Month-end close: sales tax in Texas

Texas has a 6.25% state sales tax, local tax of up to 2% on top, and a $50 penalty for each late report even when no tax is due.

This is part of the sales tax checklist. Texas sales and use tax is filed with the Texas Comptroller of Public Accounts.

Rate. 6.25% state sales and use tax, plus local taxes of up to 2%, for a combined maximum of 8.25%.

Filing. The Comptroller lists monthly, quarterly and yearly filers. Filing and paying on time earns a 0.5% discount, and a monthly or quarterly filer who prepays a reasonable estimate by the 15th earns another 1.25%.

Due. The 20th of the month for monthly reports, moved for weekends and federal holidays: June 22, September 21 and December 21 in 2026. Quarterly reports are due in April, July, October and January.

The trap. A payment 1 to 30 days late adds 5%, and over 30 days adds 10%. Each late report also costs a flat $50, even when no tax is due.

The month-end steps

1. Check the permit. The Comptroller says to allow 2 to 3 weeks to receive a sales tax permit [3]. Done when the client's permit number is on file.
2. Check the rate on every sale. The state rate is 6.25%. Cities, counties, special purpose districts and transit authorities can add local tax, and the local total in any one location never exceeds 2%, so the combined rate is at most 8.25% [1] [2]. Done when each taxable sale carries the state rate plus the local rate that applies to it.
3. Confirm whether the client files monthly, quarterly or yearly. The Comptroller lists quarterly, monthly and yearly filers [1]. Done when the frequency on file matches the client's account.
4. Work out the due dates. The Comptroller's 2026 chart adjusts for Saturdays, Sundays and federal legal holidays. Monthly sales tax reports are due on the 20th, except June 22, September 21 and December 21. Quarterly reports are due in April, July, October and January [4]. Done when each month's due date is on the client's calendar.
5. Decide on the prepayment discount. A monthly or quarterly filer who prepays a reasonable estimate for the whole period, files a prepayment report if paying by mail, then files the report showing the total tax by its due date and pays the balance, takes a 1.25% prepayment discount in addition to the 0.5% timely filing discount [5]. A monthly filer's prepayment is due on the 15th. A quarterly filer's is due on the 15th of the second month of the quarter [5]. In 2026 a prepayment due on the 15th moves to February 17, March 16, August 17 or November 16 when the 15th falls on a weekend or holiday [4]. Done when each prepayment the client makes is on the calendar.
6. Know what late costs. A payment 1 to 30 days late adds a 5% penalty, and over 30 days late adds 10%. After the date on a Notice of Tax/Fee Due, a further 10% applies, 20% in total. Interest starts on the 61st day after the due date at a variable rate set each January. A late report also costs a flat $50, even if the tax is later paid or none is due [6]. Done when each month's payment and report went out by their due dates, or the late ones are flagged for the client.
7. Tie the liability. Done when the sales tax payable account is at zero after the month's payments, or equals the tax not yet due.