What Texas Form 01-117 (2015) Is For
Business owners with only one location and a single local tax rate use Texas Form 01-117, a simplified version of the Sales and Use Tax Return. It allows eligible filers to report sales and use taxes without having to allocate their funds across different areas.
The form is filed with the Texas Comptroller of Public Accounts. It reports gross receipts, taxable goods, taxable services, taxable labor, and taxable items for a specific tax year or reporting period. It also accounts for tax collected from customers and use tax owed on qualifying purchases.
Businesses use this return to remit the 6.25 percent state rate plus applicable local taxes authorized under the Texas Tax Code. Combined state and local taxes may not exceed 8.25 percent, regardless of the number of local jurisdictions involved.
When You’d Use Texas Form 01-117
Individuals who hold a sales tax permit and operate their business from a single location should use Texas Form 01-117. This form applies the same local tax rate to all sales. This isn't suitable for businesses with multiple locations, varying tax rates, or complex allocation requirements.
Depending on past tax liability, the Texas Comptroller's Office determines the filing frequency, which may be monthly, quarterly, or annual. The twentieth day of the month after the conclusion of the reporting period is when the majority of returns are due.
Companies that sell on third-party marketplaces, drop ship, use Fulfillment by Amazon, or do business that creates an economic nexus across several states usually have to file Form 01-114 instead.
Key Rules or Details for 2015
Several important rules apply to Texas Form 01-117 for the 2015 tax year. Filing and payment methods depend on prior liability thresholds established by the Comptroller’s office.
Out-of-state purchases, taxable shipping and handling fees, and items purchased with an exemption certificate but subsequently used in a taxable way are all examples of taxable items that must be reported for use tax.
Despite the application of economic nexus laws to remote sellers, marketplace facilitators, and third-party sellers, Texas does not take part in the Streamlined Sales Tax. Companies must pay taxes to state and local governments if they meet nexus thresholds.
Step-by-Step (High Level)
Step 1: Verify form details and gather records
Verify that the taxpayer number, business name, and reporting period on Form 01-117 are accurate. Collect sales records and purchase records for the time period, including purchases that were exempt from sales tax and those that were subject to it.
Step 2: Report gross receipts and taxable sales
List all of your sales' total gross receipts, then list the taxable sales that are subject to state and local rates where your business is located. Make sure that the taxable totals don't include validly exempt transactions.
Step 3: Calculate sales tax due
To determine the amount of sales tax owed, apply the appropriate combined state and local rate to taxable sales. When sales occur in multiple locations, double-check the rate applied.
Step 4: Report use tax and apply discounts
Include things that were shipped to Texas without tax collected on your list of taxable purchases that are subject to use tax. Add the sales tax and use tax together, then apply any discounts for filing on time to get the total amount owed.
Step 5: File the return and submit payment
Sign, date, and mail the return to the Texas Comptroller along with payment by the due date. File a zero-tax return when required, and if you are eligible, use a recognized method such as Webfile, TeleFile, or paper filing.
Common Mistakes and How to Avoid Them
- Missing use tax on untaxed purchases: Review invoices from out-of-state sellers and third parties regularly, and track taxable purchases throughout the period so use tax is reported correctly.
- Using outdated local tax rates: Verify current rates through the Texas Comptroller before calculating tax, mainly when rate changes occur during the reporting period.
- Miscalculating the timely filing discount: Apply the discount only to the tax due and claim it only when the return is filed on time, since it is forfeited if the filing is late.
- Filing Form 01-117 after becoming ineligible: Switch to Form 01-114 when operations change, such as opening new locations or collecting tax at multiple rates.
- Keeping poor documentation: Retain sales records, exemption or resale certificates, refund support, and tax calculation workpapers for at least four years to reduce audit risk.
What Happens After You File
The Texas Comptroller's Office processes the return after it is filed and updates the taxpayer's account. Electronic filings are typically posted immediately, while paper filings may take several weeks.
When mistakes or underpayments are discovered, the tax authority issues a notice asking for correction or payment. You might be required to pay interest and fees, depending on when and how much you owe.
Nonpayment or failure to file may result in estimated assessments, tax liens, permit suspension, or referral for further collection action. Requests for refunds must be made separately and by the legally specified deadlines.
FAQs
Who must file Texas Form 01-117?
Sales tax permit holders who operate from a single location and use a single local tax rate are required to file Texas Form 01-117. Companies with multiple locations are required to submit separate returns.
Is a return required if no tax is due?
Yes, as long as the sales tax permit is valid, a return needs to be submitted for each reporting period. Estimated assessments and late fines are avoided by filing on time.
What is the difference between sales tax and use tax?
People pay sales tax when they make a purchase, but they owe use tax on taxable items they buy without paying sales tax. Both are reported on the same return.
How is an amended return filed?
A corrected, amended Form 01-117 must be submitted to file an amended return. Include any extra taxes, interest, or penalties that apply.
What if the business closes?
The sales tax permit needs to be officially closed with the Texas Comptroller and a final return filed. After closure, unpaid obligations are still enforceable.
Are shipping and handling charges taxable?
Shipping and handling charges are taxable when associated with taxable items, unless they qualify for an exemption under Texas law.
When should a business change forms?
A business should change its forms when it opens new locations, collects tax at multiple rates, or engages in activities that create additional sales tax nexus.
