Texas Nexus Requirements
Texas's economic nexus threshold is $500,000. Learn about all nexus types, registration requirements, and compliance steps.
Economic Nexus Threshold
Economic nexus threshold is $500,000 in annual sales
Physical Presence Requirements
Physical presence includes property, employees, or inventory. This can include maintaining an office, warehouse, or inventory location; having employees or contractors working in the state; attending trade shows or conducting business meetings regularly; or storing property or equipment within state borders.
Employee Nexus in Texas
No state income tax; must register for unemployment insurance if employing Texas residents
Affiliate & Click-Through Nexus
Affiliate Nexus
AppliesAffiliate nexus applies to related entities
Click-Through Nexus
AppliesClick-through nexus provisions apply
Marketplace Facilitator
Texas requires marketplace facilitators (such as Amazon, Etsy, and similar platforms) to collect and remit sales tax on behalf of third-party sellers. If you sell exclusively through qualifying marketplaces, the marketplace handles your Texas sales tax collection obligations.
How to Register in Texas
Determine your nexus
Confirm you have economic or physical nexus based on the thresholds above.
Gather required information
You will need your EIN, business formation documents, and expected sales volume in Texas.
Register online
Complete the registration through Texas's official portal.
Begin collecting & remitting
Once registered, start collecting applicable taxes and file returns by the assigned schedule.
Frequently Asked Questions
What is the economic nexus threshold in Texas?
Texas's economic nexus threshold is $500,000 in annual sales. Once you exceed this threshold, you are required to register for sales tax collection and remittance in Texas.
What creates physical presence nexus in Texas?
Physical presence includes property, employees, or inventory. This can include having employees, offices, warehouses, inventory, or other tangible property in the state.
How do I register for sales tax in Texas?
You can register for Texas sales tax through the state's online portal. Visit the Texas Department of Revenue website to complete your registration. You will need your business information, EIN, and expected sales volume.
What are the employer tax obligations in Texas?
No state income tax; must register for unemployment insurance if employing Texas residents
Does Texas have marketplace facilitator laws?
Yes, Texas requires marketplace facilitators (such as Amazon, Etsy, and similar platforms) to collect and remit sales tax on behalf of third-party sellers. If you sell exclusively through marketplaces, the marketplace may handle your Texas sales tax obligations.
Does Texas have affiliate and click-through nexus?
Yes, Texas recognizes affiliate and click-through nexus. Affiliate nexus applies to related entities. Click-through nexus provisions apply.
What happens if I don't register for nexus in Texas?
Failing to register and collect applicable taxes in Texas can result in back taxes, penalties, and interest on uncollected amounts. Texas may also conduct audits that cover multiple prior years. It is recommended to register proactively once you determine you have nexus.
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