Taxvation works remotely with businesses based in Texas and with businesses elsewhere that sell into or operate in Texas. We do not have a Texas office; we support clients online and by phone. This page summarizes the state-level tax topics Texas business owners most often ask about and links to the official Texas Comptroller pages, which are the authoritative source.

Two state-level topics affect most small businesses operating in Texas: the franchise tax and sales and use tax.

Texas franchise tax

The Texas Comptroller describes the franchise tax as a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas. The annual franchise tax report is generally due May 15; if that date falls on a weekend or holiday, the due date becomes the next business day. The Comptroller also explains that entities whose revenue is at or below the no-tax-due threshold still have reporting obligations: they file a Public Information Report or an Ownership Information Report, depending on entity type. Thresholds and rates are set by the state and can change, so check the Comptroller page each year.

Texas sales and use tax

According to the Comptroller's sales and use tax page, Texas imposes a 6.25 percent state sales and use tax on retail sales, leases and rentals of most goods, as well as on taxable services. Local taxing jurisdictions, such as cities, counties, special purpose districts and transit authorities, can impose up to 2 percent more, for a maximum combined rate of 8.25 percent. The Comptroller notifies sellers whether they should file monthly or quarterly. Quarterly returns are due on the 20th day of the month after the quarter ends: January 20, April 20, July 20 and October 20.

Sales tax permits

If your business sells, leases or rents taxable items or services in Texas, check whether you need a sales and use tax permit. The Comptroller offers online permit registration.

How bookkeeping supports Texas filings

State filings are only as reliable as the records behind them. For franchise tax, your books provide the revenue and other figures the report is based on. For sales tax, your books need to separate taxable and non-taxable sales and keep sales tax collected out of revenue, recorded as a liability until it is remitted.

We help Texas businesses by:

  • Keeping sales tax collected separate from revenue in the books
  • Reconciling sales tax liability accounts each period
  • Organizing year-end records used for franchise tax reports
  • Keeping payroll and contractor records complete

We do not file on your behalf unless that is part of an agreed engagement, and we always recommend confirming current rates and due dates with the Comptroller.