Texas Sales Tax Questions


T

TheTamdino

I am in the planning stage for a new business that will be
conducting business in the state of Texas. Eventually I
would like to branch out into other states, but for the time
being we will only be in Texas.

I am totally clueless when it comes to Sales Taxes and what
I need to collect. I will be operating in Houston, Harris
Country, TX and selling all over the state. I eventually
will be accepting orders over the Internet, but not at
first.

I've been reading at:

http://www.window.state.tx.us/taxinfo/sales/new_business.html

but I'm unsure as to exactly what all will apply to me.

My product is taxable and will be shipped by postal mail
(USPS). I plan on reporting monthly simply because I don't
want to hold on to the sales tax money, I'd rather get it
out of my hands and into that of the state.

Which taxes do I need to collect and what is the rate?

When are Internet-based sales taxable?

Since I want to keep the sales tax separate from actual
proceeds from sales, I plan on depositing this money into a
separate bank account.

Can the tax account be a saving account?

If so, can I keep the interest generated on that money?

And finally, does anybody know a good, "in plain english",
guide to business-related taxes for the State of Texas?

Thanks,
Tammy
 
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K

Katie

TheTamdino said:
I am in the planning stage for a new business that will be
conducting business in the state of Texas. Eventually I
would like to branch out into other states, but for the time
being we will only be in Texas.

I am totally clueless when it comes to Sales Taxes and what
I need to collect. I will be operating in Houston, Harris
Country, TX and selling all over the state. I eventually
will be accepting orders over the Internet, but not at
first.

I've been reading at:

http://www.window.state.tx.us/taxinfo/sales/new_business.html

but I'm unsure as to exactly what all will apply to me.

My product is taxable and will be shipped by postal mail
(USPS). I plan on reporting monthly simply because I don't
want to hold on to the sales tax money, I'd rather get it
out of my hands and into that of the state.

Which taxes do I need to collect and what is the rate?
I think the answers to your questions are all there in the
publications your link goes to.

According to the Guidelines, you collect state and local
taxes on all sales shipped to locations within Texas at the
rate that applies to the place from which your product is
shipped. If you are shipping from Harris County, you
collect and pay over tax for Harris County, no matter where
the product ends up (as long as it is in Texas). In other
words, it's an origin rule for the local taxes, not a
destination rule.

If your office is in one local jurisdiction and your
inventory is in another, you collect tax for the
jurisdiction from which you ship your sales, not your office
location.

If you ship a sale outside your state, and you do not have
any physical presence in the purchaser's state, you are not
responsible to collect or pay over any sales or use tax.
That sale is subject to use tax in the purchaser's state,
and the purchaser is responsible for it.
When are Internet-based sales taxable?
When the destination is within Texas. Same as any other sale.
Since I want to keep the sales tax separate from actual
proceeds from sales, I plan on depositing this money into a
separate bank account.

Can the tax account be a saving account?
No reason why not.
If so, can I keep the interest generated on that money?
Sure.

Katie in San Diego

The foregoing is intended for educational
 

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