Direct Pay Permit Holders and “Tax-Included” Sales

Tax responsibilities can be confusing when a sale occurs between a seller and a direct pay permit holder, and the seller indicates that tax will be included as part of the sales price.

The Comptroller is considering amendments to appropriate rules to explicitly state that a seller who uses “tax-included” language in contracts and on invoices is responsible for remitting the tax to the Comptroller, without regard to who the purchaser is, consistent with longstanding law.

Additionally, if tax-included language is part of a contract when the purchaser holds a direct pay permit, the seller must remit the tax and cannot claim a refund if the direct pay permit holder also accrues and remits tax on the same transaction.

*Originally published in Tax Policy News; a monthly newsletter about Texas tax policy at