imposes state sales and use tax on retail sales, leases, and rentals of most tangible personal property and on taxable services. A product being sold online does not by itself make the transaction exempt. Foreign sellers should classify each product and service, then separately identify resale, exemption, and other legally supported exclusions.
For threshold purposes, Texas includes both taxable and nontaxable tangible-personal-property and service revenue in the remote-seller revenue calculation. That means a seller cannot automatically exclude a sale from its threshold analysis simply because the sale itself was exempt or nontaxable.
Shipping and delivery charges can be taxable when connected with a taxable sale. Maintain invoices, exemption or resale documentation, product classifications, shipping records, refunds, and marketplace reports. If the taxability of a particular product or service is uncertain, confirm the treatment with the Texas Comptroller or have a tax professional review the facts before applying a tax code.
Apply Texas local use tax and the single local rate
A remote seller required to collect Texas tax may generally calculate local use tax using the local rate applicable to the shipping destination, or elect Texas’s single local use tax rate. The current single local use tax rate is 1.75 percent. The rate is published for the applicable calendar year, so verify the current rate on the Texas Comptroller’s site before using it for a new filing period.
The single-rate option is designed to avoid tracking every local Texas jurisdiction for qualifying remote sales. A remote seller must notify the Comptroller of the election before using the rate by submitting Form 01-799, Remote Seller’s Intent to Elect or Revoke Use of Single Local Use Tax Rate. The form may be submitted by email or mail using the contact information provided by the Comptroller.
The alternative is destination-based local use tax calculation. That approach requires determining the customer’s Texas delivery location and applying the applicable local tax. The seller should choose one method deliberately, document the election, and use consistent transaction records. A seller with Texas places of business may not fit the remote-seller rules for every transaction, so local sourcing should be reviewed separately where physical presence exists.
When to begin collecting Texas sales tax
A remote seller that exceeds the $500,000 Texas revenue safe harbor must begin collecting Texas state and local use tax no later than the first day of the fourth month after the month in which it exceeds the threshold. For example, the seller should identify the month of the threshold event, count forward using the Comptroller’s rule, and prepare its permit, checkout settings, invoices, and filing process before the collection start date.
A seller with physical presence or another non-remote nexus basis may have an earlier or different obligation. The remote-seller timing rule should not be used to postpone collection when Texas employees, representatives, inventory, trade-show activity, Texas fulfillment, or related-party activity already creates nexus.
Because Texas measures the remote-seller safe harbor over the preceding 12 calendar months, maintain a monthly Texas revenue schedule. Include the categories the Comptroller identifies, including taxable and nontaxable sales, exempt and resale sales, and separately stated charges included in the threshold calculation.
File Texas sales tax returns and meet deadlines
Texas assigns a filing frequency to the taxpayer account. A foreign seller should follow the filing frequency and due date shown by the Texas Comptroller rather than choosing a schedule based only on its own sales cycle. Returns and payments can be handled electronically through Webfile, and the seller must report the required gross sales, taxable sales, deductions, state tax, local tax, and tax collected for the reporting period.
Texas sales tax returns are generally due on the 20th day of the month following the reporting period, with the applicable next-business-day treatment when the due date falls on a weekend or holiday. The exact due date and filing frequency should be confirmed through the Comptroller’s current due-date information and the seller’s account notice.
Keep filing even for a period with no tax due when the Comptroller requires a return. Reconcile orders, refunds, chargebacks, marketplace-collected transactions, exempt sales, shipping charges, and local tax elections before submission. Late or incomplete filings can create penalties, interest, notices, or account problems, so a foreign seller should maintain a recurring compliance calendar.
Are sales shipped out of Texas subject to Texas sales tax?
Texas sellers generally do not collect Texas sales tax on taxable items shipped and delivered to an out-of-state location. The Texas Comptroller says the seller should keep proof of delivery, such as a bill of lading, shipping invoice, or postal receipt. This rule concerns the destination of the shipment and does not decide whether tax is due in the destination state or country.
Export transactions require documentation showing that the goods actually leave the relevant territory. The Comptroller identifies acceptable export evidence that can include customs-broker export certification, foreign import documents, or carrier bills of lading showing a delivery point outside the United States.
If a customer takes possession of a taxable item in Texas, Texas tax can be due even if the customer later transports the item elsewhere. A foreign seller should therefore distinguish between goods shipped directly from outside Texas to a Texas customer, goods shipped from Texas inventory, customer pickup in Texas, and goods exported from Texas. Each pattern can produce a different sourcing and documentation result.
Texas foreign-seller sales tax situations, thresholds, local-tax choices, and filing actions
| Situation | Texas treatment | Action for the seller |
|---|---|---|
| Remote seller below the $500,000 preceding-12-month Texas revenue safe harbor | The remote-seller safe harbor generally removes the requirement to obtain a permit and collect, report, and remit Texas state and local use tax under that rule. | Continue monitoring a rolling 12-month total and review whether physical presence or another nexus basis applies. |
| Remote seller at or above $500,000 during the preceding 12 calendar months | A Texas permit is required, and Texas state and local use tax collection must begin no later than the first day of the fourth month after the month of the threshold exceedance. | Register, configure collection, document the start date, and prepare recurring returns. |
| Seller with Texas physical presence | The business may not qualify as a remote seller, even if its Texas revenue is below the remote-seller safe harbor. | Review Texas locations, personnel, inventory, representatives, events, fulfillment, and related-party activity. |
| Taxable goods or taxable services sold to Texas customers | Texas state sales and use tax applies, with local use tax based on the applicable destination or the permitted single-rate election for a qualifying remote seller. | Classify the item, retain exemption or resale support, and calculate state and local tax. |
| Qualifying remote seller electing the single local use tax method | The current single local use tax rate is 1.75 percent, subject to confirmation for the relevant calendar year. | Submit Form 01-799 before using the election and maintain evidence of the election. |
| Marketplace-provider sales | The marketplace provider generally assumes the statutory collection, reporting, and remittance duties for marketplace sales after the required certification. | Reconcile marketplace-collected transactions and separately review direct sales and any permit or filing duties. |
| Taxable goods shipped and delivered outside Texas | Texas sales tax generally is not collected on the out-of-state shipment when the seller documents delivery outside Texas. | Retain delivery or export evidence and investigate tax obligations in the destination jurisdiction. |
| Texas sales tax return | The Comptroller assigns the account’s filing frequency; returns are generally due on the 20th day of the month following the reporting period. | Use Webfile, follow the account notice and current due-date instructions, and file required zero returns. |
Frequently asked questions
What is the Texas economic nexus threshold for a foreign seller?
For a remote seller, the Texas safe-harbor threshold is $500,000 of total Texas revenue during the preceding 12 calendar months. Texas counts gross revenue from taxable and nontaxable tangible personal property and services, including certain separately stated charges, resale sales, and exempt sales. Physical presence or another nexus basis can create obligations independently of this threshold.
Do foreign businesses need a Texas sales tax permit?
Yes, when the foreign business is engaged in business in Texas and must collect Texas sales or use tax. A remote seller that reaches the $500,000 preceding-12-month threshold must obtain a permit, while a seller with Texas physical presence can need one under different rules. The Texas Comptroller provides online registration and Form AP-201 options.
When must a remote seller start collecting Texas sales tax?
A remote seller that exceeds the $500,000 safe-harbor amount must begin collecting and remitting Texas state and local use tax no later than the first day of the fourth month after the month in which it exceeds the amount. A separate physical-presence nexus basis may require collection under a different timetable.
Do marketplace facilitators collect Texas sales tax for foreign sellers?
A marketplace provider that processes sales or payments generally assumes the statutory seller duties for marketplace sales, including collection, reporting, and remittance, after providing the required certification. The foreign seller should still review permit and filing requirements, direct sales, non-marketplace transactions, and the provider’s transaction records.
What is the Texas single local use tax rate?
The current Texas single local use tax rate for qualifying remote sellers is 1.75 percent. The rate can change for a later calendar year, so confirm the current rate with the Texas Comptroller. A remote seller must notify the Comptroller using Form 01-799 before using the single-rate election.
How do foreign sellers register for a Texas sales tax permit?
A foreign seller can use the Texas online sales tax registration application or submit Form AP-201. A seller located outside the United States can email the application to sales.applications@cpa.texas.gov or fax it to 512-936-0010, as stated by the Comptroller. The business should prepare its legal, ownership, federal identification, NAICS, product, and Texas-activity information before applying.
How often must a foreign seller file Texas sales tax returns?
The Texas Comptroller assigns the account’s filing frequency, so the answer is not automatically monthly, quarterly, or annually for every foreign seller. Follow the frequency shown on the taxpayer account and the Comptroller’s current notices. Returns are generally due on the 20th day of the month following the reporting period.
Are sales shipped out of Texas subject to Texas sales tax?
Texas sellers generally do not collect Texas sales tax on taxable items shipped and delivered to an out-of-state location, provided the seller keeps delivery evidence. Texas tax can still apply when a customer takes possession in Texas and later transports the item elsewhere. The destination state or country may impose its own tax or import obligations.
How we handle this for you
The mechanics in Texas are manageable on their own; the cost is the time it takes every single filing period, in every state you are registered in. We are a managed service: our team registers you with the Texas Comptroller of Public Accounts, prepares and files your returns, and keeps you compliant period after period. You get one point of contact and one invoice — you do not get another dashboard to learn.
See our sales tax compliance services, check where you have obligations with the nexus calculator, or talk to us about Texas.
Official sources
- https://comptroller.texas.gov/taxes/sales/remote-sellers.php
- https://comptroller.texas.gov/taxes/sales/remote-sellers-marketplace-faq.php
- https://comptroller.texas.gov/taxes/publications/94-105.php
- https://comptroller.texas.gov/taxes/publications/94-171.php
- https://comptroller.texas.gov/taxes/permit/
- https://comptroller.texas.gov/help/sales-tax-registration/requirements.php/
Reviewed by Paul le Roux, CA(SA). Sales Tax Compliance USA handles US sales tax registration, filing and remittance for cross-border and domestic ecommerce sellers as a fully managed service.
This page is general information for educational purposes and does not constitute legal or tax advice. Sales tax rules change and depend on your specific facts. Consult a qualified tax professional about your own position.