Business Overview
Texas features one of the largest and most diverse state economies with strengths in energy, technology, manufacturing, and international trade. The state offers no state income tax, competitive regulations, and extensive infrastructure. Its business-friendly policies attract corporate relocations and expansions.
Key Facts & Figures
| Category | Details |
| Capital | Austin |
| Major Cities | Houston, San Antonio, Dallas, Austin, Fort Worth |
| State Sales Tax Rate | 6.25% |
| Local Sales Tax Rate | Up to 2% additional local taxes |
| Corporate Income Tax | 6.5% flat rate |
| Physical Nexus Threshold | Physical presence through employees, offices, or inventory |
| Economic Nexus Threshold | $500,000 in annual sales |
Did you know?
Texas has more Fortune 500 company headquarters than any other state, with a diverse economy spanning energy, technology, and healthcare.
Setup & Compliance
Texas offers business-friendly formation with unique tax considerations.
Texas Business Formation Steps:
- Choose Your Business Structure: Consider Texas’s tax environment, including no personal or corporate income tax.
- Register Your Business: File formation documents with the Texas Secretary of State.
- Register for Tax Accounts: Register with the Comptroller of Public Accounts for sales tax and franchise tax.
- Obtain Required Licenses: Research and secure necessary state and local business licenses.
- Register as an Employer: Register with the Texas Workforce Commission if hiring employees.
Unique Texas Compliance Considerations:
- No Annual Reports: Texas does not require traditional annual reports for most entities.
- Franchise Tax: Businesses with over $1.23 million in revenue pay franchise tax instead of corporate income tax.
- Sales Tax Collection: Collect and remit 6.25% state sales tax plus up to 2% local taxes.
- Public Information Reports: Entities file annual public information reports with franchise tax returns.
- Professional Licensing: Various professions require specialized licenses through state boards.
Hiring & Payroll
Texas offers a highly business-friendly employment environment with minimal state regulations.
Texas Payroll Requirements:
- Unemployment Insurance: Rates from 0.25% to 6.25% on first $9,000 of wages.
- No state income tax withholding.
- Workers’ Compensation: Required in many industries, voluntary for most employers.
Texas Employment Laws:
- Minimum Wage: Follows federal minimum wage ($7.25/hour).
- No state-mandated paid sick or family leave.
- New hire reporting within 20 days.
- Final paycheck due on next regular payday.
- Texas is an at-will employment state with right-to-work laws.
State Incentives
Texas offers robust economic incentives to support business growth and innovation.
Key Business Incentives:
- Texas Enterprise Fund: Grants for job-creating businesses.
- Texas Economic Development Act: Tax incentives for business investment.
- Research and Development Tax Credit: Supports innovative company development.
Small Business & Startup Support:
- Texas Small Business Development Center: Comprehensive business resources.
- Minority Business Development Program.
- Small Business Innovation Research (SBIR) Matching Grants.
Regulatory Considerations
Texas provides a robust regulatory framework supporting diverse business sectors.
Key Business Regulations:
- Data Privacy: Comprehensive laws protecting business and consumer information.
- Environmental Compliance: Regulations for energy and industrial operations.
- Professional Licensing: Required for various service-based professions.
Additional Regulatory Areas:
- Energy Sector Compliance.
- Technology and Innovation Industry Regulations.
Business Overview
Texas features one of the largest and most diverse state economies with strengths in energy, technology, manufacturing, and international trade. The state offers no state income tax, competitive regulations, and extensive infrastructure. Its business-friendly policies attract corporate relocations and expansions.
Key Facts & Figures
| Category | Details |
| Capital | Austin |
| Major Cities | Houston, San Antonio, Dallas, Austin, Fort Worth |
| State Sales Tax Rate | 6.25% |
| Local Sales Tax Rate | Up to 2% additional local taxes |
| Corporate Income Tax | 6.5% flat rate |
| Physical Nexus Threshold | Physical presence through employees, offices, or inventory |
| Economic Nexus Threshold | $500,000 in annual sales |
Did you know?
Texas has more Fortune 500 company headquarters than any other state, with a diverse economy spanning energy, technology, and healthcare.
Setup & Compliance
Texas offers business-friendly formation with unique tax considerations.
Texas Business Formation Steps:
- Choose Your Business Structure: Consider Texas’s tax environment, including no personal or corporate income tax.
- Register Your Business: File formation documents with the Texas Secretary of State.
- Register for Tax Accounts: Register with the Comptroller of Public Accounts for sales tax and franchise tax.
- Obtain Required Licenses: Research and secure necessary state and local business licenses.
- Register as an Employer: Register with the Texas Workforce Commission if hiring employees.
Unique Texas Compliance Considerations:
- No Annual Reports: Texas does not require traditional annual reports for most entities.
- Franchise Tax: Businesses with over $1.23 million in revenue pay franchise tax instead of corporate income tax.
- Sales Tax Collection: Collect and remit 6.25% state sales tax plus up to 2% local taxes.
- Public Information Reports: Entities file annual public information reports with franchise tax returns.
- Professional Licensing: Various professions require specialized licenses through state boards.
Hiring & Payroll
Texas offers a highly business-friendly employment environment with minimal state regulations.
Texas Payroll Requirements:
- Unemployment Insurance: Rates from 0.25% to 6.25% on first $9,000 of wages.
- No state income tax withholding.
- Workers’ Compensation: Required in many industries, voluntary for most employers.
Texas Employment Laws:
- Minimum Wage: Follows federal minimum wage ($7.25/hour).
- No state-mandated paid sick or family leave.
- New hire reporting within 20 days.
- Final paycheck due on next regular payday.
- Texas is an at-will employment state with right-to-work laws.
State Incentives
Texas offers robust economic incentives to support business growth and innovation.
Key Business Incentives:
- Texas Enterprise Fund: Grants for job-creating businesses.
- Texas Economic Development Act: Tax incentives for business investment.
- Research and Development Tax Credit: Supports innovative company development.
Small Business & Startup Support:
- Texas Small Business Development Center: Comprehensive business resources.
- Minority Business Development Program.
- Small Business Innovation Research (SBIR) Matching Grants.
Regulatory Considerations
Texas provides a robust regulatory framework supporting diverse business sectors.
Key Business Regulations:
- Data Privacy: Comprehensive laws protecting business and consumer information.
- Environmental Compliance: Regulations for energy and industrial operations.
- Professional Licensing: Required for various service-based professions.
Additional Regulatory Areas:
- Energy Sector Compliance.
- Technology and Innovation Industry Regulations.
