Get Your Texas Sales Tax Permit in Under 24 Hours (Before Penalties Hit!)

Are you a Texas small business owner and you've decided you need to apply for a Texas sales tax permit? Well, you've come to the right place. Today I'm going to talk about the benefits of a sales tax permit, whether or not you should get one, whether or not you qualify to get one, what it takes to get one, and how to apply for the sales tax permit online. So let's get started. There's two main benefits to getting a sales tax permit. The first main benefit that most people hear about is when you go to make purchases with your vendor where you're buying inventory and things like that for your business, for your products, that with the vendor, when you show them your sales tax permit and you fill out a resale certificate with them— and that's just a, a form that you download from the Comptroller's website— you fill that out and then you give that to your vendor. The vendor will sell you inventory and product and not charge you the sales tax on it, so it saves you a little bit of money as far as upfront costs when you're trying to get your inventory together for your store. The second main benefit that you might also hear about is that your vendors might actually give you a discount for purchasing in bulk, but they don't do that for regular consumers like the everyday customers. They only do that for like wholesalers or retail sellers. So they only do it for other businesses that are in the business to resell that product to actual customers, the end users who will be using the products. So that's the second major benefit that you'll hear about when it comes to what, what you can qualify for when you get a Texas sales tax permit. The Texas State Comptroller is the government department that handles issuing out sales tax permits. So to get that permit or to get information about the permit, you'll want to go to this link that you see here on the screen. I'll also provide the link in the description. When you click on the link and get to that page, you're going to want to go through everything you see on this page because there is so much helpful information on there that'll help you get kind of up to speed of what's involved with getting a Texas sales tax permit. It goes over the registering and the reporting requirements of the Texas sales and use tax. It also goes over applying for a sales tax permit, how to change your mailing address or your phone number on file, moving or adding a new business— like if you move your business to another location or if you add on a second location, it gives you instructions on how to do that. And it also tells you what to do if you close one or more of your locations. And it goes over the reporting and the payment requirements. Now don't forget, sales tax is something that Texas charges your customers, not you. Don't think of sales tax as like income tax. The IRS charges you income tax, but the state of Texas only charges you sales tax. And they don't charge you, they're actually charging your customer because your customer— you charge your customer, your customer pays you, you turn in the money to the Comptroller. And that's one of the responsibilities of having a Texas sales tax permit. Is charging and collecting and turning in your sales tax that you collect on behalf of the Texas state government. The next section is the local sales and use tax rates, and so they have a link on that page that, that takes you to a, uh, rate locator based on where your location is. It'll tell you what your tax rate is. Generally speaking, the sales tax is for state county, and local taxes. And so your tax rate is going to be based on how much each department is asking for you to collect. And in Dallas, for example, the rate is 8.25%. The next section goes over the due dates. When you fill out your sales tax permit application, they're going to assign you a filing frequency. So you'll either have to file quarterly, monthly, or yearly. It just depends on how much in sales that you anticipate, and it depends on some of the information that you fill out on the actual sales tax permit. I'm going to go over that a little bit more once we get to the application. The next section is about discounts, penalties, interest, and refunds. So discounts, for example, is like when you collect the sales tax from the customer and it's time for you to file that sales tax return. If you file on time or early, there's a percentage, a very tiny percentage, that the Texas Comptroller will give you credit for and basically it's like a— you can think of it as a tiny commission for you doing the job of charging the sales tax, collecting it, and turning it into the Comptroller. And so they give you a tiny discount or a tiny commission that you're able to keep in your pocket. It's not huge, it's very small, but it's something. Something else to keep in mind are the penalties that the Comptroller will charge you. If you are scheduled to file quarterly and you miss one of your filing dates, then you will get charged a penalty. And the penalty is $50 on top of whatever sales tax you're supposed to be turning in. And if you're late paying that, which of course, if, if you're late, they're charging you a penalty, then you'll also get charged interest. So you don't want that. Whatever filing schedule that you're set for, make sure you file on time. And just a quick tip on that also is if you don't have any sales, like say if you're supposed to start filing next month when you're due, if you didn't have any sales yet, you need to file zero sales because you can't just skip the tax return just because you didn't collect any— you didn't charge and collect any sales tax. You still have to file even if you didn't have any sales. So make sure that you file the zero sales tax return. It's just a little box when you get into your tax return. If you watch my other video, I that tells you how to file your sales tax return, you'll see where to click the box to let the Comptroller know that this quarter or this filing, on this filing return, that you don't have any sales, so there's nothing to actually turn in. So never skip filing your sales tax return regardless of what's going on with your business unless you're ready to shut it down. And if you do, you're going to have to go through the official process of shutting it down. Otherwise, you're going to continue to be responsible for filing every single tax return that's due based on the schedule that they set up for you. The other two sections, interest and refunds, I'm not going to go into the details of that. When you click on that link and you go to the website, it'll give you a little bit more of a breakdown about what those sections are. I just wanted to hit the main points that I think would be most applicable to Texas small business owners like yourself. And then they also have the last section here that says additional resources. As far as which topics that might be most important to you, If you're like an online seller, uh, if you're selling with a certain platform that's considered an official marketplace— an example would be if you're selling on Amazon, on Etsy, uh, on eBay— those are just a few examples, uh, of where those platforms will charge your customers the sales tax that's due, and they'll collect the sales tax that's due, and they will remit— they will turn in the the sales tax for the customers that buy products from you because you're selling on their platform. So they have their own permit that they have with the Comptroller where they're held responsible for the charging, collecting, and turning in of the sales tax. In those cases, you still have to report the sales that you made, but there'll be a second box that says how much of those sales that you made were taxable. And if 100%, if all of your sales are on that Marketplace platform, then you would end up having your total sales, and then you would have your taxable sales at zero if you don't have— if you don't sell anywhere else, like you don't sell hand-to-hand, door-to-door, you don't sell it on your own separate website, your products. So you're not— in each of those cases, you would have been responsible for charging and collecting sales tax yourself. But if you only sell on that platform and that platform is responsible for collecting and turning in all the sales tax in the taxable sales box, you just say zero for the amount. And that way you would still be in compliance for having your permit and filling out your tax return correctly. So you wouldn't end up having to turn in any money. In that case, you would just be filing. And that's what the Comptroller wants to see, is they want to see what information that you're providing, because if you were to ever get audited, they would check your information and look for proof to match up with what you filed, making sure that what you filed is true and correct. So make sure you keep your paperwork because you don't want to get caught in the situation where they're auditing you and you don't have anything to back up the reason why you filled out your sales tax return the way that you did. Now, this next link I'm putting up on the screen, this is a good source of where you can find some really helpful information regarding your sales tax permit. And the rules regarding how that works. It's just got a whole lot of good information in there that you should read every single FAQ that they have on the list. So if you click on the link, that's where we're going next. One of the things I want to make sure we hit in this video is on the FAQ, the first one which says who is required to hold a Texas sales tax and use permit. It says that you have to have a permit if you're an individual, partnership, corporation, or other legal entity engaged in business in Texas and you sell tangible personal property in Texas, lease or rent tangible property in Texas, sell taxable services in Texas. Yes, there are some services that are actually considered taxable, and you actually are supposed to charge sales tax for those services and then turn in that sales tax money that you collected for the Comptroller. And there's more information again on the Comptroller website to be able to see what type of services require you to charge sales tax. And the last one says sell or lease tangible personal property or taxable services to customers in Texas from an out-of-state business and have revenue from Texas of $500,000 or more in the past 12 months. So here they're talking about, um, If you've ever heard of the term nexus, well, this is where there's a relationship between Texas and other states that if your business— say if, say if your business is in Arizona but your customers are buying from Texas, if you're selling $500,000 or more worth of product in Texas in a, in the most previous 12-month period, you're going to be required as an Arizona business to have a Texas sales tax permit in order to charge, collect, and turn in your— the sales tax that you collect from the Texas customers that you have. But the threshold is pretty high. So for Texas small business owners, you'll just want to be aware of where your sales are coming from. So if you're selling to customers that are in different states, if you notice that the sale amount is getting pretty high, what you're going to want to do is also make sure you check what the rules are for that particular state and see whether or not they have nexus rules as well and what that threshold might be. Because just for example, our neighboring state Louisiana also has a certain limit and it's not the same as Texas. So you'll want to look into that based on the amount of sales that you have. Definitely, you know, once you start noticing in the 12-month, in the most recent 12-month period, if you've had like say $50,000 or more, sales to customers that are in one particular state, then you'll also want to check that state's rules to make sure that you're in compliance and don't get in any trouble with that state. The next bullet point goes over what is tangible personal property, uh, what's a taxable service, what it means to be engaged in business. You're considered to be engaged in business in Texas if any of the following statements apply: you have a temporary or permanent location, office, warehouse, place, distribution, uh, in Texas that you operate directly or through an agent. You have an employee or representative in Texas who sells, delivers, or takes orders for taxable items. You perform services using company employees, authorized service agents, or, or subcontractors in Texas. You conduct business in any other manner in Texas. Additionally, you may have sales tax responsibilities if you are a remote seller, marketplace seller, or marketplace provider. So if you have your own eBay, Amazon platform, then you would be considered a marketplace provider in that case. The next one is, how do I get a permit? You can apply for a sales tax permit online, which I'm going to show you how to do today. And if you decide that you want to apply for the sales tax permit by filling out the paper form, you'll want to watch the other video that I made that shows you exactly how to fill in that form. and then you'll have the option to either mail it in or you can walk it right into the Texas Comptroller's local field office. Okay, the next FAQ is whether or not there's a fee for filing for the permit. No, there's no fee. The Texas Comptroller does not charge you anything for you to apply for the permit, so there's no cost involved if you're filing it yourself. The next one's really important. It goes over your obligations once you have a sales tax permit. The first thing it mentions is that if you have a brick-and-mortar location, you're required to post your permit at your place of business. So wherever you are doing business, you're required to put the permit up where you're actually doing your business. If you're online, doesn't apply. But if you're anywhere else, even if you're renting out a spot, that sales tax permit you get in the mail, you're supposed to post it on the wall. Second thing it says is you're required to collect sales tax on all taxable sales. So you'll want to make sure you understand whether or not a product that you're selling is taxable, which if it's a tangible product, like, you know, like a mouse, for example, if you're selling any tangible product, it is taxable. And we're assuming you're selling to regular customers, not to like wholesale buyers, somebody who's going to resell what you're selling, because then the rules are a little bit different, as long as they also have a sales tax permit. The fourth thing that it says is to make sure you File on time and pay on time. And by paying, I mean the money you collected from the customer, you make sure you turn that in when you're filing the actual return. Turn it in on time. That is very important to get done. You do not want to get hit with a $50 penalty or the other penalty and interest involved with not paying or turning in that tax money that you collected on behalf of the Comptroller. And the fifth responsibility is to make sure that you keep proper records. Because like I said, if you ever get audited, you're going to want to have some paperwork ready to go to turn in or to show whoever's auditing you from the Comptroller's Office to make sure that you can back up everything that you filed. So keep adequate records. It's really important. And they didn't put a bullet point next to the 6th item that they put up, but the 6th item is that even if you don't have any sales, just like I was saying before, you still have to file that tax return. You have to file the sales tax return and check that little box that says that you had zero sales, just so you can make sure that you're filing every single return. They don't care if you didn't have any sales, they just want to know whether or not you did and how much if you did, and also for you to turn in the money if you did. I know we're going over a lot of information in this video, but I want to make sure you're as informed as possible before you apply for this sales tax permit. If you're enjoying the information that I provided in this video so far, be sure to sign up on my website at lomarispa.com. I send out weekly business tips that you might find useful. Now let's get back to the video. The next FAQ goes over whether or not you can apply without an EIN, your federal tax ID number that would be issued by the IRS. So, uh, if you've started a business, normally you'll apply for an EIN, but some people don't get an EIN for whatever their personal reason is for that, then you would still be able to apply for a sales tax permit even without the tax ID number from the IRS. You would be using your social in that case. The next FAQ question is, do I need more than one permit? So I'm going to read this word for word. As a seller, you must have a tax permit for each active place of business. A place of business is an established outlet, office, or location that the seller or the seller's agent or employee operates to receive 3 or more orders for taxable items in a calendar year. If you have multiple active places of business, you will receive separate permits for each business location with the same taxpayer identification number but with separate outlet numbers. A warehouse, storage yard, or manufacturing plant is not a place of business for the seller for tax permit requirement purposes. Unless the seller receives 3 or more orders in a calendar year at the warehouse, storage yard, or manufacturing plant. So if you are selling at a location and you take 3 or more orders, then you will be required to have a sales tax permit for that location. And they'll issue you a separate permit per location, and they'll just number it Outlet 1, Outlet 2. You know, they'll number each location that you have, and it's labeled as an outlet, and then they'll assign a number to it. Then you'll get a separate sales tax permit that you'll post again on the wall of that location. And when you get ready to file your sales tax return, there's going to be— it's going to still be one link to click into for the sales tax return itself. But when it opens up, it's going to have a line for each outlet location that you have. So if you have 3 different locations, you'll see 3 different lines. They'll be asking you what's your total sales for that. For each location. So you'll have to list each one. They'll ask you for the taxable sales for each one, you know, and so on and so forth. So it's like, it's kind of like doing 3 sales tax returns in one if you have more than one location, but still the same process, just as easy as it is to file for one location. But that's just something to keep in mind in case you have more than one location. The next one is about whether or not you can use your sales tax permit number from your old business from an existing business that you purchased. And it says, so if you bought another business and that business already had a sales tax permit, the question here is whether— is asking whether or not you can still use their tax permit number at the same location that you purchased, as well as whether or not if you had one at your old business, whether or not you— you— whether or not you can reuse that sales tax number again. It says if you held a permit for a previous business or your permit's been canceled or it's inactive, you have to reapply for a sales tax permit for your new business, even if it's at the same location. Then the next paragraph says a permit is valid only for the person for whom it was issued and only for the business at the address shown on the permit. It cannot be transferred from one owner to another. For additional information on buying an existing business, there's another link there that'll give you some more details about how to handle that type of situation, and they've got their own set of FAQs on that page. And so this next FAQ is similar to the previous one, so it's talking about like if you're— if the ownership of your business changes, whether or not you need another permit. Yes, you do. You need a new sales tax number because basically think of a sales tax number as your account number with the Comptroller. You wouldn't want another person that bought your business from you to just take over your tax account, because then you'd still be responsible for everything that they do on that tax account. You want for that new owner to get their own tax permit number, and that way they'll be held responsible for all of their actions. So that's why it's important. That's why this rule is in place about not letting different owners use each other's tax ID. It also tells you that if you're a sole proprietor and you incorporate your business, or you form a partnership, or you form an LLC, then it's considered a change of ownership in those cases as well. So say if you were selling product as a sole proprietor, you were doing great, and then you decided, hey, I'm going to go ahead and apply for to get my LLC set up so that I can do a little bit more business under that structure. Well, as far as the Texas Comptroller is concerned, they would consider that a new business and a separate owner because of the way that it's structured. So you'd have to apply for a new permit. You'd need to close the old one for the sole prop, and then you would need to open up a new account, set up and apply for a new permit under that new LLC. Next FAQ talks about if you close your business, can you keep your sales tax permit? No. You can't. In fact, they— not only can you not keep it, they want you to officially close your account with them, and they want you to send back the actual sales tax permit to them. Seems kind of odd, but I understand, because they don't want for people to have a permit just kind of laying around or abusing when they no longer have an active sales tax account, because the permit's not active anymore once they close down their business. With the comptroller, you know, officially closing it down and closing out that account. That way they don't have to file any more sales tax returns. So it is important to make sure you close out your account when you decide to close your business. Next one's an obvious one: if your mailing address changes, yeah, you need to update the comptroller. I've created another video on how to update your address or your contact information if you need to do that. Just make sure you watch that other video and it'll tell you exactly how to do it step by step inside of your Webfile eSystems account. The last thing on this page that I did want to touch on was that once you apply for the Texas sales tax permit, you're probably going to get a bunch of spam calls, mail, all of that stuff from telemarketers and stuff, because telemarketers are very keen on keeping up with what new businesses get registered because they want to try to sell you their services and products as well. So just be ready for it. You'll be, you know, you might start noticing a bunch of mail pop up, you know, in your mailbox that you're like, I didn't ask for this. Of course you didn't, but you did sign up for a sales tax permit, and that's public information that is available from the Comptroller's Office, and the telemarketers do request it so that they can solicit to you. This next link I'm putting up is going to help you figure out whether or not you need a Texas sales tax permit and whether or not you qualify for the permit. So click on the link And let's, let's see. So when you click on the link, you'll see new permit applicants, and there's a link there to apply directly for the permit. But you'll want to read the helpful information section. The first item they listed is who must complete the application. If you're engaged in business in Texas, if you sell or lease tangible personal property in Texas, or you sell taxable services in Texas. As long as you're engaged in business in Texas, and you qualify under one of those terms, you're selling product or you're selling a taxable service, yes, you'll need a permit. So the next one just says that this specific permit, because the Comptroller issues a number of different permits, the sales and use tax is just one of them. And so they're just letting you know that when you get this permit, it applies specifically to sales and use tax. 911 surcharge and fees and sales tax surcharge on diesel equipment probably does not apply to you. The next line talks about the applicant qualification. So the applicant needs to be at least 18 years old. So you have to be at least 18 years old. And if you're a minor, your parent or guardian can actually apply for your permit on your behalf. The second paragraph under there talks about if you are a sole owner, partner, officer, or director and you don't have a Social Security number, then you would not be able to use the online application. You would have to fill out the paper return, which Like I said, you'd have to follow the instructions in my other video that explains how to fill out the paper application and get that submitted. The last section on here is the required documents. If you're a sole proprietor, you'll need your Social Security number. If you have a partnership, then they're going to want your Social Security number or federal tax ID number for each partner. So partners can be an actual person, an individual, and in that case, then you'd provide your Social Security number, or a partner can be another business like this business is a partner of this business, or this business is a partner of this person. So then you need the Social Security number of this person, and you need the tax ID number for this business. So that's how that works when it comes to what information you'll need, which is when it comes to a partnership. If you're a Texas corporation, you're going to need the file number that was assigned to your business from the Texas Secretary of State, and you're going to need the Social Security number for each officer and director that's involved in the corporation. Last thing you're going to need is your NAICS code. And this code is based on what industry your company, your business is involved in. And so you'll want to go to the link that you see on this website if you don't already know your NAICS code. If you've set up your business properly, like with the Secretary of State or however you set up your, your business, normally you would have needed to already have found your NAICS code. If you already know it, you're in good shape. If you don't know it already, You can click on that link here on this page and you can look up what's the code that closely matches the business that you're in and what type of business that you conduct. And so you'll need that in order to fill out your sales tax permit application. If you've gotten this far in the video and you're sure you need to apply for a Texas sales tax permit, we're going to go into that right now and get started with the application. So the first thing you're going to need to do is to go to the website address that I show you here. And the link is also in the description. If you have an account already set up, go ahead and log in. If you don't, make sure you watch the other video that I created that shows you how to set up a Webfile eSystems profile. Once you're logged in, if you've never done any business with the Comptroller before and you, you've only set up your profile, when you first log in, you'll look for eSystems Services, and you'll— the first option should be Register for Texas Sales and Use Tax. When you click on that, you're going to see the Texas Tax Registration. It's going to give you some information about the application requirements, that you have to be at least 18 years old, and that a parent can apply for you on your behalf if you're a minor. And then it tells you that you can file the whole thing online electronically and also sign it, do it like an e-signature online, uh, at the end of the application. It's going over the things that we talked about just a second ago about the requirements, uh, the Social Security numbers that you're going to need. Your federal tax ID number if you have one, your— if you're a corporation, your file number with the Secretary of State. They'll also need the name of your bank, and they're going to also ask you for your NAICS code. So you'll need to have already looked up what your NAICS code is and be ready to put that inside this application. And they're reminding you that if you have like a suite or apartment number, make sure that you put your complete mailing address because it is very important that you're able to receive your mail that the comptroller will be sending out to you. Especially the first letter that they're going to send to you along with their permit. You're going to want to make sure you have a good mailing address on file to receive that permit and the letter that they send you, because the letter that they send you is going to give you your Webfile number that'll allow you to file your sales tax return online. If you don't have that Webfile number when you get ready to file your sales tax return, you're going to have to go through some extra steps in order to get that. Got another video out there that'll show you exactly how to do that. Because you're going to need it to file your sales tax return. Also tells you that you're going to need Adobe Reader and you'll want to connect to a printer so that you can print a copy for yourself. Or normally I just save everything as a PDF. That way I have a digital copy of whatever I fill out online. And then lastly, it tells you it's going to take 2 to 3 weeks to get that permit in the mail. So go ahead and click continue here. The screen lets you know that you've got 30 minutes to fill out the application. If you need more time, there's going to be a little popup that comes up that you'll need to click on if you need more time to complete the application. But I don't think it'll take that long. So let's go ahead and get started. So the first question is asking about your ownership type. You're going to mark whichever one applies to your business. If it's a sole proprietor, corporation, or a limited liability company, a general partnership, limited partnership, a joint venture, or association. I'm going to mark the corporation slash limited liability company, which is an LLC. And then click Continue. Then it tells you to select the type of corporation, uh, that you have, or limited liability company. So I'm going to mark the limited liability company option for Texas. They also have a section for non-Texas. That's if you have a business that's not from Texas and you're getting a permit. I'm going to fill this out as if we've got an LLC applying for sales tax permit. Click Continue, and it's asking you for the organization's name. So we're going to type in a name here and the Texas Secretary of State's filing number, and it asks for the Texas taxpayer number. And if you're an LLC, you should have already been issued one. That would have been that first letter that you received from the Comptroller once you registered your LLC with the Secretary of State. It asks you what state that your, your LLC was formed in. I'm going to put Texas here. Has this entity ever been involved in a merger within the last 7 years? No is the answer. Answer to that, and we're going to click Continue. Now, the information that you enter has to be exactly correct because they are going to look your information up to match you up. And if you enter the correct information for your business, here you're going to see on this page the name of the company that your information matched up to. On this page, it's also going to ask you whether or not you need to register for any of the other taxes that you see on this screen. And if you don't need to apply for any of those, just click Continue. Next section, you'll see there's tabs at the top to let you know the progress of the application. So the first one was about the organization. This next one we're on is the contact information, so you'll go ahead and enter your information there. You only need to fill out the part for the US side, not the non-US side. Once you enter your address, then it asks for the contact information for the business records, so you'll put the name of the person who they need to contact, a phone number, and then the email address. And you'll get to also list on this page if you have an alternate contact person that they should reach out to in case they can't reach you. If just you and you're like a single-member LLC, and you don't have to put anybody else here in the alternate contact information. Then the last section on this page asks about your business information. It asks about your business website address, the name of your bank, so you'll just enter that there, and you'll mark whether or not it's a business or a personal account. So you can have either one, uh, as far as the Comptroller is concerned. They just want to know which bank that you bank with. but hopefully since you're running a business, you have a business bank account set up for your business. It also asks you if you have a credit card processor, uh, already set up. If you do, go ahead and enter that here. If you don't, then you'll just leave this blank because there's not an asterisk next to those items, so they're not required to be filled in on this application. But if you already have that information, you should go ahead and provide that here and then click continue. Okay, the next part is asking about your business Activity. So they're going to ask you yes or no questions here. It asks, do you maintain a distribution center warehouse office other than your place of business or other physical location where business is conducted? For the sake of this example, we're going to answer the questions here as if we've got a single-member LLC with a home-based business that sells product on their website. So the next question is, do you have any representative agent salesperson canvasser or solicitor who operates under your authority to conduct business in Texas, including selling, delivering, or taking orders for taxable items. If it's just you, like I said, we're going to assume that it's an individual and you don't have any of these other employees or any other scenarios that we just described here, salespeople or anything like that. So we're going to click no for that. But as we're filling out this application, if the questions apply to you, make sure you mark the appropriate answer, whether it's yes or no for your business. I'm just giving an example of what it would be like for a single-member LLC with a home-based business selling product online through their e-commerce store for the sake of this application that we're doing here on this video. The next question is, do you derive receipts from the sale, lease, or rental of tangible personal property situated in Texas? This includes a home-based business located in Texas. So it's asking whether or not you sell product because it says a tangible personal property from your home. For the sake of this example, we're going to say yes. The next one is, do you provide on-site taxable services at customer locations in Texas? The answer is going to be no. We're not going to have this apply to anybody that has a service-based business. But if your, if your business is service-based and you see that on the Comptroller's website your service is taxable, make sure you mark yes here. Next question is, do you sell at temporary locations like fairs, trade shows, etc. in Texas? I'm going to mark no here. Do you have a franchise or licensee operating under your name who's required to collect sales and use tax in Texas? I'm going to answer no here. Do you have a substantial ownership in or are owned in whole or substantial part by a person who has a business in Texas and sells the same or similar line of products under a business name that is similar to your business name? The answer is no. Don't forget to utilize these bubbles that they have here in case you need more information. Like on that one, it says you directly or indirectly own 50% or more interest, or you're directly or indirectly owned 50% or more interest by a person or entity that maintains a business location in Texas and sells the same or similar line of products under a business name that is similar to your business name. So they try to help you answer the question as correctly as possible by providing a little bit extra information on some of these questions. Next question: Do you have a substantial ownership in, or are owned in whole or substantial part, by a person who maintains a location in, in Texas to advertise, promote, or facilitate sales, deliveries, or returns of your products? The answer is going to be no for our example, but make sure you consider whether or not it's no for your business as well. Next one is, do you have internet or mail order sales? Since we said we're using an online e-commerce website, then we're going to say yes for this one here because we're selling product through a website. We're almost done with this page. The next part says, do you own or operate a marketplace, electronic or physical, where you make sales on behalf of third-party sellers? This does not apply to you if you sell your own items on someone else's marketplace, such as eBay, Amazon, or Etsy. So we're going to assume you're not a marketplace platform and I'm going to mark no here. Will your anticipated monthly taxable sales exceed $8,000 per month? If you're not expecting your sales to exceed $8,000 or more per month, then mark no here. Next question: Will you sell alcoholic beverages? No, we won't be selling alcoholic beverages. Just so you know, if you were to sell that, there's a different permit required for that. Not applicable in this situation. Will you sell memberships to a health spa? And I'm going to click the bubble for that one. If yes, mail a copy of your health spa certificate of registration to the Sales Responsibility and Correspondence, Texas Comptroller of Public Accounts address. So they know that you're going to be required to have another certificate if you're selling memberships to a health spa? In this case, we're not, so I'm going to mark no. Will you sell electronic cigarettes? No, we won't. Will you sell fireworks? No, we won't. Each of these things that they're asking you, they're kind of digging to find out whether or not you'll be required to apply for another permit that the Comptroller issues based on what it is that you sell. So for example, if you were selling firecrackers and that was the product that you were selling, then you might be required to get another permit they would let you know after you file this permit application whether or not you need to apply for another permit based on the answers that you gave to certain questions that they ask you. Now that we're done with this page, we're going to click continue and it's asking you to review all the business activity information and then click continue. Then it's encouraging you to go paperless and to file online with the Webfile. And they're telling you that you'll get your Webfile number that will allow you to be able to file your sales tax returns online. Um, they'll— you'll get that in that first letter that they send you. So make sure that you hang on to that letter when you get it so that you can go ahead and, um, connect your tax account, your sales tax account, to your profile. Because you already have a profile right now, that's how we're applying for this permit, because you've logged in, that's your profile. Once you logged in and you apply for that permit and you've got that permit, then you'll be required to file sales tax and you'll get that Webfile number and you'll connect that tax account, your sales tax account, to your profile. And that way, when you log in, you'll see your sales tax information and you'll be able to file your tax returns on whatever schedule that you're supposed to file it. Once you've read this page, go ahead and click Continue. On this next section, they're asking you about the officers who are responsible for this LLC that we have. So we're going to go ahead and fill out the person's name, whoever owns the company. And see here, they're asking for associate security number as well. They want to make sure that they can hold person who's responsible for getting the sales tax permit to also be responsible for the filings and turning in the, the payments and all of that. They want the phone number of the person and the title. They also want the person's driver's license number, so you want to enter that there. There's the option to enter their email. You can enter that there as well if you have a separate email address for that person. If this is just for yourself, you don't have to list it again because otherwise you might end up with duplicate emails from them. Last section on this page is the mailing address for that officer, and the mailing address for the officer, you can use the same address that you're using for the business. After you've filled out the address, go ahead and click Continue. Once you've added the officer, if you have more than one officer, or you have, you have more than one director or manager or any other person that you need to list, go ahead and click Add Another Officer there. But if it's only yourself, If you're a single-member LLC, you can go ahead and click Continue because we're done with that part. This next part is asking about when you're expecting to start selling, and it says enter the date that you will begin making sales or begin other operations that are subject to Texas sales and use tax. So for example, if you're going to start buying product and you're going to use like your resale certificate so that you don't have to pay the sales tax, if that's the first thing, your first action that you're going to do using your permit, then write the date that you anticipate doing that. If otherwise, you can just enter the date that you expect to start selling. Like, say if your website is going to be live as soon as your permit is in, you can give an estimate of when you expect because this is going to take the 2 to 3 weeks to get to you. You can go ahead and anticipate what that date is going to be and enter that date here. The date you enter here will be the date that they'll go off of when they assign you your filing frequency. So say if you apply for the permit in May, you say that your first sales is going to be in June. Well, June is the last month of the second quarter, and so you'd be required to file your first sales tax return. If you're assigned the quarterly filing schedule, then you'll be required to file by July 20th. For example, if your first sale is going to be in June. But if your first sale is going to be in July, for example, and you're filing for your permit now, your first sales tax return will be due in July, August, September, October. So it'll be due October 20th, and it's due on the 20th of the month of whatever schedule that you're on, unless it's on a weekend or a holiday. If it's— if the 20th is on a weekend or holiday, it'll fall on the following business day. So I'm not looking at a calendar right now, so I'm not sure which, which day that falls on. But I was just trying to give you an example of what that schedule looked like based on when you anticipate starting to make sales or what date you tell them, the comptroller, in this application that you anticipate making sales. Make sure you enter the date in the format that they're asking for. Then the next question asks if your business is in Texas or if it's out of state. I'm going to mark it's in Texas. We're going to go down here to the last Last two sections here, it says the Texas business location information. So the business name, and this is the name of the location that your business is going to be. If you're a home-based business, then you're still going to fill in your company name here and the street address for where you're going to be. Fill that all in. And the reason why they need to know the actual location's address is because your actual rate of tax that you're supposed to collect is based on the location from which you're selling. So if you're a home-based business, it's going to be based on the tax that's applicable to your actual address at home, which, like in Dallas, is generally 8.25%. It asks, is the place of business operated from home? I'm going to mark yes. And then it asks for additional directions if the location is like in a rural area. In this case, it's not. We're going to go to the last part here that says the business location owner or the landlord. So if you have a storefront, for example, and you have a landlord, you would enter the landlord's information, the landlord's address, and then click continue from here. If you don't have like a business location owner that's separate from yourself, then you don't have to enter that here. This section here is not required. It's not marked off with an asterisk. So I'm going to click Continue at this point. On this part, it's asking, do you have internet or mail order sales? So we're going to put yes because our example is an e-commerce store and click Continue. Then we're on the next part where it asks for that NAICS code. If you don't already know your NAICS code, then they're also going to give you some different categories that your business might fit into, and you'd click the bubble next to the one that closely matches your business for what you actually do for your business. What you sell. If you do know your code and you did look it up ahead of time, then go ahead and enter that in the first box and scroll down and click Continue. Now it's giving you the option to add another business location. If you don't have another business location, you can go ahead and just click Continue. If you do have another business location, then you can click Add Another Business Location. Okay, now we're on the Tax Responsibility page, Wireless and 911 Emergency Communication Fees. Will you sell prepaid wireless telecommunication services? No, we won't. So they're asking you if you're a phone service and we are not. And then the next question, will you provide telecommunication services under Health and Safety Code Chapter 771? No, we won't. Click Continue. Next one is asking you again about the e-cigarette sales. Will you sell electronic cigarettes over the internet by mail order or telephone? Answer is no for us. And then if it is yes for you, make sure you fill that out for your business. Then click Continue. Uh, the next question asks about Off-Road Heavy Duty Diesel Equipment Surcharge. Do you sell, lease, or rent off-road heavy duty 50 horsepower or more diesel-powered equipment? No, we don't. Click Continue. The next part is asking about whether or not you are purchasing an existing business In our example, we did not. This is a brand new business. We didn't purchase an existing business. So click no here and then click continue. Almost done. Okay, we're on the last tab here where you need to confirm and submit your application. So you're going to go over every detail on this page and make sure it is correct because you do not want to send in an application with incorrect information. Now, because we're doing the example here, I am not going to submit this application, but I do want to encourage you to make sure you review every section on this page. It goes over the preparer information, which is going to match your profile that you set up with eSystems. So it should have your name, your phone number, and your email address. And then it's going to have the taxpayer information that you entered, the contact information that you entered, the business activity answers that you provided for the questions that they asked. It's going to have all those answers there. It's going to have the officer information that you filled in, the business location information that you filled in, and the last few questions about, um, the wireless telecommunications, e-cigarettes, heavy-duty diesel equipment, and purchasing of an existing business. If everything on this page is correct, click submit, and then you'll be finished with your application. And after this, all you have to do is wait for your actual permit to come in the mail. Now, I'm not clicking submit here for this example, but I do have another example. So let me pull that screen up real quick. Once you click submit on the next page, you're going to have a declaration of understanding and intent. They want to make sure you're clear about what it is that's going to happen here based on your application. So once you've read the declaration on this page, Make sure you read it carefully. Go ahead and click accept. All right, you're all done. Now all you have to do is print your application summary for your own records, cuz you want to make sure you have a copy of what it is that you submitted in your application for your own records. Um, go ahead and click on that, and then you're also going to see that you're now officially registered. Because you're doing this all online, things are more streamlined, and it's not like it used to be where you literally have to wait for the application to get approved and then a sales tax permit. Like, there's— this process is much shorter because you're doing it online. You'll still need to wait the 2 to 3 weeks for that permit to come in the mail, but technically you're already set up for that sales tax account. On this screen, they're also showing you that you've already been assigned to file quarterly. That's the most frequently assigned filing frequency. Bit of a tongue twister. So most people get assigned quarterly is what I'm saying. And then it also tells you when your first sales tax return is due. So that way you can go ahead and put that in your calendar so that you can have a reminder to make sure you file on time because you do not want to have to pay the penalties involved. You can also lose your ability to have a sales tax permit if you fail to file your sales tax returns on time and make the payments like you're supposed to. So make sure you keep up with your filing date. They've given you the first one. For yours, it'll be based on what date that you said you're expecting to start making sales. And if you scroll down, you'll see your taxpayer number. If you had an LLC, you already had your taxpayer number. And at this point, you are officially done. You can go ahead and log out. You can click one, one of the links like view the tax due date calendar, or you can simply log out because you are all done. As long as you've clicked on the print application summary, and either printed it like a hard copy or at least saved a PDF copy of it for your own records. But you're all done. Don't forget, once you actually get that permit that comes in the mail, to make sure you put it up on your wall for your business location. Or if you're a home-based business, make sure you file it somewhere safe because you'll need it in case you go to a vendor and are looking to purchase without having to pay sales tax. You'll be able to take that to them. Or if you're looking to purchase in bulk with some vendors, they'll ask for your sales tax permit to show proof that you are able to purchase the products. Just something else to keep in mind is when you get your sales tax permit and you go to make purchases with vendors, just know that they have a responsibility to make sure that when they're selling product to you as a reseller, if they think that you're not planning to resell it, like you can't buy something that you're technically going to end up using for personal use that you're not planning to resell. They have an obligation to sell responsibly to resellers for the type of products that your sales tax permit allows you to sell. So you can't go and use your sales tax permit to buy a car without paying sales tax if you're a t-shirt company because you're not in the industry of selling cars, you're in the industry of selling t-shirts, for example. So that's just something to keep in mind. That vendor is not going to take a risk if they feel like you're not planning to resell the products that they're selling just because you're trying to get either a bulk discount or you're trying to avoid paying sales tax. So just keep that in mind. Be a responsible sales tax permit holder and make sure you file your sales tax returns on time. If you have any questions, make sure you leave it in the comments below. Be sure to sign up on my website at LomaRispa.com. I send out weekly emails with business tips for small business owners like you. I hope you enjoyed this video. Until next time.