Texas sales tax debt: Comptroller penalties, waivers and payment options

The Texas Comptroller of Public Accounts collects the 6.25% state sales and use tax along with local taxes levied by cities, counties, transit authorities and special districts — combined local tax can add up to 2%, for a maximum combined rate of 8.25%. Sellers report all of it on one return, so a missed Texas return usually means both state and local tax are past due.

Per the Comptroller's published rules:

• 5% penalty on tax paid 1–30 days late.
• Another 5% (10% total) on tax paid more than 30 days late.
• An additional 10% penalty can apply when a deficiency is assessed after an audit or the balance goes to collection.
• A $50 late filing fee may be assessed on each return filed after the due date.
• Interest begins on tax that is more than 60 days late.

Timely filers can keep a small discount for prepaying or filing on time; late filers lose it.

If you don't file, the Comptroller sends an estimated billing and asks you to file a report with your actual sales. Failure to file or pay can lead to additional penalties, liens and even criminal charges. Filing real returns for every missing period almost always lowers an estimated balance and is the first step before any payment arrangement.

The Comptroller accepts waiver requests for penalties and interest on late reports and payments, generally considering your compliance history and the reason for the delay. A business with a clean record and a one-time problem has the best chance. Requests are made through the Comptroller's waiver process; include what happened and when you fixed it.

If you can't pay in full, contact the Comptroller's collections staff about a payment arrangement. Keep current returns filed and paid while you do — a new delinquency undermines the request.

Texas Tax Code section 111.0611 allows the Comptroller to hold a responsible individual personally liable for trust-fund taxes — including collected sales tax — when the business fails to pay and the person willfully failed to remit. This mirrors the federal Trust Fund Recovery Penalty.

To dispute an audit deficiency, request a redetermination by the deadline on the notice; contested cases are heard by the State Office of Administrative Hearings. Use the free business tax relief assessment to see which routes may fit.