Can a bookkeeping service help organize sales tax records in Texas?
Yes. A bookkeeping service can track the sales tax you collect, keep it separate from your income, and reconcile it each filing period to your sales reports and your Texas Comptroller filings. SmartGrowth Bookkeeping records sales tax as a liability in QuickBooks or Xero, because the tax you collect belongs to the state, not to your business. That keeps both your returns and your profit accurate.
The Texas state sales tax rate is 6.25%, and local jurisdictions (cities, counties, transit authorities and special purpose districts) can add up to 2%, for a combined maximum of 8.25%. The rate that applies depends on the location of the sale, so a single Dallas storefront and a business selling across Texas can have very different records.
- Sales tax collected recorded as a liability, not income
- Taxable, exempt and resale sales kept apart
- Resale and exemption certificates kept on file
- Each period's collected tax reconciled to the amount reported and paid
- Marketplace sales identified, since marketplaces often collect the tax for you
Online sellers can read more in e-commerce bookkeeping; restaurants with daily point-of-sale reports, in restaurant bookkeeping.
Does a bookkeeper handle Texas sales tax filings?
Some do and some do not, so ask before you hire. SmartGrowth Bookkeeping does: it keeps your sales tax records reconciled each period and can prepare and file your Texas sales tax reports with the Comptroller, so the deadline is handled for you. If you prefer, the figures can go to your CPA to file instead.
The Comptroller assigns each permit holder a filing frequency: monthly, quarterly or yearly. Your bookkeeping schedule should follow it, so figures are ready before each due date rather than pieced together the night before.
| Step | Who usually does it |
|---|---|
| Record taxable and exempt sales | Bookkeeper |
| Reconcile tax collected to the books | Bookkeeper |
| Prepare the figures for the return | Bookkeeper |
| Submit the return and payment | Owner, CPA or tax preparer, as agreed |
| Record the payment and clear the liability | Bookkeeper |
Because sales tax belongs to the state, it should never be counted as revenue or used to cover a slow month. Keeping it in a liability account makes that visible every time you look at your balance sheet.
Can a bookkeeper help me keep records for Texas franchise tax reporting?
Yes. Texas franchise tax reports are built from your revenue and cost figures, so accurate books are the foundation. SmartGrowth Bookkeeping keeps your revenue, cost of goods sold and compensation records clean and consistent through the year, then hands those figures to your CPA for the annual report to the Texas Comptroller, normally due May 15. Your CPA chooses the calculation method and files the report.
Most businesses with Texas nexus file the annual franchise tax report. Entities with revenue below the Comptroller's threshold owe no franchise tax, but they must still file the required information report. The threshold is adjusted over time, so check the current amount with your CPA.
- Total revenue for the reporting period, tied to your books
- Cost of goods sold, recorded consistently through the year
- Payroll and owner compensation totals
- Ownership and management details your CPA needs for the information report
Franchise tax revenue is generally based on the figures your federal return reports, which is one more reason to keep tax-ready books all year.
What is included
Sales tax liability tracking
Tax collected recorded separately from income in QuickBooks or Xero.
Filing-period schedule
Records closed on the monthly, quarterly or yearly frequency the Comptroller assigned you.
Period reconciliation
Tax collected matched to tax reported and paid, period by period.
Exemption and resale records
Certificates and exempt sales organized in case the Comptroller asks.
Franchise tax figures
Revenue, cost of goods sold and compensation totals ready for your CPA each spring.
CPA coordination
Figures and reports delivered to whoever files, with notes on anything unusual.
Texas business taxes at a glance
| Tax | Who it affects | What your books must show |
|---|---|---|
| State personal income tax | Nobody: Texas does not have one | Nothing for the state, though federal records still apply |
| Sales and use tax | Businesses selling taxable goods or services | Taxable, exempt and resale sales, and tax collected by period |
| Franchise tax | Most businesses with Texas nexus | Annual revenue, cost of goods sold and compensation figures |
Rates, thresholds and rules change. SmartGrowth keeps the records; your CPA confirms the current rules for your business.
What goes wrong without organized records
- Sales tax counted as revenue, which overstates income and profit
- Tax collected but never reconciled to what was reported, leaving gaps
- Exempt sales with no certificate on file
- Franchise tax figures pulled from books that were never closed for the year
Each of these is easier to prevent than to repair. If your records are already behind, catch-up bookkeeping brings them current first.
How a sales tax period is closed
A short, repeatable close at the end of each filing period keeps the numbers ready before anyone sits down to file.
- Reconcile the bank and card accounts that receive sales deposits.
- Match total sales in the books to your point-of-sale, invoicing or store reports.
- Split sales into taxable, exempt, resale and marketplace-collected amounts.
- Compare the sales tax liability account to the tax collected for the period.
- Prepare the figures for the return and note anything unusual for the filer.
- Record the payment once it is made, so the liability returns to zero for that period.
For a restaurant or a retail shop with daily sales, this close often turns up refunds or voided tickets that were never adjusted in the books. Catching them each period is far easier than finding them in a Comptroller review.
Who this is for
Retailers, restaurants, online stores and service businesses with taxable services across Texas, plus any owner who has opened a Comptroller notice and was not sure what it meant.
SmartGrowth works remotely with businesses across the state, including owners in Dallas-Fort Worth, using cloud software, secure document sharing and video or phone calls.
More questions
Are services taxable in Texas?
Some services are taxable in Texas and many are not, and the answer depends on the exact service. Confirm your situation with your CPA or the Texas Comptroller. Once that is decided, SmartGrowth sets up your books to track taxable and nontaxable sales separately.
What if I collected the wrong rate?
Your CPA or the Comptroller can tell you how to correct it. What a bookkeeper can do is find where the difference started by comparing your sales records, tax collected and returns filed, period by period.
Do I need a sales tax permit?
Businesses selling taxable goods or services in Texas generally need a sales and use tax permit from the Comptroller. Confirm your situation with your CPA before you start collecting tax.
Does an LLC with little or no revenue still file franchise tax?
Most Texas entities file something every year even when no tax is due, such as the required information report. Your CPA can confirm exactly which reports your LLC must file.