What the Form Is For
The Texas Application for Sales and Use Tax Permit (Form AP-201) is the official application businesses use to register with the Texas Comptroller of Public Accounts for authority to collect sales and use tax. If you plan to sell tangible personal property, lease or rent goods, or provide taxable services in Texas, you must obtain this permit before conducting business. The state of Texas imposes a 6.25 percent sales and use tax on retail sales, leases, and rentals of most goods and taxable services, with local jurisdictions adding up to an additional 2 percent for a maximum combined rate of 8.25 percent.
You must obtain a sales tax permit if you are an individual, partnership, corporation, or other legal entity engaged in business in Texas and you sell tangible personal property, lease or rent tangible personal property, sell taxable services, or are a remote seller with Texas revenue exceeding $500,000 in the preceding 12 months. Being ""engaged in business"" means having a physical location in Texas (even temporary), having employees or representatives operating in the state, performing services through company personnel in Texas, or conducting business in any other manner within state borders. Remote sellers, marketplace providers, and marketplace sellers meeting the revenue threshold must also register.
There is no fee to obtain a sales tax permit, though the Comptroller may require you to post a security bond. The application can be submitted online through the Texas Online Sales Tax Registration Application System or by mailing the completed Form AP-201 to the Comptroller's office in Austin.
When You’d Use It
Late Applications
You must apply for a sales tax permit before you begin selling taxable items or services in Texas. Starting business operations without a valid permit violates Texas tax law. If you've been operating without a permit, you should apply immediately and may face penalties for late registration and unfiled tax returns.
Changes in Business Structure
You cannot amend or transfer a sales tax permit. Each permit is valid only for the specific legal entity to which it was issued and only for the business address shown on the permit. If your business undergoes any change in ownership structure—such as a sole proprietor incorporating their business, forming a partnership, or creating a limited liability company—this constitutes a new legal entity that requires a completely new permit application.
Buying or Restarting a Business
If you purchase an existing business, you cannot use the previous owner's permit. You must apply for your own new sales tax permit even if you're operating at the same location. If you held a permit for a previous business and that permit has been cancelled or is inactive, you must reapply for a new permit.
Updating Business Information
If you need to update your business information—such as changing your mailing address, phone number, or adding or closing business locations—you do not need to file a new application. Instead, use the Comptroller's online account management forms or complete the address change section on your regular sales tax return.
Key Rules or Details for 2025
Who Must Apply
Any business engaged in business in Texas that sells, leases, or rents tangible personal property or provides taxable services must obtain a permit. This includes businesses with physical presence and remote sellers with Texas revenue exceeding $500,000.
Age Requirements
Applicants must be at least 18 years old. Parents or legal guardians may apply on behalf of a minor.
Required Information
You'll need to provide:
- Legal business name
- FEIN or Social Security numbers
- Business structure
- Physical and mailing addresses
- NAICS code
- Contact details
- Owner/officer information
Social Security Number Exception
If you do not have a Social Security number, you must submit a paper Form AP-201 via email or fax.
Security Bonds
The Comptroller may require a security bond. Instructions will follow after submission.
Multiple Locations
Each active place of business requires its own permit if it receives three or more orders per year.
Federal Privacy Act Notice
Your information is used for tax administration and may be subject to public disclosure laws, with certain protections.
Step-by-Step (High Level)
Step 1: Gather Required Information
Collect:
- SSN or FEIN
- Secretary of State file number
- NAICS code
- Business addresses
- Owner/officer details
Step 2: Choose Your Application Method
Apply online (recommended) or via paper Form AP-201.
Step 3: Complete the Application
Provide:
- Legal entity name
- Identification number
- Business structure
- Start date
- Addresses
- Ownership details
- NAICS code
Step 4: Submit the Application
Submit online or send Form AP-201 via mail, email, or fax.
Step 5: Print Confirmation
Save your submission confirmation for records.
Step 6: Await Approval and Permit
Processing takes 2–3 weeks. You'll receive your permit and filing schedule.
Common Mistakes and How to Avoid Them
Using a DBA Instead of Legal Name
Always use your registered legal name.
Failing to Apply Before Starting Business
Apply at least 3–4 weeks before operations begin.
Attempting to Transfer Permits
Permits are non-transferable between entities or owners.
Incomplete Owner Information
Include full details for all owners and officers.
Wrong NAICS Code
Verify your code at census.gov/naics/.
Not Planning for Multiple Locations
Each qualifying location needs its own permit.
Missing Federal ID
Obtain your FEIN before applying if required.
Not Understanding Public Information Disclosure
Expect marketing calls after registration due to public records.
What Happens After You File
Processing Timeline
Takes approximately 2–3 weeks.
Notification Letter
Includes permit, taxpayer ID, and filing frequency.
Posting Your Permit
Must be displayed at your business location.
Filing Requirements Begin
You must file returns even with zero sales.
Determining Your Filing Schedule
- Monthly: Due by the 20th of the following month
- Quarterly: April 20, July 20, October 20, January 20
- Annual: January 20
Security Bond Determination
You’ll receive instructions if required.
Ongoing Obligations
- Collect and remit tax
- File returns on time
- Maintain records for 4 years
- Report changes
Public Information Disclosure
Business info becomes publicly accessible after issuance.
FAQs
If my business doesn't have a federal identification number yet, can I still apply?
Yes, but partnerships, corporations, and LLCs will eventually need an FEIN. Sole proprietors may use their Social Security number.
Can I keep my sales tax permit if I'm no longer in business?
No. You must close your permit if operations stop. If still active, you must continue filing returns.
What if I'm buying an existing business that already has a permit?
You must apply for your own permit. Permits cannot be transferred.
Do marketplace sellers need their own permit?
It depends. If all sales go through a marketplace that collects tax, you may not need one. Otherwise, you likely do.
How soon after applying can I start business?
You can begin after applying, but waiting for your permit is strongly recommended.
What happens if I need to change my business address or add a new location?
Use the Comptroller’s system to update details. No new application required.
Are my business records subject to audit?
Yes. Maintain records for at least four years.
Sources:
- Texas Comptroller Sales and Use Tax Information
- Texas Online Tax Registration Application
- Texas Sales and Use Tax FAQs
- Sales Tax Permit Requirements
- Publication 94-108, Engaged in Business
