Professional app page template for Company controllers in Texas

Grocery stores and convenience stores not only sell food products, they also sell a wide variety of other items and services some of them taxable, and others nontaxable. For example, flour, sugar, bread, milk, eggs, fruits, vegetables and similar groceries (food products) are not subject to Texas sales and use tax.

Some items are exempt from sales and use tax, including: Sales of certain food products for human consumption. Sales to the U.S. Government. Sales of prescription medicine and certain medical devices. Sales of items paid for with EBT cards.

171.001. TAX IMPOSED. (a) A franchise tax is imposed on each taxable entity that does business in this state or that is chartered or organized in this state. (b) The tax imposed under this chapter extends to the limits of the United States Constitution and the federal law adopted under the United States Constitution.

For additional information, see our Call Tips and Peak Schedule webpage. Texas imposes a 6.25 percent state sales and use tax on all retail sales, leases and rentals of most goods, as well as taxable services.

The resale certificate is the sellerʼs evidence as to why sales tax was not collected on that transaction and should be retained in the sellerʼs books and records for four years.

Tax-exempt customers Some customers are exempt from paying sales tax under Texas law. Examples include government agencies, some nonprofit organizations, and merchants purchasing goods for resale. Sellers are required to collect a valid exemption or resale certificate from buyers to validate each exempt transaction.

Services such as shoe shining or repair, appliance repair, furniture refurbishing or upholstering, jewelry repair or cleaning and dog grooming are taxable. See Rule 3.292, Repair, Remodeling, Maintenance, and Restoration of Tangible Personal Property.

Webfile is an online tool that allows Texans to pay and report certain taxes electronically. Webfile saves time, postage and paper, and itʼs available 24 hours a day, seven days a week boosting both taxpayer convenience and state government efficiency.