Last updated
Forming a Texas LLC does not hand you a license to trade. The Secretary of State files your Certificate of Formation, and that is a legal record. Whether you also need a license is a separate question, and the answer comes from the kind of work you do and the place you do it. Some owners never need anything beyond the tax registration. Others need several approvals before the first sale.
Is there a general state business license in Texas?
No. A Harris County business roadmap states that the State of Texas does not require a general business license. It adds that you may need a license or permit based on the service or product. Cities can add their own rules. The same guide tells city-based businesses to contact the city about permits, and we did not read any city's requirements.
Which Texas offices issue licenses and permits?
Different offices, depending on the business:
- The Comptroller issues the sales tax permit and collects the franchise tax.
- The Texas Department of Licensing and Regulation covers professions that need state licensing, according to the Harris County guide.
- Your city or county may require local permits, such as building or health permits.
- Other state boards cover specific trades. We did not read their pages, so we name none.
Ask each office what applies to you before you open, and keep a note of who said what and when. The offices do not speak for one another, and a yes from one is not a yes from the rest. Our business license lookup guide shows how to check a license once you hold one. We did not read a Texas license verification tool, so we do not describe one here.
Do I need a Texas sales tax permit?
If you sell or lease tangible personal property in Texas, or sell taxable services, yes. The Comptroller's permit page says to complete the online tax registration application in that case. The permit covers sales and use tax, 911 surcharge and fees, and a sales tax surcharge on diesel equipment.
You apply through the Comptroller's eSystems. The page says to allow two to three weeks to receive the permit. We did not read a permit fee, so we do not quote one. If you are a sole owner, partner, officer or director with no Social Security number, you cannot use the online form and you apply on form AP-201 instead.
What does the Comptroller want from an LLC each year?
The franchise tax report, due May 15 each year. If May 15 lands on a weekend or holiday, it moves to the next business day. The Comptroller's franchise tax page says no tax is due at or below $2,650,000 in revenue. In that case you file the Public Information or Ownership Information Report instead.
A report filed late draws a $50 penalty. Late tax draws 5% or 10%. Thresholds can change, so read that page before you file. Our Texas LLC guide covers the formation step that comes first.
What should you do first?
- Form the LLC and get an EIN. See how to get an EIN.
- Decide whether you sell taxable goods or services, and apply for the sales tax permit if you do.
- Ask your city about permits for your location.
- Check whether your trade needs a state license.
- File a Texas assumed name certificate if you will trade under another name.
For tax ID checks on other businesses, see state tax ID lookup. Neighboring Arkansas handles things differently, as the Arkansas business license guide shows.
This page does not cover city permits, county fees, trade license fees or occupational tax rules.