Key figures
Texas receivables
2026, with sources
SaaS is taxable, at 80%
Texas taxes data processing services, and the Comptroller counts software as a service among them. Twenty percent of the charge is exempt, so a $1,000 subscription to a Texas customer is taxed on $800, at 6.25% plus any local rate, up to 8.25% combined. Information services are taxed on the same 80% basis.
A seller outside Texas has to register once its total Texas revenue over the preceding twelve calendar months reaches $500,000. Texas counts dollars, not transactions, and includes nontaxable sales and sales for resale. The permit must be in place and collection must start no later than the first day of the fourth month after the threshold is crossed.
Local rates and filing
Remote sellers can elect the single local use tax rate, 1.75%, instead of tracking each city, county, transit and special district rate; a seller with a Texas office can’t. Returns are due on the 20th, monthly, quarterly or yearly as the Comptroller assigns. Resale and exemption certificates are the Comptroller’s Form 01-339, kept on file and not sent in.
Customer credit balances and unapplied payments that sit untouched become unclaimed property, reported to the Comptroller each July 1.
The SaaS answer can move with the Comptroller. Texas taxes data processing by agency rule, not by a statute that names SaaS, and in September 2026 the Comptroller said his office would reexamine the data processing interpretations of earlier administrations, starting with an order to propose removing marketplace and platform fees from the rule. Until an amendment is adopted the current rule applies, so SaaS remains taxable on 80% of the charge.
Deadlines
- 20th of the following monthMonthly sales tax return
- Apr 20, Jul 20, Oct 20, Jan 20Quarterly sales tax return
- Jan 20Yearly sales tax return
The federal baseline
This page covers what Texas adds. The federal rules underneath it apply here too.
Common questions
Is SaaS taxable in Texas?
Yes. The Comptroller treats SaaS and application service providers as data processing services. Twenty percent of the charge is exempt, so tax is collected on the other 80%, at the state rate plus the local rate.
When does a remote seller have to register?
Only when total Texas revenue over the preceding twelve months passes $500,000 for a seller with no physical presence. The total counts taxable and nontaxable sales and sales for resale. A Texas employee or office is physical presence, and that creates a duty to register on its own.
Which local rate do we charge Texas customers?
A seller with no Texas office can elect the single local use tax rate, 1.75% for 2026, and charge 6.25% plus 1.75% on the taxable 80% of every Texas invoice. Without the election it charges the local rate where the customer is, up to 2%. A seller with a place of business in Texas can’t elect and collects the local tax for its own location or the customer’s, as the sourcing rules say.
Receivables next door
- NMNew Mexico receivablesNew Mexico taxes gross receipts, not sales: 4.875% state plus local, on services and software licenses, sourced to the customer. Remote sellers are in at $100,000.
- OKOklahoma receivablesOklahoma’s nexus threshold counts only taxable sales — $100,000 — and SaaS is generally not taxable. The state rate is 4.5% plus county and city tax.
- ARArkansas receivablesArkansas nexus is $100,000 or 200 taxable transactions. It taxes digital goods but generally not SaaS, at 6.5% state plus city and county tax.
- LALouisiana receivablesLouisiana taxes SaaS from 2025 at a 5% state rate plus parish tax. Remote sellers over $100,000 file once through the Remote Sellers Commission; sellers with presence deal with LDR and each parish.
Founder guides on this
- Sales taxSales tax nexus for startups: when you owe tax in a stateSince Wayfair, selling into a state can create a sales tax obligation. How economic nexus works, why SaaS is taxable in some states and when to register.
- RevenueDeferred revenue for SaaS startups, explainedAn annual prepayment is cash today and revenue over a year. How deferred revenue works under ASC 606, why it’s a liability, and the schedule behind it.
- StripeHow to reconcile Stripe payouts to your booksA Stripe payout is charges less fees, refunds and disputes, batched across days. How to book it gross, tie it to the bank, and keep revenue right.
More of the Texas guide
- AccountingAccounting and state tax in TexasCorporate tax, conformity to federal rules, apportionment and what it does to your books
- PayablesPayables and contractors in TexasPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in TexasWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in TexasRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in TexasCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.