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Tag: Anshul Goyal CPA
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 […]
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 […]
PTET Copycat? Why Texas Has No Pass-Through Elective Tax
In 30+ U.S. states, pass-through businesses can elect to pay income tax at the entity level to bypass the $10,000 SALT deduction cap. But not in Texas. Why has Texas avoided adopting a PTET regime, and what does that mean for LLCs, S-Corps, and partnerships operating in the state? What is PTET? The Pass-Through Entity […]
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 […]
Annualized Revenue Test: Avoiding a Surprise Texas Tax Bill
Annualized Revenue Test If your Texas franchise-tax reporting period isn’t a full 12 months—because you formed or acquired the business mid-year, changed your fiscal year, or operate on a short tax period—you must annualize your total revenue to determine: Whether you fall under the $2.47 million no-tax-due threshold, and Whether you qualify for the E-Z […]