Austin founders hear the same line from every relocation pitch: Texas has no state income tax. That is true for you personally, and it is true in the sense that Texas has no corporate income tax either. It is not true that a startup in Austin has no state tax obligations. Texas runs its business taxation through a gross margin based franchise tax, a sales tax that reaches most SaaS, and a local property tax on business equipment. Each one has its own form, its own date, and its own penalty for the founder who assumed Texas meant tax free.
The good news is that the Texas rules are unusually kind to early stage companies. The no tax due threshold sits at $2.65 million of revenue, the research credit was rebuilt in 2025 legislation in a way that can pay cash to companies under that threshold, and the business personal property exemption jumped to $125,000 in 2026. The work for most Austin startups is filing correctly, not paying a lot.
This guide covers Austin startup taxes for calendar year 2027, layered on top of the federal and Delaware obligations every venture backed C-corp carries. For the full federal calendar, see our 2027 startup tax deadlines guide. Figures below reflect what the Texas Comptroller, the Texas Secretary of State, and the 2025 legislative record show as of November 2026. Texas updates thresholds every two years and the R&D credit rules are still new, so confirm on the official pages before you file.
The Consolidated 2027 Calendar
Dates assume a calendar year Delaware C-corp registered to do business in Texas with an office or employees in Austin. Weekend shifts are applied.
| Date | Layer | What is due |
|---|---|---|
| Jan 15 (Fri) | Federal | Q4 2026 personal estimated taxes for founders (Form 1040-ES) |
| Jan 20 (Wed) | Texas | Monthly sales tax return for December; Q4 2026 quarterly sales tax return; annual filers' 2026 return |
| Feb 1 (Mon) | Federal | W-2s to employees and SSA; 1099-NEC to contractors and IRS (January 31 is a Sunday) |
| Feb 1 (Mon) | Texas | Q4 2026 Texas Workforce Commission unemployment tax report |
| Mar 1 (Mon) | Delaware | Delaware franchise tax and annual report |
| Apr 15 (Thu) | Federal | Form 1120 or Form 7004 extension; Q1 2027 estimates |
| Apr 15 (Thu) | Travis County | Business personal property rendition, if you are above the exemption or asked to render |
| Apr 30 (Fri) | Texas | Q1 2027 TWC unemployment tax report |
| May 17 (Mon) | Texas | Franchise tax report plus Public Information Report (May 15 is a Saturday); deadline to request an extension |
| Jun 15 (Tue) | Federal | Q2 estimates |
| Aug 2 (Mon) | Texas | Q2 TWC unemployment tax report (July 31 is a Saturday) |
| Aug 16 (Mon) | Texas | Extended franchise report for mandatory EFT payers on the first extension (August 15 is a Sunday) |
| Sep 15 (Wed) | Federal | Q3 estimates |
| Oct 15 (Fri) | Federal | Extended Form 1120 |
| Nov 1 (Mon) | Texas | Q3 TWC unemployment tax report (October 31 is a Sunday) |
| Nov 15 (Mon) | Texas | Extended franchise tax report and PIR |
| Dec 15 (Wed) | Federal | Q4 corporate estimate |
Monthly sales tax returns are due on the 20th of every month for the prior month, and quarterly returns on the 20th of the month after each quarter (April 20, July 20, October 20). If the 20th lands on a weekend, it moves to the next business day.
Step Zero: Registering Your Delaware Corp in Texas
Most Austin startups are Delaware corporations. Before anything else on this list applies cleanly, the company needs to register as a foreign corporation with the Texas Secretary of State using Form 301, the Application for Registration of a Foreign For-Profit Corporation. The filing fee is $750, and the Secretary of State's instructions warn that a corporation that transacts business without registering faces a late fee equal to the registration fee for each year it was unregistered, plus limits on its ability to bring suit in Texas courts.
Founders sometimes delay this because the first Austin hire is remote or the office is a coworking desk. That rarely holds up. An employee in Texas, an office, or meaningful Texas revenue each points toward registration, and the franchise tax uses an economic nexus standard of $500,000 in Texas gross receipts even without physical presence. Register when you first have people or property in the state, and record the Texas registration date: it is what starts your franchise tax clock.
Note what Texas does not have: there is no separate annual report filed with the Secretary of State for corporations. The Public Information Report filed with the Comptroller each May does that job, which is exactly why missing it is so costly.
The Texas Franchise Tax: The Core Austin Obligation
The Texas franchise tax is a privilege tax on taxable entities doing business in Texas, including corporations and LLCs. It is not an income tax. It is measured on taxable margin, which for most companies is total revenue minus the largest of four deductions: cost of goods sold, compensation, 30 percent of revenue (meaning margin is capped at 70 percent of revenue), or a flat $1 million.
The numbers for 2026 and 2027 reports, per the Comptroller:
- No tax due threshold: $2,650,000 of total annualized revenue.
- Rate for most startups: 0.75 percent of taxable margin (0.375 percent for qualifying retailers and wholesalers).
- EZ computation: entities with total revenue of $20 million or less may elect the EZ computation, at 0.331 percent of apportioned revenue with no deductions.
The due date is May 15. In 2027 that date is a Saturday, so the report is due Monday, May 17, 2027. The report for 2027 covers your accounting year ending in 2026, so the revenue that matters is your 2026 revenue.
First year timing. A company that becomes subject to the tax in 2026 generally files its first annual report on May 15 of the following year, based on the period from its beginning date (often the Texas registration date) through the end of its accounting year. The Comptroller's extension rules note that the option to extend by paying 100 percent of prior year tax is not available on a first annual report.
Extensions. Extensions run to November 15. Entities under the no tax due threshold can secure one by filing a no payment extension on or before the original due date, which also extends the PIR. Mandatory EFT payers must first extend to August 15 and then to November 15; the Comptroller states that an EFT filer who misses the August step cannot later move to November.
The No Tax Due Rule Most Founders Misread
For years, small Texas entities filed a No Tax Due Report. Starting with the 2024 report year, that report went away. Now an entity at or below the $2.65 million threshold satisfies its annual franchise tax requirement by filing only its Public Information Report (corporations and LLCs) or Ownership Information Report (other entities such as partnerships).
The PIR lists officers, directors, managers, and the registered agent. It is short. It is also the single most common Texas miss we see, because founders hear no tax due and stop reading. An entity that fails to file can lose its right to transact business in Texas, meaning it cannot defend itself in Texas courts, and officers and directors can become personally liable for certain debts incurred after forfeiture. For a company in a fundraise, a forfeited status flag in diligence is avoidable pain.
Once you cross $2.65 million, the full report and payment are due, and the choice between the cost of goods sold deduction, the compensation deduction, and the EZ computation becomes real money. Software companies often find the compensation deduction most useful because engineering payroll dominates their cost base. That modeling belongs in your annual tax planning, not on May 14.
Texas Sales Tax on SaaS: Taxed at 80 Percent of the Price
Texas is one of the states that taxes SaaS, and the mechanism is specific. The Comptroller generally classifies remotely accessed software as a data processing service, and Texas Tax Code section 151.351 exempts 20 percent of the value of data processing services. The result: sales tax applies to 80 percent of the charge.
At the Austin combined rate of 8.25 percent (6.25 percent state plus 2 percent local), the effective rate on a SaaS invoice is about 6.6 percent. A few practical points:
- Register before you sell to Texas customers. An Austin based company has physical nexus from day one. Out of state sellers must collect once Texas revenue exceeds $500,000 in the preceding twelve months.
- Separately state the components. Comptroller letter rulings have tied the 20 percent exemption to separately stated data processing charges, and bundled hardware or other taxable services can lose it. Invoice structure matters.
- Classification is fact specific. Some services that look like software can be classified as information services or other taxable services with different treatment, and the Comptroller has been updating its data processing rule. If your product is a hybrid of software, data, and human services, get a written position.
- Exemption certificates. Resale and exemption certificates from customers need to be collected and stored; an auditor will ask for them.
Returns follow your assigned frequency (monthly, quarterly, or annual) and are due on the 20th. Sales tax is also where multistate exposure grows quietly. If you sell to customers in other states, use our tax compliance checklist to map where you have nexus.
The New Texas R&D Credit: Potentially Refundable for Startups
This is the most important Texas change for venture backed companies in years, and it is easy to miss because it arrived through franchise tax law.
Senate Bill 2206, signed in June 2025 and effective January 1, 2026, did three things according to the enrolled bill analysis:
- Repealed the R&D sales tax exemption in Tax Code section 151.3182. Companies can no longer buy research equipment free of sales tax under that exemption. An entity that used the exemption during a report period cannot claim the new credit for that same period.
- Replaced the old franchise tax research credit with a new credit in a new subchapter. The new credit is 8.722 percent of qualified research expenses above 50 percent of the average for the prior three periods. If the company had no qualified research expenses in one or more of the prior three periods, the credit is 4.361 percent of current period expenses. The rates rise to 10.903 percent and 5.451 percent when the research is done under a contract with an institution of higher education.
- Made the credit refundable for entities that owe no tax because they fall under the no tax due threshold (or the veteran owned business exemption). For an Austin startup with heavy engineering spend and revenue under $2.65 million, that converts a credit with no tax to offset into a potential cash refund.
The credit ties to federal Form 6765 and federal research credit law in effect for the year, so the work you do for the federal R&D tax credit is the foundation. Two hedges: the Comptroller has authority to adopt rules on which expenses qualify, and procedures for a brand new refundable credit tend to be refined in the first filing seasons. Treat the 2027 report as the first year to evaluate carefully, and confirm current Comptroller guidance and forms before booking a refund in your cash forecast.
Travis County Business Personal Property: The April 15 Rendition
Texas taxes business personal property at the local level. Computers, servers, furniture, and leased equipment used in your Austin office are appraised by the Travis Central Appraisal District, and the taxing units in which they sit (county, city, school district, and others) levy tax on that value.
The rendition, which is the form that reports what you own as of January 1, is due April 15, and a written request extends it to May 15. Late or missing renditions can carry a penalty of 10 percent of the tax.
The big change: voters approved Proposition 9 in November 2025, implementing House Bill 9, which raised the business personal property exemption from $2,500 to $125,000 effective January 1, 2026. Appraisal district guidance indicates that businesses with property below $125,000 in a taxing unit generally do not need to file a rendition, but a chief appraiser can still require one, and appraisal districts have not been uniform on how the exemption interacts with multiple locations. Practical guidance for 2027:
- A typical seed stage office with a few dozen laptops and some furniture is likely under $125,000 and owes nothing. Keep your fixed asset register current anyway so you can prove it.
- If TCAD sends you a rendition request, respond. Do not assume the exemption covers you if you have been asked.
- Hardware heavy startups with labs, servers, or inventory can exceed the threshold quickly and should plan to render.
Payroll in Texas: No Income Tax Withholding, Still Some Filings
There is no Texas personal income tax, so there is no state withholding on employee wages. Austin employers still register with the Texas Workforce Commission for state unemployment tax, file quarterly wage reports, and pay unemployment tax on the first $9,000 of each employee's wages at an assigned rate. Quarterly reports are due at the end of the month after each quarter, which in 2027 means February 1, April 30, August 2, and November 1 after weekend shifts. Your payroll provider usually handles this, but confirm the TWC account exists and is linked; a missing account is a common surprise for companies that hired their first Texas employee through an out of state payroll setup.
The Federal and Delaware Layer, Briefly
The Texas obligations sit on top of the dates every Delaware C-corp has:
- February 1, 2027: W-2s and 1099-NEC forms (January 31 is a Sunday). Under the One Big Beautiful Bill Act, the reporting threshold for Forms 1099-NEC and 1099-MISC rose from $600 to $2,000 for payments made after December 31, 2025, so the forms you file in early 2027 for 2026 payments use the $2,000 threshold. The figure is indexed for inflation after 2026.
- March 1, 2027: Delaware franchise tax and annual report. Use the assumed par value method; our Delaware franchise tax calculator shows why the default notice can be off by orders of magnitude.
- April 15, 2027: Form 1120 or the Form 7004 extension, plus the first quarterly estimate.
- October 15, 2027: extended Form 1120.
A Delaware corp with Texas operations does not file a Texas corporate income tax return, because there is none. The Texas franchise report is the state level return.
The Classic Austin Founder Mistakes
- Treating no state income tax as no state tax. The franchise report and PIR are annual, regardless of revenue.
- Skipping the PIR because no tax is due. Since 2024 the PIR is the filing for companies under the threshold. Missing it risks forfeiture.
- Never registering the Delaware corp with the Secretary of State. The late fee compounds by year.
- Not collecting sales tax on SaaS. Texas taxes 80 percent of the price. Uncollected tax becomes a liability you pay out of your own pocket, often surfacing in acquisition diligence.
- Still planning around the R&D sales tax exemption. It was repealed effective 2026. The new value sits in the franchise tax credit.
- Ignoring a TCAD rendition request because of the new $125,000 exemption.
How This Fits With Your Other States
Most Austin startups are not single state companies for long. A remote engineer in Colorado or a sales hire in California adds filings fast, and California's layer is considerably heavier than Texas.
StartupCFO tracks federal, state, and local deadlines across all 50 states on every plan, and our tax service includes a 50 percent discount on preparation of one federal and one state return, with additional states and agency filing fees billed as add ons. If you would like a second set of eyes on your Texas setup before the May 2027 report, book a consultation.
This article is general information, not tax advice. Rates, thresholds, and deadlines change, and the Texas Comptroller, the Texas Secretary of State, and the Travis Central Appraisal District publish the controlling figures. Confirm your specific obligations with your CPA and the official pages at comptroller.texas.gov, sos.state.tx.us, and traviscad.org before filing.
