Sales Tax Exposure in Irving, Texas

What is Sales Tax Exposure in Irving?

Sales tax exposure refers to the potential tax liability businesses face when they fail to comply with local, state, and district tax regulations. For businesses in Irving, exposure can arise from misapplying nexus rules, incorrectly applying tax rates, or failing to account for special purpose districts. These issues can lead to back taxes, penalties, and audits.

Understanding Sales Tax Nexus in Irving

• Physical Nexus: A business has physical nexus in Irving if it maintains a physical presence, such as an office, employees, or inventory, within the city.
• Economic Nexus: Irving, like the rest of Texas, enforces economic nexus laws. If a business makes over $500,000 in sales in Texas, it must collect and remit sales tax, regardless of whether it has a physical presence in Irving.

Special Tax Districts in Irving

Irving is part of several special purpose districts that impose additional sales taxes. These districts may include:

• Transit authorities
• Development zones
• Municipal utility districts

Each district may add a percentage to the base sales tax rate. Businesses must be aware of which special districts apply to their location in Irving to ensure accurate tax calculation.

For more information on special districts, visit our Sales Tax Special Purpose Districts page.

Sales Tax Rates in Irving

• Texas State Sales Tax: 6.25%
• Irving City Sales Tax: 1.00%
• Combined Sales Tax Rate: The total combined rate in Irving is 7.25% in most areas, though this rate can vary depending on special district participation.

Businesses should apply the correct rate based on the transaction location in Irving, as different districts may apply different rates.

Use Tax Exposure in Irving

Use tax is a tax on goods purchased from out-of-state vendors who don't charge Texas sales tax. Businesses in Irving may incur use tax exposure when:

• Out-of-state purchases of equipment, machinery, or inventory.
• Software and digital tools used by Irving-based teams but purchased from vendors outside Texas.
• Transactions that happen across city or county lines, where sales tax was not collected.

For more on use tax, visit our Use Tax page

Common Sales Tax Mistakes in Irving

Businesses in Irving often make the following mistakes, leading to sales tax exposure:

• Relying on ZIP codes instead of properly determining jurisdiction boundaries.
• Misapplying nexus rules, assuming no nexus because there is no physical location in Irving.
• Ignoring special districts, leading to missed tax obligations.
• Misapplying origin vs. destination sourcing rules for taxable sales.

These mistakes can accumulate over time, leading to significant tax liabilities and audits.

How Sales Tax Exposure Builds Over Time in Irving

Sales tax exposure in Irving doesn't result from one big mistake, but from small errors in tax rate application, nexus determinations, and failure to account for special districts. These mistakes build over time, leading to audit risks and larger liabilities.

Common causes of exposure include:

• Incorrect tax rate application.
• Missed special district taxes.
• Failure to register for sales tax on time.
• Incomplete use tax reporting.

Related Resources

• Learn more about sales tax exposure in Dallas, Fort Worth, and Plano.
• For more on special tax districts in Irving, visit the Special Tax Districts page.
• Use our Sales Tax Exposure Calculator to determine your Irving exposure.