Bookkeeping, franchise tax, and LLC formation support for Texas businesses
Texas runs on different rules than income-tax states — no personal income tax, but a franchise tax and filing requirements of its own. RazaPro supports Texas small businesses and the CPA firms serving them with bookkeeping, franchise tax and sales tax filing prep, and LLC formation.
Book a free consultationWhat's different about Texas
No state income tax, but franchise tax applies
Texas doesn't tax personal income, but most LLCs and corporations still owe an annual franchise tax report — a 2026 no-tax-due threshold of $2,650,000 in annualized revenue means many small businesses owe $0, but nearly all still have to file.
Sales tax up to 8.25% combined
State rate is 6.25%, with local cities, counties, and districts adding up to 2% more. Getting the combined rate right by jurisdiction is where a lot of Texas businesses lose time or make errors.
LLC formation through the Secretary of State
Formation runs through a Certificate of Formation filed with the Texas Secretary of State — no publication requirement, but registered agent, EIN, and first-year franchise tax setup still need to be handled correctly from the start.
Frequently asked questions
Does Texas have a state income tax for small businesses?
Texas has no state personal income tax. Most Texas LLCs and small businesses instead deal with the Texas franchise tax and, for retailers, state and local sales tax — a different set of obligations than income-tax states, not a lighter one.
Do I need to file a Texas franchise tax report if my business is small?
For the 2026 report year, businesses with annualized total revenue at or below $2,650,000 owe no franchise tax, but almost all Texas entities still must file a Public Information Report or Ownership Information Report every year to stay in good standing with the Comptroller — 'no tax due' is not the same as 'no filing required.'
What's the sales tax rate for a Texas business?
The Texas state sales tax rate is 6.25%, and local jurisdictions can add up to 2% more, for a combined rate as high as 8.25% depending on location. Texas is generally an origin-based sourcing state for in-state sellers, which changes how tax is calculated compared to destination-based states.
How is an LLC formed in Texas?
A Texas LLC is formed by filing a Certificate of Formation (Form 205) with the Texas Secretary of State. Texas doesn't require the newspaper-publication step some other states do, which simplifies the process, but an EIN, registered agent, and initial franchise tax/PIR filing setup still need to happen correctly from day one.
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