What the Form Is For
Form 01-156 is the Texas Use Tax Return that non-permitted purchasers use to report and pay taxes on items they bought without paying Texas sales tax. Think of use tax as the flip side of sales tax—it ensures that Texas collects the appropriate tax revenue even when a seller doesn't collect it at the point of sale.
If you purchase taxable goods or services from sellers who don't charge Texas tax—such as out-of-state retailers, online sellers without a Texas presence, or foreign vendors—you're responsible for paying use tax directly to the Texas Comptroller of Public Accounts. This applies to tangible personal property and taxable services that you store, use, or consume in Texas. Common examples include buying a camera from a New York website that doesn't collect Texas tax, purchasing furniture from an Oklahoma retailer, or bringing taxable items back from Mexico for use in Texas.
The form cannot be used by businesses or individuals who already hold a Texas sales and use tax permit. Those permit holders must report their taxable purchases on their regular sales and use tax return instead. Form 01-156 is specifically designed for non-permitted purchasers who occasionally need to remit use tax on out-of-state or untaxed purchases.
When You’d Use Form 01-156
Filing Deadlines Based on Tax Amount
Texas law establishes specific deadlines for filing Form 01-156 based on how much use tax you owe. If your total use tax liability for the calendar year is less than $1,000, you can file a single return and pay by January 20 of the following year. However, once you reach or exceed the $1,000 threshold during any calendar year, you must file and pay by the 20th of the month following the month you crossed that threshold.
For example, suppose you purchased an untaxed item in March and owe $600 in use tax. You can wait until January 20 of the next year to file. But if you buy another untaxed item in September that brings your total use tax owed to $1,200, you must file and pay by October 20—the month after you exceeded the $1,000 mark.
Late Filing Penalties
Late filing carries financial consequences. Texas imposes a 5 percent penalty if you pay between 1 and 30 days late, and a 10 percent penalty if payment comes more than 30 days after the due date. An additional 10 percent penalty applies if you fail to pay by the date specified on a Notice of Tax Due, bringing total penalties to 20 percent. Interest begins accruing on the 61st day after the due date at a variable rate determined annually.
Amended Returns
If you need to correct a previously filed Form 01-156, you can submit an amended return. Write "Amended Return" at the top of a corrected form and include any additional tax due plus applicable penalties and interest. Texas doesn't have a separate amended use tax form—simply complete a new Form 01-156 with accurate information and clearly mark it as an amendment.
Key Rules or Details for 2020
Tax Rates
Understanding use tax rates and credits is essential for accurate filing. The Texas state use tax rate is 6.25 percent, matching the state sales tax rate. However, local jurisdictions—cities, counties, special purpose districts, and transit authorities—can impose additional local use taxes up to 2 percent, for a maximum combined rate of 8.25 percent.
Local Rate Determination
The local use tax you owe depends on where you store, use, or consume the item in Texas. The Texas Comptroller provides an online Sales Tax Rate Locator tool to determine the exact rate for any Texas address.
Credit for Taxes Paid to Other States
Texas offers a credit for sales or use taxes you've already paid to other states on the same purchase. This prevents double taxation when you buy an item in another state and bring it to Texas. For instance, if you purchased a laptop in Louisiana and paid that state's sales tax, you can subtract the Louisiana tax from your Texas use tax liability. However, if the other state's rate is lower than Texas's combined rate, you still owe the difference to Texas.
Exemptions
Certain purchases are exempt from use tax. Items purchased for resale in the regular course of business don't trigger use tax liability, though you must have proper documentation like a Texas Resale Certificate. Similarly, if you paid Texas sales or use tax to a seller who has a Texas permit, you don't owe additional use tax. Items used solely for demonstration or display purposes before resale also don't incur use tax, though free samples distributed to customers do.
Step-by-Step (High Level)
Step 1: Gather Documentation
Filing Form 01-156 involves several straightforward steps that ensure accurate reporting and payment. First, gather documentation for all taxable purchases made during the reporting period where Texas sales tax wasn't collected. This includes receipts, invoices, and shipping records.
Step 2: Calculate Taxable Amount
Calculate the taxable amount for each purchase, which includes the sales price plus any shipping and handling charges.
Step 3: Determine the Correct Tax Rate
Determine the applicable use tax rate for each item based on the location where you first stored, used, or consumed it. Apply the correct combined state and local rate.
Step 4: Apply Credits
If you paid sales or use tax to another state, calculate your credit and subtract it from the Texas use tax owed.
Step 5: Complete the Form
Complete Form 01-156 by entering your identifying information, listing each purchase, calculating the use tax due, and applying any credits.
Step 6: Submit the Form
Submit your completed form with payment to the Texas Comptroller's office either online or by mail. Keep copies of your completed return and all supporting documentation for at least four years.
Common Mistakes and How to Avoid Them
Using the Wrong Form
One of the most frequent errors is misunderstanding when Form 01-156 should be used. If you already have a Texas sales and use tax permit, you cannot use this form.
Excluding Shipping Costs
Many filers forget to include shipping and handling charges in the taxable amount. Texas use tax applies to the total sales price, including delivery costs.
Incorrect Credit Calculations
Another common mistake involves incorrectly applying or forgetting to claim credits for taxes paid to other states. Proper documentation is required.
Ignoring the $1,000 Threshold
Failing to track the $1,000 threshold can result in late filing penalties. Once you reach this amount, filing rules change immediately.
What Happens After You File
Processing and Confirmation
After you submit Form 01-156 with payment, the Texas Comptroller's office processes your return. Online filings receive immediate confirmation, while paper returns take longer.
Notices and Corrections
If you underpaid or failed to file when required, expect to receive a billing notice outlining penalties and next steps.
Collection Actions
For significant unpaid liabilities, the Comptroller may take collection actions such as liens, asset seizure, or license suspension.
Recordkeeping
Once your return is properly filed and payment is received, your account shows compliance. Keep all records for at least four years.
FAQs
What’s the difference between sales tax and use tax?
Sales tax is collected by the seller at the time of purchase and remitted to Texas on your behalf. Use tax is your responsibility when the seller doesn't collect Texas tax. Both taxes apply to the same goods and services but are collected differently.
Do I really owe use tax on items I buy online from out-of-state sellers?
Yes, if the seller does not collect Texas sales tax. You are legally obligated to pay use tax on taxable items delivered to Texas.
Can I file Form 01-156 if I have a Texas sales tax permit?
No. Permit holders must report purchases on their regular sales and use tax return. This form is only for non-permitted purchasers.
What documentation do I need to support my credit for taxes paid to another state?
You need receipts or invoices showing tax paid, including the rate, amount, and state where it was paid.
How do I determine the correct local use tax rate for my purchase?
Use the Texas Comptroller's Sales Tax Rate Locator by entering the address where the item was used.
What happens if I discover I should have filed use tax returns for previous years?
File overdue returns as soon as possible and include penalties and interest. Voluntary compliance generally results in better outcomes.
If I owe less than $1,000 for the year, can I choose to file monthly instead of waiting until January?
Yes. You can file earlier than required to stay organized and avoid forgetting.
