What the Form Is For
Texas Form 01-117, known as the Texas Sales and Use Tax Return – Short Form, is the simplified version businesses use to report and pay their state and local sales and use taxes to the Texas Comptroller of Public Accounts. This form serves a specific purpose for businesses with simpler tax reporting needs—specifically those with one active location that don't collect local sales taxes for multiple jurisdictions outside their business location. These are called "short form filers."
If your business holds a Texas sales and use tax permit, you use this form to report the total sales you made during the filing period, calculate how much of those sales were taxable, figure out the tax owed on both sales and any taxable purchases, and submit payment. The form also accommodates situations where businesses have zero taxable sales but still need to file a return to maintain compliance. Texas imposes a 6.25 percent state sales tax, and local jurisdictions can add up to 2 percent more, making the combined rate as high as 8.25 percent in some areas.
Use tax, which appears on this same form, is the complement to sales tax. You owe use tax when you buy taxable items from out-of-state sellers or sellers who don't charge Texas sales tax, and you store, use, or consume those items in Texas. If you're a permitted purchaser, you report this use tax in Item 3 (Taxable Purchases) on Form 01-117.
When You’d Use This Form
Late Returns
Even though filing deadlines are strict in Texas, situations arise where you need to file late. If you miss your due date—whether monthly, quarterly, or yearly—you still file Form 01-117 as your late return, but be prepared for penalties.
- $50 late filing penalty applies to every late report
- 5 percent penalty if paid within 1–30 days late
- 10 percent penalty if paid more than 30 days late
- Interest begins accruing after 61 days
Amended Returns
For amended returns, the process involves correcting errors on a previously filed return.
- Complete a new form or correct a copy
- 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, file Form 00-957 for a refund within four years.
TeleFile Option
The TeleFile system allows certain zero-tax filings, though it has limitations on how far back you can file.
Key Rules or Details for 2016
Filing Frequency
Your filing schedule depends on prior tax payments:
- Monthly: due by the 20th of the following month
- Quarterly: April 20, July 20, October 20, January 20
- Yearly: due January 20
Electronic Filing Requirements
- $50,000+ tax paid → electronic filing required
- $500,000+ → electronic payment required (EDI or TEXNET)
Discounts and Prepayments
- 0.5 percent discount for timely filing
- Additional 1.25 percent prepayment discount possible
No Extensions
No extensions are allowed unless a disaster is declared.
Step-by-Step (High Level)
Gather Records
Start by collecting all sales and purchase records for the reporting period.
Complete Header Information
Enter:
- Texas taxpayer number
- Business name and address
- Reporting period
Report Sales
- Item 1: Total sales
- Item 2: Taxable sales (after exemptions and credits)
Report Taxable Purchases
- Item 3: Enter taxable purchases (use tax)
- Enter zero if none
Calculate Tax
- Items 4–7: Total tax, discounts, and final amount due
- Item 9: Late penalties if applicable
Submit the Return
Sign and submit:
- By mail with payment
- Or electronically via Webfile or EDI
Common Mistakes and How to Avoid Them
Misclassifying Taxable Sales
Keep proper exemption documentation and verify eligibility before marking sales as non-taxable.
Forgetting Use Tax
Review accounts payable for purchases without Texas sales tax, including online and out-of-state transactions.
Using Incorrect Local Tax Rates
Use the Comptroller’s Sales Tax Rate Locator to confirm accurate rates.
Missing the Filing Discount
Submit both return and payment on time to qualify for the 0.5 percent discount.
Poor Recordkeeping
Maintain records for at least four years, including:
- Sales and purchase invoices
- Exemption certificates
- Financial records
Filing Without Paying
Filing without payment triggers penalties and interest. Pay what you can and contact the Comptroller if needed.
What Happens After You File
Processing Time
- Electronic filings: a few business days
- Paper filings: two to three weeks
Notices and Corrections
The Comptroller may send notices for:
- Errors
- Missing data
- Inconsistencies
Respond quickly to avoid penalties.
Audit Risk
Returns may be selected for audit based on risk factors. Maintain organized records to prepare.
Refund Claims
Overpayments require filing Form 00-957. Refunds may include interest after 61 days.
Filing Frequency Changes
Your filing schedule may change based on your tax activity.
FAQs
If my business had no sales during the reporting period, do I still need to file?
Yes. You must file even with zero sales to stay compliant and avoid penalties.
Can I change my filing frequency if my sales decrease?
You can request a change, but the Comptroller decides based on your payment history.
What’s the difference between a credit and a refund?
Credits reduce current tax due on the form. Refunds require a separate claim to recover overpaid taxes.
What happens if I take the discount but pay late?
The discount is removed, and penalties plus interest are applied.
Do I report use tax on older assets brought into Texas?
Yes, use tax applies when the item is first used in Texas, subject to the four-year statute of limitations.
How do I handle sales in different cities?
Use the tax rate based on where the customer receives the goods (destination-based sourcing).
What should I do if I receive an estimated billing?
Contact the Comptroller immediately with proof of filing to resolve the issue.
Sources: All information in this summary comes from official publications of the Texas Comptroller of Public Accounts, including Form 01-117, filing guidelines, and sales tax rules.
