Texas: What Is the Single Local Tax Rate (SLTR)?

In Texas, the Single Local Tax Rate is officially referred to as the Single Local Use Tax Rate. It is an optional local tax rate that certain remote sellers may elect to use instead of calculating the exact local tax rate for each Texas delivery address. The current single local use tax rate is 1.75%, and the Texas Comptroller publishes the rate each year.

This rate applies only to the local tax portion. Texas also has a 6.25% state sales and use tax rate, and local jurisdictions may impose additional local tax up to 2%, for a maximum combined rate of 8.25%.

For remote sellers that elect SLTR, the combined Texas rate is generally:

6.25% state tax + 1.75% single local use tax = 8.00% total

Who can use the Single Local Use Tax Rate?

The SLTR option is available only to qualifying remote sellers. A remote seller is an out-of-state seller whose only activity in Texas is remote solicitation of sales.

A seller may be eligible to use SLTR if:

1. The business is located outside Texas.

2. The business does not have a physical place of business or other in-state activity in Texas beyond remote sales.

3. The business is required to collect Texas sales and use tax.

4. The business has elected to use the single local use tax rate with the Texas Comptroller.

Who cannot use SLTR?

The Single Local Use Tax Rate is not available to:

1. Businesses located in Texas
   Texas-based businesses are not considered remote sellers and cannot use the single local use tax rate for their sales.

2. Marketplace providers
   Marketplace providers collecting tax on behalf of marketplace sellers cannot use the single local use tax rate.

3. Sellers that have not elected SLTR
   Remote sellers must notify the Texas Comptroller before using the single local use tax rate. Existing remote sellers typically do this by submitting Form 01-799, Remote Seller’s Intent to Elect or Revoke Use of Single Local Use Tax Rate.

How to determine if SLTR applies to your Texas registration

To determine whether the Single Local Use Tax Rate applies, confirm the following:

1. Confirm whether the business is a remote seller

If the business is based outside Texas and only sells into Texas remotely, it may qualify as a remote seller. If the business has a Texas location, Texas office, Texas store, or other in-state presence, it generally cannot use SLTR.

2. Confirm whether the business is required to collect Texas tax

Texas provides a remote seller safe harbor. A remote seller is generally not required to obtain a Texas tax permit or collect use tax if its total Texas revenue is less than $500,000 in the previous 12 calendar months.

If the business exceeds this threshold, it may have a Texas collection obligation and may be able to elect SLTR if it otherwise qualifies.

3. Confirm whether the business elected SLTR

SLTR does not automatically apply just because the business is a remote seller. The seller must elect to use it. New remote sellers may choose the SLTR option on the Texas Sales and Use Tax application, while existing remote sellers must notify the Comptroller using Form 01-799.

4. Check whether the seller is listed in the Comptroller’s SLTR records

The Texas Comptroller maintains a Single Local Use Tax Rate Taxpayer Search for remote sellers that have elected to use the rate. The Comptroller notes that this data is updated weekly.

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