If you live or work in Texas, you do not need to file a state income tax return. Texas has no personal income tax, and the state constitution prohibits the legislature from ever creating one.1State of Texas. Texas Constitution Article VIII There is no state return, no state estimated payments, and no state withholding from your paycheck. Your federal return still has to be filed with the IRS as usual.2Internal Revenue Service. Check if You Need to File a Tax Return
That answer covers full-year residents, part-year residents, and non-residents earning wages from Texas-based work. Texas also imposes no state estate tax and no inheritance tax, so heirs owe nothing to Texas on transferred wealth. The federal estate tax is a separate matter and uses a $15 million per-person exemption for 2026.3Internal Revenue Service. What’s New – Estate and Gift Tax
So the simple answer is no. The rest of this article covers the situations where “no state return” doesn’t mean “no state filing at all” — remote work with another state, running a business, owning property, and selling taxable goods or services.
When Another State Still Wants a Return From You
Living in Texas does not protect you from another state’s income tax if that state has a claim on your wages. If you work remotely for an employer based in a state that taxes income, that state may require withholding on what you earn, and because Texas has no return of its own, there is no Texas credit to offset it.
The reverse also catches people. If you keep a residence in a state that taxes income but you work remotely from Texas, your home state will generally still tax you as a resident. Texas withholds nothing, but your home state expects a return.
If you’re an out-of-state employer with Texas-based remote workers, your business can pick up Texas obligations that the employee does not have. A single Texas-based employee can create a physical presence that requires registering with the Texas Comptroller, and companies with more than $500,000 in Texas gross receipts can hit the economic nexus threshold for both franchise tax and sales tax.4Texas Comptroller of Public Accounts. Franchise Tax
If You Own a Business: The Franchise Tax Report
Individuals don’t file in Texas, but most business entities do. The franchise tax applies to corporations, LLCs (including single-member LLCs), and most partnerships. Sole proprietorships and general partnerships owned entirely by individuals are exempt.5Comptroller of Public Accounts. Franchise Tax Overview
Businesses with annualized total revenue at or below $2.65 million owe no franchise tax.4Texas Comptroller of Public Accounts. Franchise Tax That does not get you out of filing. Entities under the threshold still have to file a Public Information Report or Ownership Information Report with the Comptroller each year.6Texas Comptroller of Public Accounts. Texas Franchise Tax Report Forms for 2026 Businesses above the threshold file the annual report on Comptroller Form 05-158.7Comptroller of Public Accounts. Texas Franchise Tax 2025 Annual Report Form 05-158
The deadline is May 15. If May 15 falls on a weekend or holiday, the filing is due the next business day.4Texas Comptroller of Public Accounts. Franchise Tax
Tax rates for 2026 and 2027 are 0.75% for most entities, 0.375% for qualifying retailers and wholesalers, and 0.331% under the simplified EZ Computation. The tax is calculated on “margin,” and businesses pick the most favorable of four methods: total revenue times 70 percent, total revenue minus cost of goods sold, total revenue minus compensation, or total revenue minus $1 million.5Comptroller of Public Accounts. Franchise Tax Overview
If You Own Property in Texas
There is no state property tax in Texas. Property taxes are assessed and collected locally by school districts, cities, counties, and special-purpose districts; the state receives none of it. You do not file a property tax return. The county appraisal district sets your property’s value as of January 1 each year, the county tax assessor-collector sends the bill in October, and payment is due by January 31 of the following year.8Texas Comptroller of Public Accounts. Property Tax System Basics Average effective rates across counties range roughly from 0.4% to over 2%.
There are, however, two things you may want to file.
Exemption Applications
The general residence homestead exemption removes $100,000 from your home’s appraised value for school district taxes, provided you own and occupy the home as your primary residence.9State of Texas. Texas Tax Code 11-13 – Residence Homestead Exemptions Other local taxing units may offer their own optional homestead exemption of at least $3,000.10Texas Comptroller of Public Accounts. Property Tax Exemptions
Owners 65 or older or disabled get an additional $60,000 school district exemption on top of the general homestead amount, and school district taxes freeze at the amount owed the year the exemption is granted.10Texas Comptroller of Public Accounts. Property Tax Exemptions Disabled veterans get a separate exemption that scales with disability rating, from $5,000 at a 10%–29% rating up to $12,000 at 70%–100%. Veterans 65 or older with at least a 10% rating, or who are totally blind or have lost the use of a limb, qualify for the $12,000 exemption regardless of specific rating.11Texas Comptroller of Public Accounts. Disabled Veteran and Surviving Spouse Exemptions Frequently Asked Questions
Protesting the Appraisal
If your appraised value looks too high, you can protest. The appraisal district sends a notice of appraised value by April 1 for homesteads and May 1 for other properties. You file Form 50-132, the Property Owner’s Notice of Protest, by May 15 or within 30 days of the notice mailing date, whichever is later. You can request an informal conference first, and if that fails, you get a formal hearing before the Appraisal Review Board with at least 15 days’ written notice. You carry the burden of showing the value is wrong, so bring comparable sales, repair estimates, and photos.12Texas Comptroller of Public Accounts. Appraisal Protests and Appeals
Business owners have one more filing on the property side: an annual rendition of business personal property — equipment, inventory, furniture, vehicles — filed with the local appraisal district by April 15, with extensions possible to May 15 or May 31. A late rendition can trigger a penalty of 10% of the taxes owed on that property.13Texas Comptroller of Public Accounts. Penalty Tax Bills
If You Sell Goods or Taxable Services
Texas charges a 6.25% state sales tax on most retail sales, leases, and rentals of goods, plus many services. Local jurisdictions can add up to 2% more, for a combined ceiling of 8.25%.14Texas Comptroller of Public Accounts. Sales and Use Tax If you sell, lease, or rent taxable goods or provide taxable services in Texas, you need a sales tax permit from the Comptroller before you start collecting.15Texas Comptroller of Public Accounts. Sales Tax Permit Requirements The same rate applies as “use tax” when you buy taxable goods from an out-of-state seller that doesn’t hold a Texas permit.
What Happens If You Miss a Texas Filing
Texas has few deadlines compared to income-tax states, and the ones it has carry real consequences.
Every late franchise tax report triggers a $50 penalty, even when no tax is owed. Late payment adds 5% for 1–30 days late, 10% after 30 days, and another 10% after the Comptroller issues a formal notice of tax due, for a possible total of 20%. Interest begins accruing 61 days after the due date at a rate the Comptroller sets each year.16Texas Comptroller of Public Accounts. Penalties for Past Due Taxes
Sales tax penalties follow the same schedule, and enforcement runs harder. The Comptroller can freeze and seize assets, file liens, suspend your sales tax permit, and pursue criminal charges — collecting sales tax from customers and failing to remit it is treated especially seriously.16Texas Comptroller of Public Accounts. Penalties for Past Due Taxes
Property taxes become delinquent February 1. A 6% penalty applies in the first month and grows by 1% monthly, with a jump to 12% on July 1 along with attorney collection fees of up to 20%.13Texas Comptroller of Public Accounts. Penalty Tax Bills Years of unpaid property tax can lead to a tax lien sale of the home.