Texas Use Tax for Businesses Guide 2026

Texas use tax applies when a business purchases taxable goods for use in Texas and sales tax was not collected at the time of purchase.

Use tax may apply when:

Use tax liability may arise even if your business does not sell taxable products.

What Is Texas Use Tax

Use tax complements Texas sales tax. When sales tax is not collected by the seller, the purchaser may owe use tax directly to Texas.

Use tax typically applies to:

Businesses may create use tax exposure when:

During audit, the Texas Comptroller often reviews purchase invoices to identify unpaid use tax.

If your business has nexus in Texas, reporting and compliance obligations may extend to use tax.

Nexus may arise from:

Once nexus exists, both sales and use tax reporting obligations may apply.

Failure to report Texas use tax may result in:

Use tax exposure is frequently discovered during sales tax audits.

Accumulated unpaid use tax may materially increase total liability.

Sales tax is collected by the seller. Use tax is owed by the purchaser when sales tax was not collected.

Yes. Businesses may owe use tax on taxable purchases where sales tax was not paid.

Yes. Use tax exposure is commonly identified during sales tax audits.

If your business has made out of state or online purchases, evaluate exposure before audit review.

Identify potential Texas use tax exposure before penalties escalate.