What the Form Is For
Texas Form 01-156 is actually designated as the Texas Use Tax Return, not the Sales and Use Tax Return – Short Form. The actual short form for sales and use tax filing is Form 01-117. However, for clarity in addressing use tax obligations, Form 01-156 serves a specific purpose for Texas taxpayers.
Form 01-156 allows individuals and businesses without a Texas sales tax permit to report and pay use tax on purchases where Texas sales tax was not collected at the time of purchase. Use tax applies when you buy items from out-of-state vendors or online retailers who don't collect Texas tax, but you use those items in Texas. The form ensures that the state collects the appropriate tax revenue on taxable goods and services consumed within Texas, maintaining fairness between in-state and out-of-state purchases.
For permitted sellers with a sales tax permit, the short form filing is accomplished through Form 01-117 (Texas Sales and Use Tax Return – Short Form), which is used by businesses with a single location that don't report to multiple local tax jurisdictions. This form simplifies reporting for smaller businesses that meet specific eligibility criteria.
When You’d Use Form 01-156
Standard Filing Deadlines
For non-permitted purchasers using Form 01-156, the filing frequency depends on the amount owed. Purchasers owing less than $1,000 in use tax must file and pay no later than January 20 of the following year. Purchasers owing $1,000 or more in use tax during any month must file and pay by the 20th day of the following month.
For permitted sellers using Form 01-117, filing frequency is determined by the Comptroller after permit approval.
- Monthly filers: due by the 20th of the following month
- Quarterly filers: April 20, July 20, October 20, January 20
- Yearly filers: January 20
Late Filing
Late returns trigger automatic penalties:
- $50 late filing penalty per report
- 5% penalty (1–30 days late)
- 10% penalty (over 30 days late)
- Interest begins after 61 days
Paper returns must be postmarked by the due date. Electronic filings must be submitted by 11:59 p.m. Central Time.
Amended Returns
You may file an amended return to correct errors.
- Write "Amended Return" at the top
- File via Webfile, EDI, or paper
- Multiple periods can be submitted together
Credit or Refund Adjustments
- Must file Form 01-114 (long form)
- Include Form 01-148
- Supporting documentation may be required
Key Rules or Details for 2014
Eligibility for Short Form Filing
To qualify for Form 01-117:
- Single location in Texas
- Report to one or no city
- No transit authority or special district reporting
- No out-of-state use tax
- No credits or exported sales
Otherwise, use Form 01-114.
Tax Rates
- State rate: 6.25%
- Local rates: up to 2%
- Maximum combined rate: 8.25%
Filing Methods
Based on prior-year tax payments:
- Under $10,000 → all methods allowed
- $10,000–$49,999 → no check payments
- $50,000–$499,999 → electronic filing required
- $500,000+ → EDI or TEXNET only
Timely Filing Discount
- 0.5% discount for timely filing
- Additional 1.25% for prepayment
Record Retention
- Minimum: 4 years
- Longer if fraud or non-permitting issues
Step-by-Step (High Level)
Step 1: Determine Your Form Type
Identify whether to use:
- Form 01-156 (use tax, no permit)
- Form 01-117 (short form, permitted sellers)
Step 2: Gather Your Documentation
Collect:
- Sales records
- Receipts
- Exemption certificates
- Purchase documentation
Step 3: Calculate Tax Due
- Apply correct tax rate
- Include credits or adjustments
- Verify calculations carefully
Step 4: Complete the Form
Include:
- Taxpayer number
- Filing period
- Sales and tax amounts
Step 5: Calculate Your Discount
- Multiply tax due by 0.005
- Subtract from total
- Only if filing on time
Step 6: Submit Your Return and Payment
Choose method:
- Webfile, EDI, TeleFile, or paper
- Include payment if applicable
Step 7: Retain Confirmation
- Save confirmation number
- Keep copies or postal receipts
Common Mistakes and How to Avoid Them
Using the Wrong Form
Confusing Form 01-117 and 01-156 leads to delays.
Incorrect Tax Rate Calculation
Verify both state and local rates.
Missing the Filing Deadline
Even one day late triggers penalties.
Failing to Claim the Discount
Eligible taxpayers often forget the 0.5% discount.
Incomplete or Inaccurate Information
Errors in taxpayer ID or filing period cause rejections.
Not Keeping Adequate Records
Maintain all documentation for at least four years.
Confusing Use Tax Obligations
Out-of-state purchases still require tax reporting.
What Happens After You File
Processing Your Return
- Electronic returns processed faster
- Paper returns reviewed manually
Payment Processing
- Payments applied to account
- Overpayments credited or refunded
- Underpayments trigger notices
Confirmation and Documentation
- Save confirmation number
- Verify processing through your account
Potential Audit Selection
Audits may occur based on:
- Random selection
- Data analysis
- Prior history
During an Audit
- Documentation review
- Adjustment schedules issued
- Dispute options available
Billing Notices and Collections
Possible actions include:
- Tax liens
- Asset seizure
- Permit suspension
- Payment plans (case-by-case)
FAQs
What’s the difference between sales tax and use tax?
Sales tax is collected at purchase by the seller. Use tax is paid by the buyer when tax wasn’t collected. Both apply to the same goods, ensuring tax is paid regardless of where items are purchased.
Can I file a zero-tax return?
Yes. You must file even if no tax is owed. Filing keeps your account compliant and avoids penalties.
How do I know if I should file the short or long form?
Use Form 01-117 only if you meet all eligibility criteria. Otherwise, use Form 01-114.
What should I do if I made a mistake?
File an amended return. Include documentation and continue filing regular returns.
How long do I have to keep records?
At least four years. Longer if required due to audits or fraud concerns.
What if I can’t pay the full amount?
Contact the Comptroller. Payment plans may be available, but penalties and interest still apply.
Do online purchases require use tax?
Yes. If tax wasn’t collected, you must report and pay use tax directly.
