Texas Tax Compliance Map -

Texas Tax Compliance Map

Contact by phone in the Texas time zone:
The Engaging Manager Ian Lin, a well-English speaker
Tel: +1-510-996-2685

GLA – United States – Texas Corporate Income Tax

GLA-US(TX)-01 GLA Tax Entity

Question from client:
Is United States corporate income tax a federal income tax? A state income tax?
Or is there a federal and states income tax?
What if the federal income tax and the states income tax are levied separately or levied together?
What is the standard tax rate? What is the special tax rate?

Answer from Evershine RD:
United States (U.S.) companies must pay both Federal Tax and State Tax.

Federal
Federal Corporate Income Tax Rate is 21%.
S corporation is exempt from federal income tax and exempt from paying taxes at the corporate level.

States – Texas

Texas has no corporate income tax at the state level.
C corporations are subject to the Texas Revised Franchise Tax levied on corporations’ taxable margin.
Texas allows localities to impose corporate income tax.
General Texas franchise tax rate for 2022 are:

0.375% of taxable margin for taxable entities primarily engaged in retail or wholesale trade; and
0.75% of taxable margin for other taxable entities.

Taxable margin is equals the least of 4 calculations:

total revenue minus cost of goods sold.
total revenue minus compensation.
total revenue minus $1 million; or
total revenue times 70%.

Once calculated, the margin is apportioned to Texas to determine the entity’s apportioned margin.
Any other allowable deductions are then subtracted from the apportioned margin to determine the entity’s taxable margin.

GLA-US(TX)-02 Registration

Question from client:
Which government unit is responsible for the collection of United States corporate income tax?
The registration of the country’s corporate income tax status, that is, the tax certificate number application procedure, paper certificate number application? Or online account application? URL?
What is the advance certificate number for applying for this certificate number?
Do I need to use the industrial and commercial certificate electronic card to apply?

Answer from Evershine RD:

Federal
Federal taxes are governed by Inland Revenue Service (IRS).
Employer Identification Number (EIN) serves as a tax ID number for organizations.
EIN can be registered online via www.irs.gov/ein and get the EIN immediately online.
It must be registered under the responsible party, who is someone in control and must be an individual.

States – Texas

The Texas Comptroller of Public Accounts is the agency authorized to administer the tax.
Texas Comptroller’s Office uses an e-file system to assign Texas Tax ID (EIN) number.
Submit your business’s full legal name, federal EIN and contact information, and an 11-digit number will be assigned to the entity.
In Texas, there is no fee to apply.

GLA-US(TX)-03 GLA Order (OD)

Question from client:
What is the order of United States corporate income tax return (information flow determines tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pays?
At the same time as the declaration and payment?

Answer from Evershine RD:
Same period (SP): Filing of tax return and pay the taxes.
Texas does not require the filing of estimated tax reports or payments.

GLA-US(TX)-04 Mechanism of Filing (MOF)

Question from client:
What is the return method for United States corporate income tax return (information flow determines the tax base)?
Filing cycle: monthly? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: website URL?

Answer from Evershine RD:

Federal

Filing deadline for final corporate tax return:
C corporation – 15^th day of the 4th month following the fiscal year.
S corporation – 15^th day of the 3rd month following the fiscal year.

Filing form:
C corporation – 1120 (income tax), 1120-W (estimated tax)
S corporation – 1120S (income tax), 1120-W (estimated tax)

Filing method:

File returns either on paper or electronically.
If file electronically and choose to make their own income tax returns, purchase software approved for electronic filing and take steps to register and complete the IRS e-filing application.
Should discuss various electronic filing methods with the software vendor.
Otherwise, check with a tax professional to prepare their electronic income tax returns earlier and ensure they are an IRS-authorized electronic document provider. Visit https://www.irs.gov/tax-professionals/e-file-provider-services

States – Texas

Texas requires C corporations to file the following tax returns on or before May 15 following the close of the regular annual tax period:

Texas Form 05-158-A/B: Franchise Tax Report
Texas Form 05-102: Franchise Tax Public Information Report

Texas Form 05-163: Franchise Tax No Tax Due Information Report, must be filed if the entity is a passive entity, has a total annualized revenue below the no tax due threshold, or has zero Texas gross receipts.
Electronic filing is available to corporations, but it is not mandatory.
Texas franchise tax reports that are not electronically filed should be mailed to:
Texas Comptroller of Public Accounts
P.O. Box 149348
Austin, TX 78714-9348

Requirements for reporting and paying franchise tax electronically:

Taxes paid in preceding state fiscal year (Sept 1 – Aug 31)	Filing methods
No Tax Due	WebFile, Approved electronic submission software providers, Approved form providers, Tax forms
Less than $10,000	WebFile, Approved electronic submission software providers, Approved form providers, Tax forms
$10,000 – $499,999	WebFile, Approved electronic submission software providers, Approved form providers, Tax forms
$500,000 or more	WebFile, Approved electronic submission software providers, Approved form providers, Tax forms

Web file is available online at www.comptroller.texas.gov/taxes/file-pay/.

GLA-US(TX)-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for United States corporate income tax payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT? Or the above methods coexist?

Answer from Evershine RD:

Federal

Payment deadline for estimated corporate tax return (Form 1120-W):
15th day of the 4th, 6th, 9th, and 12th months of the tax year.
It is 25% of the corporation’s estimated total taxes for the current year or 25% of the corporation’s taxable income for the previous year (the latter option is not available to corporations with annual income of over $1 million).
Installment payments are not required if the estimated tax is less than $500.
Any corporation that is required to deposit estimated taxes must do so through electronic funds transfer. A U.S. bank account is not required for such transfers if other requirements are met.

Payment method:
EFTPS – Electronic Federal Tax Payment System via https://www.eftps.gov/eftps/.

States – Texas

Requirements for paying franchise tax electronically:

Taxes paid in preceding state fiscal year (Sept 1 – Aug 31)	Payment methods
No Tax Due	Not Applicable
Less than $10,000	Web Electronic Funds Transfer (EFT) or credit card via WebFile, Approved electronic submission software providers, TEXNET, Check
$10,000 – $499,999	Web Electronic Funds Transfer (EFT) or credit card via WebFile, Approved electronic submission software providers, TEXNET
$500,000 or more	TEXNET Only

SUT – United States – Texas Sales and Use Tax

SUT-US(TX)-01 VAT Tax Entity

Question from client:
Is United States Sales and Use Tax (SUT) levied at Federal? States?
Or is there a federal plus States SUT?
What if the Federal and States SUT are levied separately or levied together?
What is the standard SUT rate? What are the special SUT rate?

Answer from Evershine RD:
There is no VAT in the United States.
The U.S. federal government currently does not levy either a national VAT or a national general sales tax. Nor do any states impose a VAT.
U.S. state SUT rates range between 2.9% and 7.25%.
Many municipalities also levy local sales taxes.

States – Texas
Texas imposes a state sales and use tax at a uniform rate of 6.25%.
Localities are authorized to impose additional sales and use taxes. The total local rate may not to exceed 2%.
Combined Tax Rate = State Sales Tax Rate + Local Sales Tax Rate

SUT-US(TX)-02 Registration

Question from client:
Which government unit is responsible for the levying of Sales and Use Tax in the United States?
The registration of United States Sales and Use Tax levy status, that is, the application procedure for Sales and Use Tax certificate number, paper certificate number application? Or online account application? URL?
What is the advance certificate number for applying for a Sales and Use Tax certificate number?
Do I need to use an industrial and commercial certificate electronic card to apply?

Answer from Evershine RD:
States customarily require sellers, vendors, and retailers to register with the state to obtain a permit to collect and remit sales and use tax, provided certain thresholds are met.
You need a sales permit when you have physical presence or economic nexus of $100,000 annual sales.
Businesses that conduct taxable transactions in several states are required to register separately in each state.

States – Texas

The Texas Comptroller is responsible for the administration of Texas’ sales and use taxes.
You can apply for sales and use tax permit via eSystems at https://comptroller.texas.gov/taxes/permit/ or mail the completed Form AP-201 to Comptroller of Public Accounts, if:

You engaged in business in Texas and
You sell or lease tangible personal property in Texas or
You sell taxable services in Texas. It takes 2-3 weeks to receive the permit.

SUT-US(TX)-03 WWT Order (OD)

Question from client:
What is the order of United States Sales and Use Tax declaration (information flow determines the tax base) and payment (fund flow)?
Pay first and then declare? First declare and then pay?
At the same time as the declaration and payment?

Answer from Evershine RD:
Same period (SP): Filing of SUT return and pay the taxes.

SUT-US(TX)-04 Mechanism of Filing (MOF)

Question from client:
What is the return method for United States Sales and Use Tax declaration (information flow determines the tax base)?
Reporting cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist?
If electronic filing is possible: Website URL?

Answer from Evershine RD:
U.S. state Sales and Use Tax laws most commonly require filings (with payment) monthly, although smaller sellers and special situations may be accorded less frequent filing intervals.
The most common times specified for filing and payment are 15 or 20 days after the close of a month.

States – Texas
Texas Form 01-114: Sales and Use Tax Return
Sales and use taxpayers who paid $50,000 or more in taxes during the previous state fiscal year are required to file their sales and use tax returns electronically.

Filing deadline

Tax liability in a quarter	Filing frequency	Filing deadline
$1,500 or more	Monthly	20^th of the following month
Less than $1,500	Quarterly (March 31, June 30, September 30, and December 31)	20^th of the following month of the quarter period
Less than $1,000	Yearly	January 20 of next calendar year

Filing method

Taxes paid in preceding state fiscal year (Sept 1 – Aug 31)	Filing methods
Less than $10,000	Webfile, EDI, Telefile, Tax Forms
$10,000 – $49,999	Webfile, EDI, Telefile, Tax Forms
$50,000 – $499,999	Webfile, EDI, Telefile
$500,000 or more	Webfile, EDI, Telefile

SUT-US(TX)-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for United States Sales and Use Tax payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
OCT payment at the bank counter? Or the above methods coexist?

Answer from Evershine RD:

States – Texas
Payment deadline

Tax liability in a quarter	Filing frequency	Payment deadline
$1,500 or more	Monthly	20^th of the following month
Less than $1,500	Quarterly (March 31, June 30, September 30, and December 31)	20^th of the following month of the quarter period
Less than $1,000	Yearly	January 20 of next calendar year

Payment method

Taxes paid in preceding state fiscal year (Sept 1 – Aug 31)	Payment methods
Less than $10,000	EFT, credit card via Webfile, EDI, TEXNET, Check
$10,000 – $49,999	EFT, credit card via Webfile, EDI, TEXNET
$50,000 – $499,999	EFT, credit card via Webfile, EDI, TEXNET
$500,000 or more	EDI, TEXNET

GLA – United States – Texas Corporate Income Tax

GLA-US(TX)-01 GLA Tax Entity

Question from client:
Is the United States corporate income tax a federal income tax? A state income tax?
Or is there a federal and states income tax?
What if the federal income tax and the states income tax are levied separately or levied together?
What is the standard tax rate? What is the special tax rate?

Answer from Evershine RD:
United States (U.S.) companies must pay both Federal Tax and State Tax.

Federal
Federal Corporate Income Tax Rate is 21%.
S corporation is exempt from federal income tax and exempt from paying taxes at the corporate level.

States – Texas
Texas has no corporate income tax at the state level.
C corporations are subject to the Texas Revised Franchise Tax levied on corporations’ taxable margin.
Texas allows localities to impose corporate income tax.
General Texas franchise tax rate for 2022 are:

0.375% of taxable margin for taxable entities primarily engaged in retail or wholesale trade; and
0.75% of taxable margin for other taxable entities.

Taxable margin is equals the least of 4 calculations:

total revenue minus cost of goods sold.
total revenue minus compensation.
total revenue minus $1 million; or
total revenue times 70%.

GLA-US(TX)-02 Registration

Answer from Evershine RD:
Federal
Federal taxes are governed by Inland Revenue Service (IRS).
Employer Identification Number (EIN) serves as a tax ID number for organizations.
EIN can be registered online via www.irs.gov/ein and get the EIN immediately online.
It must be registered under the responsible party, who is someone in control and must be an individual.

States – Texas

GLA-US(TX)-03 GLA Order (OD)

Answer from Evershine RD:

Same period (SP): Filing of tax return and pay the taxes.
Texas does not require the filing of estimated tax reports or payments.

GLA-US(TX)-04 Mechanism of Filing (MOF)

Answer from Evershine RD:

Federal

Filing deadline for final corporate tax return:
C corporation – 15^th day of the 4th month following the fiscal year.
S corporation – 15^th day of the 3rd month following the fiscal year.

Filing form:
C corporation – 1120 (income tax), 1120-W (estimated tax)
S corporation – 1120S (income tax), 1120-W (estimated tax)

Filing method:
File returns either on paper or electronically.
If file electronically and choose to make their own income tax returns, purchase software approved for electronic filing and take steps to register and complete the IRS e-filing application.
Should discuss various electronic filing methods with the software vendor.
Otherwise, check with a tax professional to prepare their electronic income tax returns earlier and ensure they are an IRS-authorized electronic document provider.
Visit https://www.irs.gov/tax-professionals/e-file-provider-services

States – Texas

Texas requires C corporations to file the following tax returns on or before May 15 following the close of the regular annual tax period:

Texas Form 05-158-A/B: Franchise Tax Report
Texas Form 05-102: Franchise Tax Public Information Report

Taxes paid in preceding state fiscal year (Sept 1 – Aug 31)	Filing methods
No Tax Due	WebFile, Approved electronic submission software providers, Approved form providers, Tax forms
Less than $10,000	WebFile, Approved electronic submission software providers, Approved form providers, Tax forms
$10,000 – $499,999	WebFile, Approved electronic submission software providers, Approved form providers, Tax forms
$500,000 or more	WebFile, Approved electronic submission software providers, Approved form providers, Tax forms

Web file is available online at www.comptroller.texas.gov/taxes/file-pay/.

GLA-US(TX)-05 Mechanism of Payment (MOP)

Answer from Evershine RD:

Federal
Payment deadline for estimated corporate tax return (Form 1120-W):
15th day of the 4th, 6th, 9th, and 12th months of the tax year.
It is 25% of the corporation’s estimated total taxes for the current year or 25% of the corporation’s taxable income for the previous year (the latter option is not available to corporations with annual income of over $1 million).
Installment payments are not required if the estimated tax is less than $500.
Any corporation that is required to deposit estimated taxes must do so through electronic funds transfer. A U.S. bank account is not required for such transfers if other requirements are met.

Payment method:
EFTPS – Electronic Federal Tax Payment System via https://www.eftps.gov/eftps/.

States – Texas
Requirements for paying franchise tax electronically:

Taxes paid in preceding state fiscal year (Sept 1 – Aug 31)	Payment methods
No Tax Due	Not Applicable
Less than $10,000	Web Electronic Funds Transfer (EFT) or credit card via WebFile, Approved electronic submission software providers, TEXNET, Check
$10,000 – $499,999	Web Electronic Funds Transfer (EFT) or credit card via WebFile, Approved electronic submission software providers, TEXNET
$500,000 or more	TEXNET Only

SUT – United States – Texas Sales and Use Tax

SUT-US(TX)-01 VAT Tax Entity

States – Texas
Texas imposes a state sales and use tax at a uniform rate of 6.25%.
Localities are authorized to impose additional sales and use taxes.
The total local rate may not to exceed 2%.
Combined Tax Rate = State Sales Tax Rate + Local Sales Tax Rate

SUT-US(TX)-02 Registration

States – Texas
The Texas Comptroller is responsible for the administration of Texas’ sales and use taxes.
You can apply for sales and use tax permit via eSystems at https://comptroller.texas.gov/taxes/permit/ or mail the completed Form AP-201 to Comptroller of Public Accounts, if:

You engaged in business in Texas and
You sell or lease tangible personal property in Texas or
You sell taxable services in Texas.

It takes 2-3 weeks to receive the permit.

SUT-US(TX)-03 WWT Order (OD)

Question from client:
What is the order of United States Sales and Use Tax declaration(information flow determines the tax base) and payment (fund flow)?
Pay first and then declare? First declare and then pay?
At the same time as the declaration and payment?

Answer from Evershine RD:
Same period (SP): Filing of SUT return and pay the taxes.

SUT-US(TX)-04 Mechanism of Filing (MOF)

States – Texas

Texas Form 01-114: Sales and Use Tax Return
Sales and use taxpayers who paid $50,000 or more in taxes during the previous state fiscal year are required to file their sales and use tax returns electronically.

Filing deadline

Tax liability in a quarter	Filing frequency	Filing deadline
$1,500 or more	Monthly	20^th of the following month
Less than $1,500	Quarterly (March 31, June 30, September 30, and December 31)	20^th of the following month of the quarter period
Less than $1,000	Yearly	January 20 of next calendar year

Filing method

Taxes paid in preceding state fiscal year (Sept 1 – Aug 31)	Filing methods
Less than $10,000	Webfile, EDI, Telefile, Tax Forms
$10,000 – $49,999	Webfile, EDI, Telefile, Tax Forms
$50,000 – $499,999	Webfile, EDI, Telefile
$500,000 or more	Webfile, EDI, Telefile

SUT-US(TX)-05 Mechanism of Payment (MOP)

Answer from Evershine RD:

States – Texas

Payment deadline

Tax liability in a quarter	Filing frequency	Payment deadline
$1,500 or more	Monthly	20^th of the following month
Less than $1,500	Quarterly (March 31, June 30, September 30, and December 31)	20^th of the following month of the quarter period
Less than $1,000	Yearly	January 20 of next calendar year

Payment method

Taxes paid in preceding state fiscal year (Sept 1 – Aug 31)	Payment methods
Less than $10,000	EFT, credit card via Webfile, EDI, TEXNET, Check
$10,000 – $49,999	EFT, credit card via Webfile, EDI, TEXNET
$50,000 – $499,999	EFT, credit card via Webfile, EDI, TEXNET
$500,000 or more	EDI, TEXNET

Contact Us

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Tel: +1-510-996-2685

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