What the Form Is For
Form 01-117 is the simplified version of the Texas Sales and Use Tax Return used by businesses with a single location to report and pay state and local sales and use taxes to the Texas Comptroller of Public Accounts. This official tax document serves two primary purposes: reporting sales tax collected from customers on taxable goods and services, and reporting use tax owed on taxable items purchased for business or personal use where Texas sales tax was not paid at the time of purchase.
The short form is specifically designed for businesses operating from one physical location in Texas that do not need to allocate local sales taxes to multiple jurisdictions. If your business has multiple outlets or reports taxes to various cities, counties, transit authorities, or special purpose districts beyond your single business location, you must use the long form (Form 01-114) instead. Texas imposes a base state sales and use tax rate of 6.25 percent, with local jurisdictions authorized to add up to 2 percent, creating a maximum combined rate of 8.25 percent.
All Texas sales tax permit holders must file returns regularly—even during periods with zero sales or tax due—according to their assigned filing frequency. The Comptroller notifies businesses of their filing schedule (monthly, quarterly, or yearly) after approving their sales tax permit application. Filing this return satisfies your legal obligation as a permit holder to report taxable activity and remit collected taxes to the state.
When You’d Use It
Filing Deadlines
You must file Form 01-117 by the statutory due date for your reporting period. For monthly filers, returns are due on the 20th day of the month following the reporting month—for example, your April sales tax report is due May 20. Quarterly filers must submit returns by April 20 (for January through March), July 20 (for April through June), October 20 (for July through September), and January 20 (for October through December). Yearly filers report the previous year's sales by January 20. When a due date falls on a Saturday, Sunday, or legal holiday, the next working day becomes the due date.
Late Filing Penalties
Late filing triggers automatic penalties. The Texas Comptroller assesses a $50 penalty on each report filed after the due date, regardless of whether you owe taxes. If you pay taxes 1-30 days late, you incur an additional 5 percent penalty on the tax amount due. Paying over 30 days late increases this penalty to 10 percent. Interest begins accruing on unpaid taxes starting 61 days after the due date, calculated at a variable annual rate (prime rate plus 1 percent) that adjusts each calendar year.
Amended Returns
Amended returns become necessary when you discover errors on a previously filed return. To file an amendment, obtain a copy of your original return and either make corrections directly on that copy or complete a new return with accurate information. Write "Amended Return" prominently at the top of the form, sign and date it, then mail it to the Comptroller at 111 E. 17th Street, Austin, Texas 78774-0100.
If you underpaid taxes, include the additional tax due plus applicable penalties and interest calculated from the original due date. If you overpaid, the amended return initiates the refund process through the Comptroller's Sales Tax Refunds procedures. The Comptroller cannot issue refunds until you properly document the overpayment through an amended return.
Key Rules or Details for 2024
Filing Requirement
Your filing obligation continues regardless of business activity—you must file even during periods with zero taxable sales and zero tax due. For these no-activity periods, you can satisfy the requirement by filing electronically through Webfile, using the TeleFile phone system, or submitting a paper short form marked appropriately.
Timely Filing Discount
When you file your return and pay all taxes by the due date, you may claim a 0.5 percent discount on the tax amount reported. This discount applies to both state and local taxes and is calculated on the gross tax before taking the discount.
Monthly and quarterly filers can access an additional prepayment discount of 1.25 percent by submitting a reasonable estimate of taxes by the 15th day of the reporting period, then filing the final return and paying any balance by the regular due date.
Electronic Filing Requirements
Businesses that paid $50,000 or more in sales and use taxes during the preceding state fiscal year must file electronically. Those paying $500,000 or more must also remit payments electronically via TEXNET or Electronic Data Interchange.
Record Retention
Records retention is mandatory for at least four years. You must maintain documentation supporting all amounts reported on your returns, including:
- Sales receipts
- Purchase invoices
- Exemption certificates
- Resale certificates
Step-by-Step (High Level)
Enter Basic Information
Begin by entering your 11-digit Texas taxpayer number exactly as it appears on your sales tax permit. Fill in the reporting period you're covering.
Itemized Entries
Item 1 – Total Texas Sales
Report the total dollar amount of all sales (including exempt sales). Do not include taxes collected.
Item 2 – Taxable Sales
Enter the dollar amount of sales subject to Texas sales tax. Exclude exempt or resale transactions.
Item 3 – Taxable Purchases
Report taxable items purchased where Texas sales tax was not paid. If none, enter zero.
Item 4 – Combined Taxable Amount
Add Items 2 and 3 together, then multiply by your total tax rate.
Item 5 – Deduct Timely Filing Discount
If applicable, calculate 0.5 percent of your gross tax.
Item 6 – Tax Due
Subtract the discount from your gross tax. Add penalties if filing late.
Final Steps
Complete the signature block, include your phone number, and submit the form with payment if applicable.
Common Mistakes and How to Avoid Them
Missing Taxable Purchases
Businesses often fail to report taxable purchases in Item 3. Always review purchase invoices for untaxed items.
Incorrect Tax Rate
Using outdated or incorrect tax rates leads to errors. Always verify your rate using the Comptroller’s tool.
Improper Zero Filing
Submitting blank forms instead of marking “no sales” causes issues. Always clearly indicate zero activity.
Incorrect Discount Claims
The 0.5 percent discount only applies to on-time filings. Do not claim it on late returns.
Not Updating Business Information
Failure to update your address can lead to missed notices. Always notify the Comptroller of changes.
What Happens After You File
Processing and Confirmation
Electronic filers receive immediate confirmation. Paper filings take two to four weeks to process.
Compliance Monitoring
The Comptroller tracks filing behavior. Consistent compliance builds a positive record.
Collection Actions
If taxes remain unpaid, the Comptroller may issue billing notices and pursue collection actions such as:
- Tax liens
- Asset seizure
- Permit suspension
Audits
Audits typically occur in four-year intervals and verify:
- Proper tax collection
- Accurate reporting
- Complete payment
Refunds
Overpayments require amended returns. Refunds may be adjusted based on outstanding liabilities.
FAQs
Can I file Form 01-117 even if I had sales but no taxes are due?
Yes. If your total sales exceed zero but you have zero taxable sales and zero tax due, you should still file the short form and report zero in the taxable sections. Never assume that having no tax liability exempts you from filing.
What if my business operates in multiple cities but from a single physical location?
If you allocate taxes to multiple jurisdictions, you must use the long form (Form 01-114). The short form only applies to a single reporting location.
How do I know what tax rate to use for my business?
Use the Comptroller’s Sales Tax Rate Locator tool to determine your exact combined rate based on your address.
Is there any way to avoid penalties if I cannot pay on time?
There are no automatic extensions, but you may contact the Comptroller to request a payment plan. Penalties and interest will still apply.
Do I need to register for a new permit if my business changes ownership?
Yes. Permits are non-transferable. Any ownership change requires a new permit.
Can I get help if I am confused about what is taxable?
Yes. The Comptroller provides publications, a hotline, and local office assistance for guidance.
What should I do if I receive an estimated billing from the Comptroller?
File your actual return immediately to replace the estimate. Ignoring it may result in a final assessment.
This summary is based on information from the Texas Comptroller of Public Accounts official publications and resources current as of 2023. Tax laws and procedures may change. For the most current information, forms, and filing assistance, visit comptroller.texas.gov or call 800-252-5555.
