What Is the Business Tax Rate in Texas? Explained

Learn about the Texas business tax, including rates and thresholds for taxable revenue over $1.23M.

0 views

Businesses in Texas are subject to the state franchise tax, which is a tax imposed on taxable business revenue exceeding $1.23 million. The rate varies, generally 0.75% for most entities and 0.375% for entities primarily engaged in retail or wholesale trade.

FAQs & Answers

  1. What is the current Texas franchise tax rate? The Texas franchise tax rate is generally 0.75% for most businesses and 0.375% for entities primarily engaged in retail or wholesale trade.
  2. At what revenue level does the Texas franchise tax apply? The Texas franchise tax applies to taxable business revenue exceeding $1.23 million.
  3. Are retail businesses taxed differently under Texas franchise tax? Yes, retail and wholesale businesses typically pay a lower franchise tax rate of 0.375%.
  4. How is Texas business tax calculated? The tax is calculated based on taxable revenue that exceeds the $1.23 million threshold, applying the appropriate rate depending on the type of business.