Texas Secretary of State (entity formation) / Texas Comptroller of Public Accounts (tax registration) / Local municipality or county for local permits/licenses
Step by Step
How to do it
Determine your business structure: sole proprietor, LLC, corporation, LP, LLP, or professional entity
Register your business entity with the Texas Secretary of State (for LLCs, corporations, LPs, etc.) - file online at SOS.state.tx.us through SOSDirect or the Texas Business Portal (texas.gov/business); Texas offers streamlined online filing
Obtain an EIN from the IRS at irs.gov
Register with the Texas Comptroller of Public Accounts for applicable state taxes at comptroller.texas.gov:
- Texas Sales and Use Tax Permit (if selling taxable goods/services in Texas): free to obtain; apply online through Texas Online Tax Registration
- Texas Franchise Tax (the "margin tax"): applies to most taxable entities with Texas revenues; register and file annually
- Withholding: Texas has NO state income tax, so no employee income tax withholding - this is a significant simplification
FILE ASSUMED NAME (DBA): If operating under a name different from the legal entity name (or as a sole proprietor under any name other than your own full legal name): file Assumed Name Certificate with the Texas Secretary of State (for statewide-business entities) AND/OR with the COUNTY CLERK in each county where you do business; separate county filings required for local assumed names; County Clerk fee varies (~$15-$25)
Check with your city/county for LOCAL BUSINESS LICENSES AND PERMITS: Texas municipalities independently administer local business licensing; Houston, Dallas, San Antonio, Austin, Fort Worth, El Paso, and most TX cities require local business licenses or permits; some also collect local occupational taxes; contact your specific city
Check for industry-specific state licenses: contractors (Texas Department of Licensing and Regulation - tdlr.texas.gov); healthcare professionals, real estate, cosmetologists, engineers through relevant TX state licensing agencies; alcohol/beverage licenses through the Texas Alcoholic Beverage Commission (TABC - tabc.texas.gov)
Renew entity annual franchise tax report with TX Comptroller; renew local licenses annually; renew professional licenses per agency schedule
Details
What you need to know
Required Docs
Business name and type of activity
TX business address and registered agent (must have a Texas registered agent)
Entity formation documents
EIN or SSN
Industry-specific certifications
Fee
LLC formation: $300 (online - one of the higher fees nationally); corporation: $300 (online); LP: $750; ANNUAL FRANCHISE TAX REPORT: revenue-based; entities below the No Tax Due threshold (approximately $1,230,000 for 2025) owe $0 but must still file; Sales Tax Permit: free; DBA: $15-$25 per county + SOS filing fee; local license: varies by city
RENEWAL: Annual Franchise Tax Report due May 15 each year; local license: annual; professional licenses: per agency
ONLINE OPTION: Yes - texas.gov/business; SOSDirect at sos.state.tx.us; Texas Online (comptroller) at comptroller.texas.gov
WHERE TO GO: TX Secretary of State (entity formation); TX Comptroller (tax/franchise tax); County Clerk (county assumed name filing); City Hall (local license); TDLR/appropriate agency (professional licenses)
Online Option
Yes - texas.gov/business; SOSDirect at sos.state.tx.us; Texas Online (comptroller) at comptroller.texas.gov
Where to Go
TX Secretary of State (entity formation); TX Comptroller (tax/franchise tax); County Clerk (county assumed name filing); City Hall (local license); TDLR/appropriate agency (professional licenses)
County-specific variations apply
Texas cities independently administer local business licensing. Houston (Harris County), Dallas, San Antonio (Bexar County), Austin (Travis County), Fort Worth (Tarrant County), El Paso, and most TX cities require local business licenses or occupational permits. County Clerks handle assumed name (DBA) filings in their county. With 254 counties, any multi-county operation needs to file assumed name certificates in each county where it operates under a DBA.
Texas Notes
Important state-specific details
TX LLC FORMATION FEE: $300 - on the HIGH END nationally.
NO STATE INCOME TAX: Texas has no individual or corporate income tax; no employee withholding; major business advantage.
TEXAS FRANCHISE TAX ("margin tax"): applies to most taxable entities; based on lesser of 70% of revenues, revenues minus cost of goods sold, or revenues minus compensation; effective rate typically 0.75% for most businesses (0.375% for retail/wholesale); entities below threshold owe $0 but must still file.
ASSUMED NAME (DBA): Must file with BOTH the Texas Secretary of State AND each County Clerk where you do business - dual filing requirement.
TEXAS SALES TAX: 6.25% state rate; cities/counties/special districts may add up to 2% local = max 8.25% combined; most TX metro areas are 8.25%.
TDLR (Texas Department of Licensing and Regulation): handles many contractor and professional license types - tdlr.texas.gov.