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The Comptroller of Public Accounts is charged with the administration and collection of state and local sales tax from businesses operating in Texas, and also collects any franchise taxes owed by Texas corporations. There is no state income tax in Texas. The Comptroller maintains field offices in most major Texas cities to provide assistance and aid in complying with tax regulations. For further information on these taxes, contact: Comptroller of Public Accounts, (512) 463-4600 or (800) 252-5555, www.window.state.tx.us/m23taxes.html
There is no income tax for corporations or individuals in Texas.
The Texas franchise tax is a privilege tax imposed on corporations, including banking corporations and limited liability companies, that are chartered in Texas. The tax is also imposed on non-Texas corporations that do business in Texas. For more information, go to www.window.state.tx.us/taxinfo/franchise/franfaq.html. Forms available for download may be accessed at www.window.state.tx.us/taxinfo/taxforms/05-forms.html
You must obtain a Texas sales and use tax permit if you are engaged in business in Texas and you sell tangible personal property in Texas, lease tangible personal property in Texas, or sell taxable services in Texas. To apply for a permit, you must submit a completed application for a Texas sales and use tax permit to the Comptroller's office. An application can be downloaded from our Tax Forms Online page, www.window.state.tx.us/taxinfo/taxforms/00-forms.html. Sole owners should complete form AP-157. All other ownership types (corporations, LLC's, partnerships, etc.) must complete AP-201 and form 01-707. You can also obtain an application by calling 1-800-252-5555 or by visiting one of our enforcement field offices, www.window.state.tx.us/taxinfo/fieldtoll.html#field
The permits required for taxes collected by the Comptroller are defined and outlined in the section titled Listing of Business Licenses and Permits. www.governor.state.tx.us/divisions/ecodev/sba/files/permits.pdf and www.governor.state.tx.us/divisions/ecodev/sba/files/permitsbyalpha.pdf
If the business owns tangible personal property that is used to produce income, the property must be reported on a rendition form to the local county appraisal district, after January 1 and no later than March 31, each year. Business owners must report all inventories, equipment, and machinery. For additional information, contact the local county appraisal district. For phone numbers, go to www.window.state.tx.us/taxinfo/proptax/adalindex.htm
Unemployment Taxes -- The Texas Workforce Commission collects all unemployment taxes for workers employed in Texas. For information regarding these taxes, to obtain a state employer’s identification number, and for information on tax credits, contact: Texas Workforce Commission Tax Department, www.twc.state.tx.us/
All companies with employees are required to participate in the following employee tax programs:
Federal Income Tax Withholding – All employers are required to withhold income taxes from their employees’ wages for both the Federal and State government. To know how much income tax to withhold from employees' wages, you should have all new employees complete the appropriate forms: a Form W-4, Employee's Withholding Allowance Certificate for Federal withholding, www.irs.gov/pub/irs-pdf/fw4.pdf; Employee Withholding Exemption Certificate (L-4) for state withholding,www.rev.state.la.us/forms/taxforms/1300(4_01)f.pdf
Social Security and Medicare Taxes – By Federal law, all employers must withhold Social Security and Medicare taxes from an employee’s gross wages (7.65% up to a certain amount, 1.45% thereafter). The employer must also pay an equal amount for this tax. Depositing procedures vary depending upon the total amount an employer withholds from all employees. Current information on amounts to withhold as well as up-to-date employee income tax withholding taxes may be found in the IRS publication entitled Circular E, Employer’s Tax Guide, www.irs.gov/publications/p15/index.html
Federal Unemployment (FUTA) Tax – The Federal Unemployment Tax Act (FUTA), with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a Federal and a state unemployment tax. A list of state unemployment tax agencies, including addresses and phone numbers, is available in Pub. 926, Household Employer's Tax Guide. Only the employer pays FUTA tax; it is not deducted from the employee's wages. For more information, see the Instructions for Form 940, www.irs.gov/pub/irs-pdf/i940.pdf
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