Texas – Direct Pay Permit Holders and Tax-Included Sales

SALT Report 2459 – The Texas Comptroller issued guidance regarding the tax responsibilities for sales that occur between a seller and a direct pay permit holder, and the seller indicates that tax is included in the sales price. The Comptroller is currently considering amendments to certain rules to provide that if a seller uses “tax-included” language in a contract or on an invoice they would be held responsible for remitting the tax to the Comptroller, regardless of who the purchaser is.

Furthermore, the Comptroller warns that tax-included language should not be in a contract if the purchaser holds a direct pay permit; however, if it is, the seller must remit the tax and cannot claim a refund if the direct pay permit holder also accrues and remits tax on the same transaction.

For Further Information

Texas Comptroller of Public Accounts – Tax Policy News April 2013