What Is a Texas Taxpayer Number & Do You Need One?

A Texas Taxpayer Number is an 11-digit unique identification number issued by the Texas Comptroller of Public Accounts. It identifies businesses and other entities for various state tax purposes and compliance with Texas tax laws.

Who Needs a Texas Taxpayer Number?

Many businesses and entities operating in Texas require a Texas Taxpayer Number to comply with state tax laws. This includes businesses that sell taxable goods or services within the state, such as retail sales or specific services subject to sales tax. Even remote sellers, those not physically located in Texas but conducting sales into the state, must obtain this number if their sales exceed the economic nexus threshold of $500,000 in the preceding 12 calendar months.

Entities subject to Texas franchise tax also need a Texas Taxpayer Number. This generally applies to most corporations and limited liability companies (LLCs) formed in Texas or doing business in the state. Partnerships, trusts, professional associations, and other legal entities may also be liable for franchise tax.

Employers paying wages in Texas are required to register with the Texas Workforce Commission (TWC) for unemployment insurance tax purposes, which involves obtaining a TWC tax account number. This registration is typically required within 10 days of becoming a liable employer. The TWC tax account number functions similarly to a state-specific taxpayer identification for unemployment tax obligations.

Other specific activities may also necessitate a Texas Taxpayer Number, as determined by the Texas Comptroller. This includes certain excise taxes or other state-specific fees.

Applying for a Texas Taxpayer Number

Before starting the application process, gather all necessary information. You will need your Federal Employer Identification Number (EIN) or, for sole proprietors without employees, your Social Security Number (SSN). The legal name of your business, along with any assumed names (Doing Business As or DBA), and both your business and mailing addresses are also required.

You must identify your business entity type, such as sole proprietorship, partnership, corporation, or LLC. The date your business activities began or will begin in Texas is another important detail. You will also need to provide your primary business activity, which can often be identified by a North American Industry Classification System (NAICS) code, or a detailed description of your operations.

The application will ask for contact information for the responsible party, ensuring the Comptroller’s office can communicate regarding your account.

The primary method for submitting your application is online through the Texas Comptroller’s Webfile system. This secure online portal allows for efficient data entry and submission.

Upon successful submission, you may receive immediate confirmation of your application. The processing time for receiving your Texas Taxpayer Number can vary, but generally, you can expect to receive it within a few business days to a couple of weeks. The number is typically delivered through official correspondence from the Comptroller’s office, often in a welcome letter or on tax forms.

Common Uses of Your Texas Taxpayer Number

Your Texas Taxpayer Number is used for various state tax obligations and compliance activities. It is essential for filing and paying Texas sales and use tax, which is imposed on retail sales and certain services at a state rate of 6.25% plus local rates up to 2%. This number identifies your business when you remit collected sales tax to the Comptroller.

The number is also utilized for filing and paying Texas franchise tax. This annual tax applies to most entities formed or doing business in Texas, with reports typically due by May 15th. Although many small businesses with revenue below a certain threshold (e.g., $2.47 million for reports due in 2024) may not owe tax, they often still need to file an information report using this number.

Your Texas Taxpayer Number is linked to reporting and paying Texas unemployment insurance tax through the Texas Workforce Commission. Employers use this identification to file quarterly wage reports and make unemployment tax payments. The number also serves as a general business identifier for various state licenses, permits, and other regulatory requirements where business identification is needed.