What Texas Form 01-117 Is For
Texas Form 01-117 is the streamlined version of the state's sales and use tax return, designed for businesses with straightforward tax situations. If you're a Texas business owner collecting sales tax, understanding this form will help you meet your reporting obligations efficiently while avoiding costly penalties.
The form serves three primary purposes: reporting your total taxable sales, calculating the state and local sales tax you collected, and remitting that tax to the Texas Comptroller of Public Accounts. Texas imposes a 6.25 percent state sales tax, and local jurisdictions can add up to 2 percent, bringing the maximum combined rate to 8.25 percent. Your business acts as a collection agent for the state, gathering these taxes from customers and forwarding them through Form 01-117.
Eligibility Requirements
Not every business qualifies for the short form. You can use Form 01-117 only if your business has a single location in Texas, you report applicable local taxes at only one rate, and you have no local use tax to report. Businesses with multiple outlets, varying local tax rates, or more complex situations must use the long form (Form 01-114) instead.
The Comptroller's office will notify you after approving your sales tax permit whether you'll file monthly, quarterly, or yearly based on your anticipated tax volume.
When You’d Use Texas Form 01-117
Standard Filing Deadlines
The standard filing deadlines depend on your assigned reporting frequency. Monthly filers must submit Form 01-117 by the 20th day of the month following the reporting period—for example, April sales are due May 20.
Quarterly filers report on:
- January 20 (October–December)
- April 20 (January–March)
- July 20 (April–June)
- October 20 (July–September)
Yearly filers report by January 20 for the previous calendar year.
When the 20th falls on a weekend or legal holiday, the next business day becomes the deadline.
Late Returns
If you miss the deadline, you'll need to file a late return. Filing late triggers automatic penalties:
- $50 late filing penalty applies to every late report
- 5 percent penalty if paid 1–30 days late
- 10 percent penalty if paid more than 30 days late
Interest begins accruing 61 days after the due date.
Amended Returns
Amended returns become necessary when you discover errors on a previously filed return.
To file an amended Form 01-117:
- Correct a copy of your original return or complete a new one
- Write "Amended Return" at the top
- Sign and date the form
- Mail to: 111 E. 17th Street, Austin, Texas 78774-0100
If you underpaid, include additional tax plus penalties and interest. If you overpaid, request a refund after refunding customers if needed.
Key Rules or Details for 2019
Ongoing Responsibilities
Holding a sales tax permit creates ongoing obligations:
- Post your permit at your business location
- Collect sales tax on taxable sales
- Pay use tax on taxable purchases
- File and pay on time
- Maintain proper records
Record Retention Requirements
Texas law requires keeping all records for at least four years unless approved otherwise.
Your records must include:
- Gross receipts from all sales and services
- Purchase documentation
- Resale and exemption certificates
If under audit, retain records until the process concludes.
Electronic Filing Requirements
Filing electronically becomes mandatory based on tax volume:
- $50,000+ annually → must file electronically
- $500,000+ annually → must pay electronically
Options include Webfile, EDI, and TEXNET.
Filing Discounts
Timely filing offers financial benefits:
- 0.5 percent discount for filing and paying on time
- Additional 1.25 percent prepayment discount (for qualifying filers)
Step-by-Step (High Level)
Step 1: Collect Your Records
Compile:
- Total gross receipts
- Taxable sales
- Exempt sales documentation
- Use tax records
Step 2: Identify Your Business and Reporting Period
Provide:
- Taxpayer number
- Outlet number
- Business details
- Reporting period
Update contact info if needed.
Step 3: Calculate Taxable Sales and Tax Due
- Report taxable sales
- Apply correct tax rate
- Subtract applicable discounts
Step 4: Report Taxable Purchases (Use Tax)
Include use tax for:
- Out-of-state purchases
- Untaxed business items
Step 5: Calculate Total Payment
- Add sales + use tax
- Subtract discounts
- Verify calculations
If no activity, still file using “No Sales” or Telefile.
Step 6: Sign, Date, and Submit
- Sign under penalty of perjury
- Submit via mail or electronically
- Keep a copy for records
Common Mistakes and How to Avoid Them
Mistake 1: Failing to File When There Are No Sales
You must file even with zero sales. Use “No Sales” or Telefile.
Mistake 2: Applying the Wrong Tax Rate
Always verify current rates using the Sales Tax Rate Locator.
Mistake 3: Overlooking Use Tax
Report tax on untaxed purchases, including online and out-of-state buys.
Mistake 4: Losing Exemption Documentation
Maintain exemption certificates for at least four years.
Mistake 5: Missing the Timely Filing Discount
Claim the 0.5 percent discount when eligible.
What Happens After You File
Processing and Confirmation
- Electronic filing → immediate confirmation
- Paper filing → several weeks
Review and Corrections
The Comptroller may request clarification if errors are found.
Audit Risk and Compliance
Businesses are typically audited every four years. Good records simplify audits.
Enforcement Actions
Failure to comply may result in:
- Tax liens
- Asset seizure
- Permit suspension
- Criminal charges
Contact the Comptroller if you cannot pay.
FAQs
Can I file Form 01-117 if I operate at farmers' markets or craft shows in different locations?
It depends on your structure. Occasional temporary sales usually qualify, but multiple permanent locations require the long form.
What should I do if I realize I made an error on last year's return?
File an amended return immediately. Include corrected data and any additional tax or request a refund if overpaid.
Do I need to charge tax on shipping and delivery charges?
Generally yes, if tied to a taxable sale. Exceptions apply for nontaxable items.
If my business is seasonal and closed for several months, do I still need to file returns?
Yes. File for every reporting period unless you officially close your permit.
Can I change from monthly to quarterly filing or vice versa?
Only the Comptroller can approve changes based on your tax activity.
What payment methods does the Comptroller accept, and are there any fees?
Options include check, EFT, credit card, and TEXNET depending on tax volume. Credit cards may include processing fees.
Is there any way to avoid penalties if I filed late due to circumstances beyond my control?
Penalty waivers may apply for disasters or emergencies. Interest cannot be waived.
For More Information
All forms, instructions, and guidance are available at:
https://comptroller.texas.gov/taxes/sales/
You can also contact the Comptroller's office at 800-252-5555 (Monday through Friday, 8 a.m. to 5 p.m. Central Time).
