Could a Texas retailer round a sales-tax rate when its cash register could not program the full rate?

Plain-English summary

The Texas Comptroller said the law did not permit rounding a sales-tax rate and would not authorize rounding the rate up simply because some electronic cash-register models could not accept a tax table or three digits after the decimal.

If a retailer nevertheless rounded up, all additional sales tax collected had to be remitted. If it rounded down, the retailer remained responsible for any difference between the tax collected and the tax actually due.

What this means for you

Retailers and point-of-sale operators

Equipment limitations did not shift the correct-tax obligation away from the retailer.

Accountants and tax professionals

Reconcile tax actually due against tax collected. Both excess collections and undercollections created remittance consequences under the letter.

Common questions

Q: Could the retailer round the tax rate?
A: The Comptroller did not authorize it.

Q: What happened if the rate was rounded up?
A: The extra tax collected had to be remitted.

Q: What happened if the rate was rounded down?
A: The retailer had to make up the shortfall.

Citations and references

• The letter cites no statute or administrative rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8410L0603E03

Original ruling text

October 4, 1984

Dear *****:

Thank you for your letter regarding the programming of cash registers
for the new tax rate.

You stated that some ECR models will not accept a tax table nor will
they accept a three digit number past the decimal.

The law does not permit the rounding of a tax rate and we cannot
authorize that the rate be rounded up. However, if the rate is rounded,
please understand that the retailer is responsible for remitting the
proper amount of tax. If rounded up, the additional sales tax collected
must be remitted. If rounded down, the actual tax due may exceed the
tax collected. The retailer would be responsible for making up the
difference.

This opinion is based upon the facts you presented. If there are addi-
tional or different facts, this opinion may change.

Please feel free to contact me if you have additional questions. You
may write me, or call toll free 1-800-252-5555 from anywhere in Texas or
phone 512/475-1931.

Sincerely,

(Mrs.) Jo Ann Dieck
Tax Policy
Tax Administration Division