Changes

Texas fosters a favorable tax environment by enforcing franchise taxes that are significantly lower than those of other states and not imposing a personal income tax. This is especially helpful for small businesses that are struggling to establish themselves and grow in their first years. Business that earn less than the EZ Computation Total Revenue Threshold of $20 million in annual revenue can instead file taxes through an EZ Computation Form that has a further reduced tax rate than the normal franchise tax(0.331%). Furthermore, Texas has a no-tax-due threshold of $1.1 million, which means that businesses that have a total annual revenue of less than or equal to $1.1 million are not required to pay any franchise taxes. =Types of Businesses=This information is adapted from Comptroller.texas.gov:==Entities Subject to Franchise Tax==Each taxable entity formed in Texas or doing business in Texas must file and pay franchise tax. These entities include:*corporations*limited liability companies (LLCs), including series LLCs*banks*state limited banking associations*savings and loan associations*S corporations*professional corporations*partnerships (general, limited and limited liability)*trusts*professional associations*business associations*joint ventures*other legal entities. ==Entities Not Subject to Franchise Tax==*sole proprietorships (except for single member LLCs)*general partnerships when direct ownership is composed entirely of natural persons (except for limited liability partnerships)*entities exempt under Tax Code Chapter 171, Subchapter B*certain unincorporated passive entities*certain grantor trusts, estates of natural persons and escrows*real estate mortgage investment conduits and certain qualified real estate investment trusts*a nonprofit self-insurance trust created under Insurance Code Chapter 2212*a trust qualified under Internal Revenue Code Section 401(a)*a trust exempt under Internal Revenue Code Section 501(c)(9)*unincorporated political committees ==Entities Not Subject to Franchise Tax==