Considering expanding your business into Texas? We can’t blame you. With its diverse economy, strong oil and gas sectors, access to top labor talent and automotive and IT technology infrastructure, advanced manufacturing, and life sciences, it may be favorable for many different business sectors to launch within the state of Texas.
If you have recently expanded your business into this state, or if you’re considering doing so, understanding the cost of apportionment is important to help you accurately report earnings to the IRS and local governments.
S Corporations & Partnerships
- Filing Requirements
- Scorps and Partnerships are subject to franchise tax. Franchise tax rates, thresholds and deduction limits vary by report year. Use the rate that corresponds to the year for which you are filing:
- Allocation and Apportionment
- Allocation: Sales factor
- Market-based apportionment
- Texas follows the market-based rule in sourcing receipts from the performance of services to the state. Receipts from the sales of services are sourced to Texas if the service is performed in Texas. If the service is performed both inside and outside of Texas, the receipts are sourced to Texas on the basis of the fair value of services rendered in the state.
Employees & individual filers
- Texas does not impose personal income tax
Download our Multi-State Tax Filing Requirements Guide
Ensuring Accurate Tax Filing
Keeping a handle on these different laws and tax implications might be difficult for your staff members but can be accomplished by outsourcing a CPA. Allow an expert who deals with business structuring, accounting, and taxation regularly set up accounting software to factor in applicable tax laws for each US state.
Fusion CPA recently expanded into new states bringing us firsthand experience and knowledge. We have a team of certified public accountants who are highly skilled in handling multistate taxes. Our team of professionals understands the federal and state laws in various states and jurisdictions.
This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.
- Filing Requirements