Unsure where you owe sales or use tax or dealing with legacy compliance pain?
Check Your ExposureTexas sales tax nexus determines when a business is legally required to register, collect, and remit Texas sales and use tax. Many businesses create nexus long before they realize it, especially as revenue grows, inventory is distributed through third parties, or employees and contractors operate in Texas. This page explains how Texas sales tax nexus is created, why exposure often goes unnoticed, and how businesses can identify risk before audits or enforcement actions.
Sales tax nexus is the connection between a business and the state of Texas that triggers tax collection and filing obligations. Once nexus exists, Texas expects correct tax collection on taxable transactions and proper reporting for the periods involved. Nexus applies regardless of whether a business is based in Texas or out of state.
Texas enforces economic nexus based on gross revenue sourced to Texas.
Economic nexus is created when a business exceeds:
Once the threshold is crossed:
Economic nexus applies even if the business has no physical presence in Texas.
Texas sales tax nexus is also created through physical presence.
Common triggers include:
Even short term or limited physical activity can establish nexus.
Inventory stored in Texas creates nexus even when the seller has no other presence.
Common inventory related triggers include:
Inventory based nexus often creates exposure retroactively.
Texas marketplace rules can be misleading. While marketplace facilitators may collect tax on facilitated sales, sellers may still have nexus and exposure due to:
Marketplace sellers frequently discover exposure during audits.
Sales tax exposure develops when:
Exposure often includes tax, penalties, and interest. To better understand risk areas, review how sales tax exposure is identified.
Businesses commonly develop nexus exposure when they:
Most exposure is discovered after the fact.
Identifying exposure requires reviewing:
For methodology, see How to Identify Sales Tax Exposure in California
If your business sells into Texas, identifying nexus requires more than checking current registrations. Historical revenue, inventory movement, and third party activity must be reviewed. Use the Sales Tax Exposure Calculator to uncover Texas nexus risk.
TaxMap helps businesses by:
TaxMap focuses on exposure visibility before enforcement.
If you suspect Texas sales tax nexus or want clarity before a Texas Comptroller review, early analysis matters.
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