A vending machine in Texas needs a sales tax permit from the Comptroller. There is no fee, though the Comptroller can require a security bond (Comptroller4). Texas has no general state business license (Governor’s Business Permit Office22), and the state health department does not permit vending machines (25 TAC §229.37113). Some cities do: Austin charges a $120 application fee and $25 a machine each year (Austin Public Health18).
Sales tax is due on 100% of what the machine takes in from candy and soft drinks, and on 50% of what it takes in from other food, such as chips and crackers (34 TAC §3.2931). Amusement machines are a separate regime: $60 a year per machine (Tex. Occ. Code §2153.4018).
The permits
| Permit | Who issues it | Who needs it | Cost |
|---|---|---|---|
| Sales and use tax permit | Texas Comptroller | Every operator selling taxable items | $0; a security bond may be required |
| City health permit | City or county health department | Depends on the city; Austin lists a vending machine permit | Austin: $120 application, $25 per machine per year |
| State retail food permit | DSHS | Not vending machines; they are excluded | — |
| Coin-op occupation tax and license | Texas Comptroller | Amusement, music, and game machines only | $60 per machine; license from $200 |
| LLC certificate of formation | Secretary of State | Optional | $300 |
| Assumed name certificate | County clerk (sole proprietor) or Secretary of State (LLC) | Anyone trading under a name other than their own | $25 at the Secretary of State |
Sales tax permit
Every seller engaged in business in Texas, including itinerant vendors, needs a sales and use tax permit (34 TAC §3.2862). The Comptroller treats vending machine operators as itinerant vendors, which means they collect local sales tax for the jurisdictions where the machines sit (Publication 94-1055).
The state rate is 6.25%. Local jurisdictions can add up to 2%, for a combined maximum of 8.25%. After the permit is approved, the Comptroller assigns a monthly, quarterly, or yearly filing schedule; returns are due on the 20th (Comptroller3).
How vending sales are taxed
Texas sets out vending machine tax in subsection (d) of Rule 3.293. Food sold through vending machines means food “dispensed from a machine or other mechanical device that accepts payment” (34 TAC §3.2931).
| Product | Taxable share of receipts |
|---|---|
| Soft drinks, including sweetened bottled tea and coffee and flavored water | 100% |
| Candy, including gum and chocolate-coated or candied nuts | 100% |
| Snack items: chips, crackers, pretzels, popcorn, plain nuts, trail mix, granola and protein bars | 50% |
| Milk, unsweetened tea and coffee, juice over 50% juice | 50% |
| Ice cream and frozen yogurt | 50% |
| Water: bottled, spring, sparkling, mineral | Exempt |
| Food, gum, candy, and toys at $0.50 or less from a bulk vending machine | Exempt |
The 50% and 100% figures apply “without any deduction for spoilage, waste, or other losses.” The split between candy and snacks follows the rule’s definitions. Candy is a confection made with sweeteners. A granola, nutrition, or protein bar counts as a snack item unless it is labeled and marketed as candy. Drinks that contain milk or milk substitutes, and juices over 50% juice, are not soft drinks (34 TAC §3.2931).
Two exemptions in the rule are narrow. A bulk vending machine dispenses unsorted items at random without a selection, such as a gumball machine. Sales through a machine owned by a 501(c)(3) are exempt only if people with special needs stock and maintain it as part of that nonprofit’s life skills program.
Prices include the tax
The operator has to put a sign on each machine stating that the vended price includes sales tax. If the price includes the tax, the operator may back the tax out before reporting taxable sales (34 TAC §3.293(d)(4)1).
The Comptroller does not publish a factor table for vending the way California’s CDTFA does. The arithmetic below applies the same method as California’s cold-food factor: taxable sales on a 50% line are receipts ÷ (2 + rate), and on a 100% line they are receipts ÷ (1 + rate). At 8.25% those factors are 48.0192% and 92.3788%. Confirm the method with the Comptroller before you file. I’d ask for that confirmation by email before the first return is due.
Worked example at 8.25%
A machine in a city at the 8.25% cap took in $400 of chips and crackers, $100 of soda, $50 of candy bars, and $50 of plain bottled water in a month:
| Chips and crackers: $400 × 48.0192% | $192.08 |
|---|---|
| Soda: $100 × 92.3788% | $92.38 |
| Candy: $50 × 92.3788% | $46.19 |
| Bottled water: exempt | $0.00 |
| Taxable sales | $330.65 |
| Tax due at 8.25% | $27.28 |
Reporting the full $600 as taxable would mean paying $49.50, which is $22.22 too much. Keep chips, candy, soda, and water as separate lines in your sales reports, since each goes in at a different share.
Smart coolers and micro markets
Texas’s definition of food sold through vending machines turns on a device that accepts payment, and says nothing about whether the item is dispensed before or after payment (34 TAC §3.2931). We did not find a Comptroller ruling on smart coolers that unlock first and charge after the door closes. Ask the Comptroller for a private letter ruling, and keep the answer. For a smart cooler, I think that ruling is worth requesting before the first return is filed.
On the food side, the Texas Food Establishment Rules have a separate section for self-service food markets: unstaffed markets offering packaged food, including refrigerated or frozen TCS food. They need 24/7 video surveillance kept for 14 days, tamper-evident packaging, and an automatic shut-off or approved plan on any unit holding refrigerated TCS food (25 TAC §228.22512). See smart cooler vending machines for the equipment.
Health permits: which machines need one
The Texas Food Establishment Rules exclude “an establishment that offers only prepackaged foods that are not TCS foods” from the definition of a food establishment (25 TAC §228.211). DSHS’s FAQ puts it in plain terms: no permit is required to offer only prepackaged non-potentially hazardous food, such as bottled drinks or snacks (DSHS14). For DSHS permits and fees, food and beverage vending machines are excluded outright (25 TAC §229.371(6)(C)(x)13).
Cities and counties with their own health departments write their own rules. Since September 1, 2025, a local health entity cannot charge more than DSHS would for a comparable permit for a food service establishment, retail food store, mobile food unit, roadside vendor, or temporary event. The bill does not mention vending machines (S.B. 1008 analysis17).
City health permit fees
| City | Vending machine fee | What the city publishes |
|---|---|---|
| Austin | $120 application; $25 per machine per year | Listed under City of Austin and inter-local fees; the schedule says it takes effect November 1, 2026. Listed as n/a for unincorporated Travis County |
| Houston | Not published | Food Dealer permit $224.44 to $739.44 by risk, plus a $33.56 admin fee and a $112.57 or $225.14 inspection fee |
| Dallas | Not published | Retail food permit $258 to $773 by food sales volume |
| San Antonio | Not published | Food establishment permit $310 to $928 by food sales volume |
Sources: Austin Public Health18, Houston Permitting Center19, Dallas Consumer Health20, San Antonio21.
Austin’s schedule does not say which machines need its permit. Houston’s Food Dealer permit cites Houston Code §20-36(a) and defines a food establishment to include operations that vend food and “packaged-food-only food establishments” (Houston Permitting Center19). That is wider than the state definition. Whether Houston applies it to a snack machine is not published. Call the city’s health department with the machine type and what it will hold before you place it. My preference would be to get the answer by email, so there is a record if an inspector reads the code differently later.
Rules for a machine that holds TCS food
Texas adopts the FDA Food Code 2017 by reference, and Texas rules prevail where they conflict (25 TAC §228.110). For a machine vending TCS food, such as sandwiches, salads, or yogurt, the Food Code requires an automatic control that stops vending when the machine cannot hold temperature, until it is serviced and restocked. A refrigerated machine’s air temperature may not exceed 41°F for more than 30 minutes after it is filled, serviced, or restocked (FDA Food Code 2017, §4-204.11116).
If you make or package food yourself, or put your name on a product someone else makes, DSHS treats you as a food manufacturer and you need its license. Manufacturing in living or sleeping quarters is not allowed unless the space is completely partitioned from the home (DSHS15).
Amusement machines
Chapter 2153 of the Occupations Code taxes coin-operated machines that play a game, music, or pleasure machine. Each one pays a $60 annual occupation tax, and the permit has to be visible and attached to the machine (Comptroller6). Food, confection, beverage, merchandise, and cigarette vending machines are exempt from the chapter if they are subject to an occupation or gross receipts tax (§2153.0047).
An owner who places amusement machines in other businesses needs a general business license. For 50 or fewer machines it is $200 if postmarked by November 30 and $400 from April 1. Renewals are due November 30 (Comptroller6). Counties can add their own tax. Harris County charges $15 per machine for a permit bought January through March, falling by quarter to $3.75 from October (Harris County Tax Office9). More on how this compares with other states in vending machine business license and LLC.
Business registration and an LLC
The state requires every business to register with the Secretary of State or a county clerk, and that registration stands in for a general business license (Governor’s Business Permit Office22). A sole proprietor trading under another name files an assumed name certificate with the county clerk in each county where it keeps an office. An LLC files its assumed name with the Secretary of State, for $25, for a term of up to 10 years (Secretary of State24).
A Texas LLC costs $300 to form with Form 205 (Form 80623). Franchise tax applies only above the no-tax-due threshold, which is $2.47 million for 2024 and 2025 reports and $2.65 million for 2026 and 2027 reports (Comptroller25). Since 2024, an LLC under the threshold no longer files a No Tax Due Report, but it still files a Public Information Report or Ownership Information Report (Comptroller26), due May 15.
The federal rule at 20 machines
An operator with 20 or more machines has to post calories for each item under the FDA’s vending rule. Items whose Nutrition Facts label the buyer can see before purchase are exempt (FDA27). For California’s version of these rules, see California vending machine permits.
