Texas Business Compliance Checklist
Texas has one of the higher LLC filing fees ($300) but no state income tax and a Franchise Tax that exempts businesses under $2.47M revenue. This page covers everything from filing fees to sales tax to hiring laws.
$300
$0
Every year
6.25%
state base rate
Yes
1. Entity Formation
| LLC filing fee (Articles of Organization) | $300 |
| Corp filing fee (Articles of Incorporation) | $300 |
| Registered agent required | Yes — must have a physical address in the state |
| Publication requirement | No |
| Processing time | ~7 business days (expedited available for extra fee) |
2. Annual Maintenance
| Annual/periodic report | Every year — fee $0 |
| Franchise tax | Franchise tax on businesses with revenue > $2.47M (2024 threshold). No tax below threshold; ~0.375-0.75% rate above. |
3. Sales Tax
| State base rate | 6.25% |
| Combined rate range (with local) | 6.25% – 8.25% |
| Economic nexus (out-of-state seller) | $500,000 per year |
| Marketplace facilitator law | Yes — marketplaces (Amazon, Etsy) collect on your behalf. |
Need to check nexus across multiple states? Use our Sales Tax Nexus Checker.
4. Employer Requirements
| Minimum wage | $7.25/hr (2025) |
| Paid sick leave law | None (federal only) |
| Non-compete enforceability | Enforceable — reasonable scope and duration required |
| Contractor classification test | Common-law (IRS) test |
Full employment law breakdown: Texas Hiring Laws.
5. Workers' Compensation
Texas allows private-market workers' comp insurance (competitive market). Coverage is required starting with your first employee (all employers).
Estimate your premium with our Workers' Comp Calculator.
6. State Income Tax
Texas has no state individual income tax. This applies to pass-through business income (sole prop, LLC, S-Corp).
Compliance by Business Structure
Pick your structure to see structure-specific compliance items.
What Makes Texas Distinctive
Compliance quirks and rules that separate Texas from other states — worth understanding before you file.
- Texas charges $300 for LLC formation — one of the higher formation fees.
- Texas Franchise Tax exempts businesses with revenue under $2.47M (2024) — most small businesses pay $0 franchise tax.
- Texas requires a Public Information Report annually — free, but must be filed.
- Texas has no state income tax — a major draw for high-earning business owners.
This is a reference, not legal advice.
State fees and rules change. Verify current values with the Texas Secretary of State, Department of Revenue, and Department of Labor before filing. For complex situations, consult a licensed CPA or attorney.