Texas Business

[aztex]

Howdy,

I'm still planning on a Texas domicile but spoke with a Texan friend who mentioned some sort of business tax. I run a small online shop of my handmade turquoise jewelry on Etsy. AztexSilver if you want to see exactly what I refer to.

Currently an AZ resident and file taxes there and simply pay tax on income....no extra tax because it's a business.

My friends business was a bit more involved than mine but his attitude has raised financial issues I need to address before making the final decision.

Any advice appreciated!

 

 

[Kirk W]

I am not sure exactly what you are asking, but TX has no personal income tax. For other tax related issues, I would suggest contacting a TX attorney. I suggest contacting Susie Adams, an Escapee and frequent contributor to the magazine. 

[Velos]

Good advice Kirk.  We have consulted with Susie Adams in the past and found her advice informative and very helpful

I Googled:   How much is small business tax in Texas?  And found the information below.

SOURCE:   https://comptroller.texas.gov/taxes/franchise/

 

Tax Rates, Thresholds and Deduction Limits

Item	Amount
Tax Rate (retail or wholesale)	0.475%
Tax Rate (other than retail or wholesale)	0.95%
Compensation Deduction Limit	$350,000
EZ Computation Total Revenue Threshold	$10 million

[Twotoes]

aztx, TX has no income tax, but does have sales tax on sales within the State of TX. Any sales shipped to other States will not have TX sales tax but may be taxed in the other State. As far as a TX business tax, if there is one, you could incorporate in another State that does not have a business tax and you would not be a TX business. However be aware of income tax that would be owed to the other State, if any. Maybe SD or FL, for the C or S Corp or LLC. SD and FL do not have income tax but I’m not sure about a business tax. You may be better off in the long run just staying in TX and paying the business tax if any. 

[Chalkie]

I found two items on a tax lawyers website that might be of interest. 

Quote

Texas has a franchise tax that applies to most Texas businesses other than sole proprietorships and certain general partnerships (those where all partners are natural persons as opposed to, e.g., businesses). At the same time, Texas has no personal income tax. Thus, while your Texas business itself may be subject to the franchise tax, any remaining income after these taxes that passes through to you personally, for example from an S corporation, LLC, or limited liability partnership (LLP), will not be subject to further taxation on your personal state tax return.

Quote

Sole Proprietorships. Income from your business will be distributed to you as the sole proprietor, and you will pay federal tax on that income. However, because Texas has no personal income tax apart from interest and dividends, you will not owe tax to the state on your business’s income.

However, I think the above advice to consult an attorney directly is the best advice.

[LiveWorkDream]

I LOVE your jewelry! As a metalsmith myself and Texas-based business owner who works from the road, I really appreciate your work and would love to learn from you some day!

I believe what your friend is referring to is the Polk County Business Personal Property tax. Each year I fill out their rendition form and Polk County taxes me a very small amount on business equipment I claim. It's not a big deal, I believe less than $200 annually for just under $10k of equipment that I claim. Can't recall at the moment.

You can call the Polk Central Appraisal District for more info, 936-327-2174.

The only other business tax I'm aware of is the sales tax I send in (currently annually) on purchases made by my Texas-based customers. 

Hope this helps.