Texas Sales and Use Tax Consulting
Through our alliance with State Tax Professionals, the Hegwood Group offers consulting services for sales and use tax in Texas. Our dedicated team of Texas sales and use tax consultants will work to resolve your tax needs and problems. It is our first priority to protect all types of businesses from the devastating effects of non-compliance with the Texas sales and use tax laws, regulations and procedures. We provide comprehensive sales and use tax consulting services.
TAXABILITY ISSUES AND PRIVATE LETTER RULINGS
Tax consulting services are available for sales and use tax projects including, but not limited to:
- Taxability issues
- Multi-state research
- Private letter rulings
- Nexus reviews
- Voluntary disclosure agreements
TEXAS SALES AND USE TAX AUDITS AND APPEALS
Client representation throughout all stages of a tax audit and are fundamental to achieving a successful audit. Our goal is to reduce the audit liability for our clients. Our Texas sales and use tax audit defense services are available to:
- Assist in all stages of the audit process — our experts work with the auditor to ensure an accurate audit assessment; and
- Assist the taxpayer in reducing audit liability after the initial assessment has been made by the state.
TAX OVERPAYMENT/REFUND REVIEWS
The Texas sales and use tax consultants at Hegwood provide detailed refund reviews to our clients according to their business needs. The refund reviews are conducted in order to provide a complete review of accounts payable for the purpose of identifying overpayments of sales and use tax. Services may include:
- Identifying vendors for possible overpayments of sales and use tax
- Scheduling all vendor invoices that qualify for credits or refunds of any overpaid taxes
- Filing tax refund claims and/or amending returns with the proper taxing jurisdictions to obtain credits or refunds for overpayments
What is the Texas Sales and Use Tax?
Texas applies a tax to many goods and services at the point of sale or when goods are consumed. Sales tax is the term for paying the tax at the time of purchase or lease. Use tax applies when taxable goods have been obtained tax free at the point of sale and are later consumed or resold.
The state imposes a baseline tax rate on a variety of goods and services. In addition to statewide sales tax, numerous counties and municipalities have their own sales and use taxes for purchases made in their districts. Consumers pay the combined amount.
Sellers bear the responsibility to collect sales and use taxes and remit them to the state government. These funds never belong to the seller, who will face penalties if taxes are not forwarded to the state.
Who is exempt from Sales and Use Tax in Texas?
Like many states, people do not owe sales tax when they buy groceries, water, and over-the-counter or prescription medications. The state also does not tax wastewater disposal services.
Manufacturers often have an opportunity to take advantage of Texas sales and use tax exemptions. The state waives the tax on the purchase or lease machinery, equipment, or parts used in manufacturing tangible personal property meant to be sold. To qualify, the equipment must have a useful lifespan longer than six months. Services that are normally taxable but used for manufacturing are also exempt.
Similarly, manufacturers may qualify for an exemption on taxation of natural gas or electricity. The company must show through a predominant use study that at least 50% of the power contributes directly to product manufacturing. Data centers that meet a long list of requirements also enjoy a sales tax exemption on their power usage and some tangible personal property.
Taxes that would normally be payable for construction labor may be avoided on labor for new buildings or to expand manufacturing or oil and gas refinery operations.
Entities engaged in qualifying research and development, as defined by the federal government, receive several exemptions for materials, software, and equipment. Sales and use tax exemptions also include video and audio production companies producing media for commercial purposes.
Government initiatives to promote economic growth may leverage a range of sales and use tax exemptions when meeting the criteria.
How is Texas Sales and Use Tax calculated?
Statewide, the minimum sale or use tax percentage is 6.25% of the price for all qualifying purchases or uses. Numerous counties and municipalities collect additional sales taxes within their districts that add up to 2% to the total taxes owed. For example, local city and county rates in the Dallas area add a total of 2% to the 6.25% state rate, taking the local sales and use tax up to 8.25%.
What documents do I need for my Sales and Use Tax permit Texas?
To apply for the sales and use tax permit Texas, you’ll need the Social Security number or federal employer’s identification number for the owners, partners, or corporation seeking the permit. For a Texas corporation, you must include your corporation file number from the Secretary of State. The director and officers of a corporation must also supply their individual Social Security numbers. Finally, you must determine which North American Industrial Classification System (NAICS) code describes your company. With this information, you can fill out the Texas Online Sales Tax Registration Application.
ARRANGEMENT OF SECURE PAYMENT PLANS FOR TAXPAYERS
Sales and use tax consultants can also provide help for taxpayers in order to deal with the often aggressive efforts of state tax collectors. We assist our clients in stopping levies, and work to generate a feasible and secure tax payment plan.
This way, we keep the collectors off our clients so they can continue running successful businesses. For any information on sales and use tax in Texas, contact Hegwood Group today.