Sales and use tax is one of the most common encounters in retail. When a person goes out and purchases an item, they are used to paying the tax on what they buy. This is known to the average individual as the sales tax and is very familiar to most shoppers. However, when combined with the use tax, things get a little more complicated and questions arise.
Here are four questions about sales and use tax in Texas, as answered by the expert tax team at The Hegwood Group.
1. What is the Difference Between Sales and Use?
The main difference between sales and use tax is that use tax is applied to a transaction that is subject to sales tax but does not have sales tax charged on it. In the state if Texas, there is a 6.25 percent state sale and use tax on all:
- Taxable services,
- Retail sales,
- And rentals.
2. What Requirements Must Be Met for a Sales Tax Permit?
Sales and use tax is something that must legally be earned when selling products to consumers. If you own a business in Texas and sell goods, then you will need to complete an application to sell or lease tangible personal property in the state. This also applies if your business provides taxable services to its clientele. Of course, in order to apply for this permit, there is some very important information you will need regarding the business. Some of the important information required to complete an application is:
- Owner’s Social,
- Appropriate age for an application (18),
- The file number for your Texas business.
Your local property tax consultant will be able to help you figure out what you need to do in order to successfully apply for a sales and use tax permit in your area.
3. What is Eligible for Use Tax?
When the “use” aspect of sales and use tax comes into play, things tend to get very specific. The retailer selling an item pays the state government the sales tax that is given to them by the customer. Use tax is what is collected from end users on out-of-state purchases that will be used or stored in the state where a user lives and does their business.
This means that on your state income tax returns, if you have compensating use tax applied to a purchase, you will need to pay and report the use tax, then.
4. How Can a Property Tax Consultant Help Me?
These taxes can be extremely difficult to navigate and that is why the help of a property tax consultant can be useful for dealing with your tax needs and problems. Not complying with your Texas sales and use tax regulations can have a devastating effect on your business or personal life.
Your local consulting service will be able to help you with tax audits, appeals and other issues that include:
- Training on regulations,
- Private letter rulings,
- Nexus reviews, and more.
The Hegwood Group Tackles Sales and Use Tax Audits, Appeals, and More!
If you are facing a tax audit because of Texas Sales and Use Tax, don’t let the process become a stressor. Get in touch with The Hegwood Group today to get the help that you need with your tax problems. Our team is experienced in these issues and will be able to help you educate yourself on the steps that need to be taken.