Texas invoice generator

Texas invoice FAQ

How does Texas sales tax work on invoices?

Texas state sales tax is 6.25%, plus local tax up to 2% (city, county, transit, special purpose districts) for a maximum combined rate of 8.25%. Most major metros (Dallas, Houston, Austin, San Antonio) hit the 8.25% cap. Local tax is generally origin-based: if you take the order at your Texas place of business, charge the local rate for that location, even when you deliver elsewhere. Texas Comptroller-registered sellers must show sales tax on taxable invoices: typically as a separate line, with the combined rate stated.

What's taxable in Texas vs not?

Texas taxes a broader set of services than most states: including "data processing services" (which has been interpreted broadly to include many digital services), telecommunications, amusement, debt collection, motor vehicle parking, real property repair (with carve-outs), credit reporting, security services, and several others. Most professional services (legal, medical, accounting) are exempt. Tangible personal property is generally taxable. Check Texas Comptroller Pub 96-259 for the service taxability list.

How does Texas tax software and SaaS?

Software (canned/off-the-shelf) is taxable as tangible personal property. SaaS has historically been treated as a taxable "data processing service" but with a 20% exemption (you tax 80% of the SaaS price). Custom software development is generally exempt. The rules have evolved; check current guidance. On an invoice that is only SaaS, enter 80% of your combined rate as the tax rate.

What's a Texas resale or exemption certificate?

Texas Form 01-339 (resale certificate) and Form 01-339(BACK) (exemption certificate) are the official documents buyers provide to claim sales-tax-exempt purchases. As the seller, you keep the certificate for 4 years and don't charge sales tax on the exempt sale. Reference on the invoice: "Exempt, resale per Form 01-339 # [number] on file." Texas audits resale exemptions aggressively; keep certificates organized.

How do I handle Texas franchise tax on invoices?

Franchise tax is a state-level entity-level tax; it's not on invoices. Most Texas businesses owe franchise tax annually if revenue exceeds the no-tax-due threshold (~$2.47M as of 2026, adjusted for inflation). LLCs, corporations, and partnerships are typically subject; sole proprietorships are generally exempt. The franchise tax obligation doesn't change what's on the invoice; it's a separate filing through the Comptroller.

Are construction services taxable in Texas?

Texas has complex construction tax rules. New construction labor is exempt; remodeling/repair labor on residential property is exempt; remodeling on nonresidential is taxable. Materials are generally taxable to whoever first acquires them. The contractor structure ("separated" vs "lump-sum") changes how tax flows. Texas contractors should consult the Comptroller's Construction Industry FAQ and likely a Texas tax accountant; the rules are specific.

How do I invoice across Texas metros (Houston, Dallas, Austin, San Antonio)?

Same invoice template. Most major metros are at the 8.25% combined cap (6.25% state + 2% local max). Smaller cities and unincorporated areas may have different rates. A seller with a Texas place of business generally charges the local tax where the order is received, so a Houston store collects Houston's local tax on a delivery to Dallas. If that location doesn't reach the 2% local cap, add local use tax for the delivery address up to the cap. Remote sellers with no Texas place of business use the ship-to address or can elect the single local use tax rate (1.75%). For high-volume sellers, integrate with Stripe Tax or Avalara to auto-apply the right rate.

What records does Texas require?

Texas Comptroller requires sellers to keep records of all sales (taxable and exempt), invoices issued, exemption certificates, and tax remittances for 4 years. Digital storage acceptable; PDFs work. Texas conducts both desk audits (questionnaires + sample documents) and field audits; clean, organized records are the difference between a quick close and an extended audit. Issueable produces archive-friendly PDFs.