- Need Professional CPA?
Category: Tax
Our Tax Experts lets you minimize and manage your tax liabilities considering critical tax factors to plan your taxation and guide you to reduce taxes.
Our Tax Experts lets you minimize and manage your tax liabilities considering critical tax factors to plan your taxation and guide you to reduce taxes.
Texas Franchise Tax vs Sales Tax: Which One Hits You First?
Starting a business in Texas? You’ll likely face two major state-level taxes: the Franchise Tax and the Sales and Use Tax. But which one applies first? Which one costs more? This guide will break down how each tax works, when it kicks in, and what startups, e-commerce sellers, and service providers need to prioritize in […]
Texas Unitary Group Rules Explained
If your business operates multiple entities under common control, Texas may require you to file a combined Franchise Tax Report as a unitary group. Ignoring this rule could lead to underreporting, penalties, and even forfeiture. Here’s what every holding company, affiliate group, and multi-LLC structure must know in 2025. What Is a Unitary Group? Under […]
Arm’s-Length for Margin Tax Purposes in Texas
If you operate multiple business entities , especially across states or internationally , and charge management fees between them, Texas wants to ensure these are arm’s-length and not being used to reduce Franchise Tax improperly. Here’s how to structure intercompany fees to withstand scrutiny from the Texas Comptroller in 2025. What Are Intercompany Management Fees? […]
Compensation Deduction Cap ($370K) for 2025
Texas Franchise Tax law allows a deduction for compensation paid to employees , but it’s capped. For 2025, the maximum deduction per person is $370,000. For founders and key employees, smart planning around this cap can reduce your Texas Franchise Tax without triggering IRS or state-level scrutiny. What Is the Compensation Deduction Cap? Under Texas […]
How Stripe Tax Handles Texas Local Sales Tax Rates
Stripe Tax helps businesses automate sales tax collection, but when selling to Texas customers, things get more complex. Texas not only imposes a 6.25% state sales tax, but also adds up to 2% in local sales tax. Does Stripe handle this for you? Here’s how Stripe Tax manages local rates and what Texas sellers need […]
Do API Vendors Trigger Collection in Texas?
If your tech startup sells digital goods, software, or services through an API or platform, you may be surprised to learn that Texas classifies some API-driven ecosystems as marketplaces. Under Texas law, marketplace facilitators are responsible for sales tax collection. So do API vendors qualify? Let’s break it down. What Is a Marketplace Facilitator? According […]
Texas Sales Tax Exemption on R&D Equipment
Tech and R&D-driven businesses in Texas can qualify for a sales-tax exemption on certain equipment and software purchases used for research and development. Under the 20% discount rule, you don’t need to apply for full exemption status , you can claim an automatic 20% sales tax reduction at point of sale. Here’s how it works […]
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 […]
Texas R&D Franchise-Tax Credit vs Federal R&D: Double Benefit?
Startups and tech firms in Texas can claim two separate R&D tax credits , one from the IRS and one from the Texas Comptroller. But can you claim both? What’s the difference, and how do you avoid missing thousands in refunds or offset credits in 2025? Let’s break it down. What is the Federal R&D […]
Foreign-Owned Texas SMLLC: Form 5472 and Franchise-Tax Issues
If you’re a non-U.S. person owning a Single-Member LLC (SMLLC) in Texas, you have two compliance fronts: IRS reporting under Form 5472 and Texas Franchise Tax requirements. Missing either can lead to steep penalties or business forfeiture. Here’s what every foreign owner needs to know in 2025. What is a Foreign-Owned SMLLC? A foreign-owned SMLLC […]