What Texas Form 01-117 (2018) Is For
Authorized businesses report sales tax and use tax for a particular filing period using Texas Form 01-117, the Texas Sales and Use Tax Return Short Form. It applies to businesses that typically have a single location and simple reporting requirements.
This tax return allows taxpayers to report gross receipts, taxable sales, exempt sales, use tax owed, and total tax payment due. The information is submitted to the Texas Comptroller so tax collections can be appropriately allocated between the state and applicable local taxes.
Form 01-117 is designed for businesses that do not require reporting multiple locations or complex tax adjustments. Businesses with more complicated reporting requirements are generally required to use the long form instead.
When You’d Use Texas Form 01-117
Businesses use Form 01-117 when filing required Sales and Use Tax returns on a monthly, quarterly, or annual schedule assigned by the Texas Comptroller. Filing deadlines generally fall on the 20th day of the month following the end of the reporting period.
Even in cases where no taxable item was sold, taxpayers are required to file tax returns for each designated period. Returns with no sales must be filed to stay in compliance and avoid trouble.
Late filing applies when the tax return or tax payment is submitted after the filing deadline. An amended filing applies when a taxpayer discovers an error on a previously filed return and needs to correct reported amounts.
Key Rules or Details for 2018
If a business has an active Texas sales tax number and is allowed to use the short form, it must file Form 01-117. Every reporting period needs a filing, even if there are no sales or taxes due.
The state sales tax rate is 6.25%, but depending on the business's location, local taxes can increase the total rate to 8.25%. When determining the amount of tax owed on taxable sales and use tax, the correct local rate must be applied.
Economic nexus rules apply to some sellers from other states who exceed Texas's sales limits, even if they don't have a physical presence in Texas. Remote sellers may also be required to pay sales tax due to click-through nexus and affiliate nexus rules.
Step-by-Step (High Level)
Step 1: Gather records and identifying information
Gather identifiers like the EIN and RT number, sales records, and exemption paperwork. These records support the numbers listed on Form 01-117.
Step 2: Verify account details match Comptroller records
Type in the business address, reporting period, and sales tax number exactly as they are in the Texas Comptroller's records. This increases the likelihood that the return posts will be directed to the correct account.
Step 3: Report gross sales and subtract exempt sales
First, report the total gross sales. Then, enter the exempt sales with proof. To find taxable sales, take away tax-exempt sales.
Step 4: Calculate sales tax and use tax
To find out how much sales tax you owe, add the state and local rates together and then apply them to taxable sales. Add the use tax to the total for items that were bought without sales tax.
Step 5: Apply discounts and file by the deadline
Use any available discounts, then return the item and submit payment by the deadline using an approved method of payment. Keep confirmation and supporting documents for future reference.
Common Mistakes and How to Avoid Them
- Skipping zero-sales returns: Submit a return for every reporting period, even when no taxable sales occurred, to avoid automatic penalties and compliance notices.
- Using the incorrect local rate: Verify the combined state and local rate with the Texas Comptroller before filing to ensure the return does not underpay or overpay tax.
- Treating taxable sales as exempt: Confirm each exemption applies and keep valid exemption certificates and support documents for every exempt transaction.
- Omitting use tax on untaxed purchases: Review purchases for taxable items bought without Texas sales tax and report use tax so liabilities do not surface later in an audit.
- Claiming deductions without support: Retain invoices, exemption paperwork, and workpapers that explain deductions to reduce audit risk and speed up any review.
What Happens After You File
After the tax return is filed, the Texas Comptroller processes it and then puts the tax payment into the taxpayer's account. Electronic filings typically receive confirmation immediately, but paper filings may take several weeks to process.
If the Texas Comptroller identifies any errors, they may send notices requesting additional tax payments, explanations, or proof. If you break the rules, you may be fined, have your property seized, or be required to pay interest.
Routine audits may also look at filed returns. To facilitate compliance with tax laws and audits, taxpayers should retain their tax returns and supporting documents for a minimum of four years.
FAQs
Who must file Texas Form 01-117?
Any business holding a Texas sales tax number that is approved to use the short form must file Form 01-117 for each assigned reporting period.
What are the filing deadlines for Form 01-117?
Filing deadlines generally fall on the 20th day of the month following the reporting period, unless the date falls on a weekend or state holiday.
Can Form 01-117 be filed electronically?
Yes, the Texas Comptroller allows electronic submissions through Webfile and compatible digital document management tools, including systems that work through Google Chrome.
How do amended returns work for Form 01-117?
Taxpayers must submit a corrected return for the same reporting period, clearly indicating that it is an amended return. Any additional tax payment or refund request must be included.
What penalties apply to late filing?
Late filing results in a $50 penalty per return, even when no tax is due. Additional penalties and interest apply if the tax payment is submitted after the due date.
How long should records be kept?
Businesses should retain tax returns and supporting documentation for at least four years to support audits, tax clearance requests, and compliance reviews.
