Texas State Tax Filing Guide (No Personal Income Tax)

1. What Is Texas State Tax Filing?

Texas state tax filing refers to the process of complying with certain business and industry-specific taxes administered by the Texas Comptroller of Public Accounts . Importantly, Texas does not impose a personal state income tax on individuals.

However, specific filing obligations still exist for businesses and entities with Texas-based activity, including franchise tax, oil & gas severance taxes, mining-related taxes, and other industry-specific filings. This is separate from federal income tax filing with the IRS.

2. Who Must File in Texas?

Most individuals do not need to file a Texas state income tax return because Texas has no personal income tax. However, filing may still be required in these situations:

Quick checklist (common scenarios)

1. Businesses and entities with Texas nexus subject to the Texas Franchise Tax (including C-Corporations, LLCs, partnerships, and S-Corporations, unless exempt)
2. Entities engaged in oil & gas activities subject to Texas severance taxes on crude oil or natural gas production
3. Entities involved in mining, quarrying, or other regulated natural resource activities subject to Texas industry-specific taxes or fees
4. Businesses required to file Texas sales and use tax returns due to taxable sales, leases, or services in Texas
5. Businesses with prior Texas tax filings that must file annual or periodic reports, even if no tax is due (e.g., no-tax-due franchise tax reports)

3. Texas Tax Forms – What to File

Texas does not require individuals to file a personal state income tax return. There are no standard Texas individual income tax forms for most taxpayers.

When Texas tax forms are required

1. No individual income tax return is required for residents or most nonresidents
2. Texas Franchise Tax reports apply to entities doing business in Texas, including C-Corporations, LLCs, partnerships, and S-Corporations (with limited exceptions)
3. Fisheries Business Tax filings apply to qualifying fishing-related activities
4. Mining License Tax filings apply to mining operations
5. Oil & Gas Production and Property Tax filings apply to energy-sector businesses

Most people moving to or living in Texas enjoy the benefit of no state income tax. Confirming whether you have any Texas-source income early avoids surprises.

4. Documents Required for Texas Tax Filing (When Applicable)

If you determine you need to file with Texas, prepare these documents in advance:

1. W-2 and 1099 forms: showing any Texas-source income
2. Federal tax return (Form 1040): used as the starting point
3. Texas business tax records: franchise tax reports, sales tax filings, or industry-specific tax documents (if applicable)
4. Business / fisheries / mining income records: profit, expenses, production reports
5. Prior Texas returns (if any): for consistency and carryovers

5. DIY vs Accountant vs Managed Filing

Non-US founders and remote business owners typically choose one of three approaches: DIY, hire an accountant, or use managed filing services.

What typically increases complexity?

1. Texas-source income (fisheries, mining, oil & gas, rentals)
2. Multi-state operations / apportionment questions
3. Pass-through entities with Texas activity

6. Step-by-Step: Texas State Tax Filing (When Required)

Step 1: Confirm whether a Texas tax filing is required

Texas does not impose a personal state income tax, so most individuals have no Texas filing obligation. However, filing may be required if you operate a business with Texas nexus or are subject to franchise tax, sales and use tax, or industry-specific taxes (such as oil, gas, or mining).

Step 2: Obtain an EIN (if filing as a business)

Businesses required to file Texas taxes must have an Employer Identification Number (EIN). If you do not already have one, you can apply directly with the IRS: Apply for an EIN with the IRS .

Step 3: Prepare your federal tax return first

Texas business filings are based on information from your federal tax return. Complete your federal return with the Internal Revenue Service (IRS) before preparing any Texas-specific reports.

Step 4: Determine the correct Texas tax filing

Texas does not use individual income tax forms. Depending on your activity, you may need to file a Texas Franchise Tax Report, sales and use tax returns, or other industry-specific filings administered by the Texas Comptroller of Public Accounts.

Step 5: File the required Texas reports and make payments

Texas tax reports are typically filed electronically through the Comptroller’s online systems. Filing deadlines vary by tax type, but many business filings fall around April 15 or May 15 for calendar-year taxpayers.

Step 6: Keep records and plan ahead

Retain copies of filed reports, payment confirmations, and supporting documents. Tracking Texas-source income and business activity throughout the year helps ensure smooth compliance in future filing periods.

7. Tips to Avoid Texas Tax Notices

• Confirm whether you actually need to file (most individuals do not)
• Report Texas-source income correctly if applicable
• File required Texas business reports by their applicable deadlines (often April 15 or May 15)
• Keep good records of income sources and apportionment
• Respond promptly to any correspondence from the Texas Comptroller of Public Accounts

8. Texas Tax Costs, Penalties, and Timelines

• Personal income tax rate: 0% (no state income tax)
• Late filing penalties (when applicable) Generally 5% initially, increasing to 10%, plus interest, depending on the specific Texas tax involved
• Interest on unpaid tax: Set annually
• Filing extensions: Automatic federal extension usually accepted; payment still due April 15 if tax owed

9. Common Federal & Texas Tax Forms

Texas Tax Forms (when applicable)

• No personal income tax forms for individuals
• Texas Franchise Tax Report (C-Corporations with Texas nexus)
• Fisheries-related Business Tax filings administered by the Texas Comptroller of Public Accounts
• Mining License Tax filings based on Texas mining income
• Oil & Gas–related tax and production filings (not personal income tax)

10. Conclusion

Texas remains one of the few states with no personal state income tax, making it attractive for individuals and many businesses. However, specific filing obligations can still apply for Texas-source income or certain industries.

Understanding your situation helps you stay compliant without unnecessary filings. FormLLC can help confirm your Texas tax obligations quickly and clearly.