What Are Taxable Purchases?

This video is part of the Texas Sales & Use Tax return series. We explain what are taxable purchases and how to report them on your sales & use tax return. Most people focus on sales, but purchases are also important. Every business has taxable purchases. If you never report taxable purchases on your return, it is a red flag to the taxing authority.

Taxable purchases are also an area that auditors consistently review to verify that all the appropriate sales and use tax has been paid. So keep your source documents (i.e., purchase invoices, etc.) and verify that the vendor charged the appropriate tax. If they didn't, you must accrue use tax and remit the tax to the appropriate taxing authority.

Take a look at the video and let us know if you have any questions.

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