Texas Taxing Information
The Texas Comptroller's office was originally created by the Texas provisional government in 1835. The Comptroller is the chief steward of the state's finances, acting as tax collector, chief accountant, chief revenue estimator and chief treasurer for all of state government.
The below Information is unique to Texas
Accounts Receivable Levies
Businesses that owe taxes may have levies sent to their receivables. When an account receivable gets a levy notice, they are then legally obligated to pay the state rather than the business to whom they owe the money. This can have devastating effects on cash flow, business relationships, and reputation. As always, it is easier to avoid than reverse a receivables levies, though they can be reversed.
The state of Texas can take money out of your bank account, up to the total of the amount due. Typically they hold the money for several days so that you can get professional help and to also determine if the State has acted in error. It is easier to avoid than reverse a bank levy, though a bank levy can be reversed.
If you have past due balances, the Comptroller's office will send you a billing notice requesting that you pay the remaining balance. This balance is due upon receipt of the notice. You will receive a separate billing notice for each report period that is delinquent.
If you fail to file a required sales tax report, the Comptroller's office will send you an estimated billing, with instructions to file a report providing your actual sales data for the estimated period. Failure to file or pay a tax report may result in collection actions, including, but not limited to, additional late filing penalties, liens, and criminal charges.
The state may garnish wages or benefits checks. If you receive a notice of intent to garnish, act immediately. It is easier to avoid than reverse a bank levy, though garnishments can be reversed.
OSI Collection Services, Inc.
OSI Collection Service is a private collection service engaged by the Comptroller's Office to collect past due tax accounts. If you get a billing notice from OSI Collection Service, verify their credentials prior to talking to them or divulging any personal information.
Penalties and Interest for Past Due Taxes in Texas
Statutory penalty on past due taxes are calculated as follows:
- If you are paying the tax 1-30 days late, the state charges a 5% penalty.
- If you are paying the tax 31-60 days late, the state charges a 10% penalty.
- If you are paying the tax after the date referenced on the Notice of Tax/FEE Due, the state charges an additional 10% penalty (for a total of 20%).
- Statutory interest begins accruing on the 61st day after the due date of a required report. The interest rate is a variable rate determined at the beginning of each calendar year.
Power of Attorney
You may have a qualified professional represent you. This requires that you have a Power of Attorney form completed and signed before any tax matter can be discussed with your representative. The state of texas accepts the IRS form 2848, Power of Attorney for this purpose.
Refusal to File Taxes
Typically, the Comptroller's Office will take the following collection actions to protect the state's interests and collect past due taxes:
- Require the taxpayer to post a security bond (up to $100,000 for a delinquent sales tax account)
- File a tax lien in applicable counties
- Freeze and/or seize non-exempt assets
- Suspend permits
- File criminal charges.
- Place a "hold" on any outstanding state warrants payable to the taxpayer
Tax Liens and Tax Warrants
If 35 days pass and the bill has gone un-answered or unpaid, the Collection Division may place liens or warrants on personal property. A tax lien or tax warrant is a public record and can compromise ones credit score, as well as limit one's ability to sell or transfer property.