Remote Sellers and Marketplace Frequently Asked Questions

No, the laws passed by the 86th Legislature do not impose new taxes. These laws only address tax collection responsibilities.

Yes. Depending on your activities, you may be a remote seller, a marketplace seller, a marketplace provider, or any combination of the three. There are different tax responsibilities for each type of seller.

All sellers, including remote sellers, marketplace sellers, and marketplace providers, must keep and maintain required records, such as total gross receipts of sales and purchases, for at least four years.

The Comptroller’s office offers free electronic reporting using Webfile or Electronic Data Interchange (EDI), but we do not have software that integrates with a seller’s system to help with collecting and remitting. Help with calculating, collecting, preparing returns, and remitting sales tax is available from various private service providers and tax practitioners.

Contact us for questions about the taxability of goods and services, rates and related issues.

A remote seller is an out-of-state seller whose only activity in Texas is the remote solicitation of sales.

The safe harbor provision provides that a remote seller is not required to obtain a tax permit and collect use tax, if its total Texas revenue is less than $500,000 in the previous 12 calendar months. The dollar amount is based on gross revenue from sales of all taxable and nontaxable tangible personal property and services into Texas. The amount includes separately stated handling, transportation, installation, and other similar fees collected by the seller. It also includes sales for resale and sales to exempt entities.

Yes. Unless you qualify under the safe harbor provision, you are required to collect local use tax based on the local tax rate applicable to the location to which you are shipping. You can choose to collect the single local use tax rate instead of having to determine the rate based on destination. If you choose to collect the single local use tax rate, you must notify our office by completing and sending Form 01-799, Remote Seller's Intent to Elect or Revoke Use of Single Local Use Tax Rate (PDF) by email to [email protected] or mail to:

No. You were responsible for collecting tax only if you were engaged in business in Texas prior to Oct. 1, 2019, such as by maintaining an office or property in the state or having representatives in the state who take orders or make sales or deliveries.

In order to terminate Texas use tax collection responsibilities as a remote seller, you must have 12 consecutive months in which total revenue from sales of all tangible personal property and services in Texas for the preceding 12 calendar months was less than $500,000.

To terminate your use tax collection responsibilities, please use the Remote Seller's Intent to Terminate Use Tax Responsibilities/Remote Seller Status web form. A remote seller that terminates its use tax responsibilities must resume collection on the first day of the second month following any consecutive 12 months in which its total Texas revenue exceeds $500,000.

For information about ending your franchise tax responsibility, please see our Reinstating and Terminating a Business webpage.

A marketplace provider is required to certify to you that it will collect sales and use tax. You should receive a certification from the marketplace provider. If the marketplace provider does not issue any type of certification, then you should collect sales and use tax until you receive a certification.

A remote seller who is below the $500,000 safe harbor threshold and has tangible personal property temporarily stored in Texas at a marketplace provider’s facility does not need to obtain a permit and does not have a collection obligation if the marketplace provider has certified it will assume the duties of a seller.

As a remote seller, if you are above the $500,000 safe harbor threshold and have tangible personal property temporarily stored in Texas at a marketplace provider’s facility, then you must obtain a tax permit and collect tax on your sales.

You have franchise tax responsibility as a remote seller if you are a taxable entity and have temporarily stored inventory in a marketplace provider’s facility in Texas.

Yes. As of April 1, 2020, you must include all sales in the safe harbor calculation, including marketplace sales, even if the marketplace provider is collecting and remitting the sales tax.

For example, during a 12-month period, a remote seller makes $300,000 in total sales into Texas through its website and $300,000 in sales through multiple marketplaces that certify they are collecting and remitting the tax. Because the combined total sales is $600,000, the remote seller is not covered by the safe harbor provision and is required to collect and remit tax for Texas sales made through its website. The marketplace providers are responsible for collecting and remitting tax on sales made through a marketplace.

Sales made through a marketplace are included in item one (Total Texas Sales) on the sales and use tax return, but excluded from item two (Taxable Sales) if the marketplace provider has certified it will collect and remit tax on your behalf. You must collect, report, and remit Texas tax on sales made outside a marketplace.

For example, in a reporting period you have $30,000 of sales through a marketplace and $20,000 of taxable sales into Texas through your website. Based on these sales, you will report $50,000 in item one (Total Texas Sales) and $20,000 in item two (Taxable Sales) of your return.

No. You do not need a permit if you have received and accepted in good faith a certification that the marketplace provider will collect sales and use tax. However, you must retain required records of all marketplace sales for at least four years.

The single local use tax rate is an alternative local tax rate that can be used by remote sellers only. The single local use tax rate is not available to marketplace providers. The current single local use tax rate is 1.75 percent. We will compute the single local use tax rate prior to the beginning of each calendar year and publish it in the Texas Register.

A remote seller may elect to use the single local use tax rate in place of the actual local use tax rate for a specific location. To do so, the remote seller must notify our office in writing of its election using Form 01-799, Remote Seller’s Intent to Elect or Revoke Use of Single Local Use Tax Rate (PDF). Forms may be submitted by email to [email protected] or by mail to the Account Maintenance Division:

If you wish to stop collecting the single local use tax rate, you must notify the Comptroller’s office using Form 01-799, Remote Seller’s Intent to Elect or Revoke Use of Single Local Use Tax Rate (PDF) by email or mail. If you notify the Comptroller’s office of your revocation before Oct. 1 of the current year, you must continue to use the single local use tax rate until the end of the calendar year. If you notify the Comptroller’s office on or after Oct. 1 of the current year, you must continue to collect the single local use tax rate until the end of the following year.

For example, if we receive your revocation form on April 1, 2023, the revocation will be effective Jan. 1, 2024. If we receive your revocation form on Nov. 1, 2023, it will be effective Jan. 1, 2025.

You can submit Form 01-799, Remote Seller's Intent to Elect or Revoke Use of Single Local Use Tax Rate (PDF) to our office by email at [email protected]; or by mail to:

Yes. You may apply for a refund for the difference between the single local use tax rate paid and the local tax rate you would have paid at your location. Refunds may be claimed on an annual basis. Please use Form 00-957, Texas Claim for Refund (PDF) to submit your claim.

Yes. As a Texas seller, you have physical presence in Texas and must have an active sales and use tax permit.

You can purchase inventory tax free to resell through a marketplace by giving your vendor a resale certificate (PDF).

You can issue a resale certificate (PDF) to any vendor when purchasing for resale. If the vendor does not honor the certificate and you are charged sales tax on items you purchase for resale, you can take a credit on your next sales tax return or request a refund from our office.

Sales made through a marketplace by a marketplace seller are included in item one (Total Texas Sales) on your sales tax return, but excluded from item two (Taxable Sales) if the marketplace provider has certified it will collect and remit tax on your behalf.

If you make sales outside a marketplace, you should collect, report, and remit tax on those sales.

For example, in a reporting period you have $30,000 of sales through a marketplace, and $20,000 of taxable sales through your website. Based on these sales, you will report $50,000 in item one (Total Texas Sales) and $20,000 in item two (Taxable Sales) of your return.

For more information about Texas businesses’ collection responsibilities for other states, see these websites:

• Federation of State Tax Administrators – State Tax Agencies
• Multistate Tax Commission – Member States
• Streamlined Sales Tax Governing Board, Inc. – Remote Sellers: SD v. Wayfair Decision

Disclaimer: Each website listed is responsible for its own information. The Texas Comptroller of Public Accounts is not responsible for maintaining the information provided on these websites.

A marketplace is a physical or electronic store, internet website, software application, or catalog that marketplace sellers use to make sales.

A marketplace provider is an entity that owns or operates a marketplace and processes sales or payments for marketplace sellers. Examples include Amazon, eBay, Walmart Marketplace and Etsy.

Yes. A marketplace provider who is a remote seller does not need to be permitted and start collecting and remitting tax until all sales through their marketplace exceed the $500,000 threshold, or they are otherwise engaged in business in Texas.

No, the single local use tax rate is not available to marketplace providers.

No special form or language is required by marketplace providers to notify marketplace sellers that the provider is collecting and remitting tax for Texas. The written notification can be part of the terms of use or any other agreement between the marketplace provider and seller and does not need to be a separate document that the provider issues to all sellers.

Both the marketplace provider and marketplace seller are subject to audit.

In addition to its sales and use tax collection responsibilities, beginning July 1, 2022, a marketplace provider must collect:

• The prepaid 9-1-1 emergency service fee on the sale of prepaid wireless telecommunications services; and
• The applicable fees associated with sales of lead-acid batteries.

Yes. Marketplace providers can, on behalf of the marketplace seller, take the deduction generally allowed for the resale of tickets and admission documents to amusement services provided in Section 151.432, Deductions of Tax on Ticket or Admission Document to Amusement Service. The marketplace provider must have the marketplace seller’s certification that taxes on the original purchase of the ticket or admission document were paid.

A marketplace seller is an individual who sells through a marketplace.

No special form or language is required by marketplace providers to notify marketplace sellers that the provider is collecting and remitting tax for Texas. The written notification can be part of the terms of use or any other agreement between the marketplace provider and seller and does not need to be a separate document that the provider issues to all sellers.

Both the marketplace provider and marketplace seller are subject to audit.

Sales made through a marketplace are included in item one (Total Texas Sales) on the sales and use tax return, but excluded from item two (Taxable Sales) if the marketplace has certified they will collect and remit tax on your behalf. You must collect, report, and remit Texas tax on sales made outside the marketplace.

For example, in a reporting period you have $30,000 of sales through a marketplace, and $20,000 of taxable sales into Texas through your website. Based on these sales, you will report $50,000 in item one (Total Texas Sales) and $20,000 in item two (Taxable Sales) of your return.