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Category: Business
Master business taxation with expert tips on compliance, deductions, and strategies to optimize tax planning and reduce liabilities for your business.
Master business taxation with expert tips on compliance, deductions, and strategies to optimize tax planning and reduce liabilities for your business.
6.25% Sales Tax on SaaS: What Counts as “Taxable Cloud” in Texas?
Texas imposes 6.25% state sales tax on many cloud-based services , including certain SaaS, IaaS, and PaaS platforms. But not all software is taxable. For startups, AI firms, and SaaS providers, knowing what counts as “taxable cloud” in Texas is critical to stay compliant and avoid audits in 2025. Texas Sales Tax on Software: The […]
Data Center Exemption §151.359: Sales Tax Savings for AI Firms
AI and tech companies in Texas can qualify for major sales tax exemptions on servers, power systems, and cooling infrastructure under §151.359. This law can save millions in costs over 20 years , if you meet the eligibility rules. What is the Texas Data Center Exemption? Texas Tax Code §151.359 offers a state sales tax […]
Installment Sales of TX LLC Interests: Is There an Interest Charge?
Selling your Texas LLC interest through an installment sale can help spread out capital gains. But does Texas charge interest or tax on this deferred income? While Texas doesn’t have a state income tax, federal rules under IRC §453 and certain Texas Franchise Tax provisions still apply. Here’s how to plan an installment sale properly […]
S-Corp vs LLC in Texas
Choosing between an LLC and an S-Corporation in Texas? While both can limit liability and offer pass-through taxation, they differ greatly in how the Texas Franchise Tax (margin tax) and federal payroll taxes apply. Here’s how to decide what’s best for your business in 2025. LLC vs S-Corp: Federal Classification At the federal level: A […]
QSBS & Texas: Does the State Tax Your 0% Federal Gain?
Qualified Small Business Stock (QSBS) under IRC §1202 offers a powerful tax exemption of up to 100% of federal capital gains. But what about Texas? Does your 0% federal gain remain tax-free at the state level? What is QSBS? Qualified Small Business Stock (QSBS) refers to shares acquired in a qualified C-Corporation under IRC §1202, […]
Nexus for Out-of-State Investors in Texas Series LLCs
Series LLCs offer flexibility and asset protection, but for non-Texas investors, owning part of a Texas Series LLC could unintentionally trigger Franchise Tax nexus. In 2025, understanding when passive ownership becomes taxable presence is crucial to avoid penalties or unwanted filings. What Is a Series LLC? A Series LLC is a Texas entity structure under […]
Texas C-Corp Payroll Setup: Withholding & FUTA Checklist
Texas C-Corp Payroll Setup Establishing payroll for your Texas C-Corporation requires careful setup of federal and state withholding, as well as compliance with the Federal Unemployment Tax Act (FUTA). A correct payroll system ensures timely deposits, accurate reporting, and avoidance of penalties. Relevant Tax & Code References IRC §3402 (Requirement to Withhold Income Tax on […]
Converting a Texas LLC to a Delaware C-Corp Before Seed Funding
Texas LLC to a Delaware C-Corp Entrepreneurs often start as a Texas LLC for simplicity, then convert to a Delaware C-Corporation to attract investors, enable stock issuance, and benefit from Delaware’s well-developed corporate law. A Section 18 conversion under Texas law or a statutory merger can accomplish this transition smoothly. Relevant Code & Tax References […]
DAO LLC in Texas: Legal Status & Tax Treatment
DAO LLC in Texas Decentralized Autonomous Organizations (DAOs) structured as Texas LLCs combine blockchain governance with traditional liability protection. Understanding their legal recognition and tax obligations is key to compliance and operational success. Relevant Code & Tax References Texas Business Organizations Code §3.003 defines an LLC as a “legal entity” separate from its members. Texas […]
Series LLCs in Texas: One Return or Many?
Series LLCs in Texas Texas Series LLCs allow asset segregation into “series” under a master LLC, simplifying formations and liability shields. A common question is whether each series must file its own Texas franchise-tax report or if the master LLC can file just one consolidated return. Relevant Tax & Code References Texas Tax Code §171.101 […]