Texas Business License
If you're doing business in the state of Texas, there are some specific steps that need to be taken in order to ensure that you're registered properly. Like any state in the US, the state and municipal governments have certain requirements for business owners. These particular requirements will vary between local governments and will depend on the type of business that you would like to run. Generally speaking, you'll have to register the business and fill out accompanying tax forms. Any business owner with employees will have to fill out specific paperwork for each member of the staff. Here's a list of some of the major Texas business registrations, licenses, and permits.
1. Tax Registration
When conducting business in the state of Texas, you have to have a tax ID through which the IRS can accept tax payments. For individuals, social security numbers (SSN) are sufficient for this purpose. On the other hand, business owners have to apply for an Employer Identification Number. Any corporation, business partnership, or employer with employees needs this tax ID. If you have any questions about this step of the process, you can reach the IRS at 1-800-829-4933.
Tax Registration in Texas: Any business operating in Texas have to also register for specific permits, licenses, or identification numbers for varying tax purposes. Some examples include unemployment insurance, income tax withholding, and permits for use and sales tax. You can contact state offices in Texas for more information about the registration and tax obligations of business owners. You can access more forms and gain more tax information by visiting the office of the Texas Comptroller.
2. Business Licenses
Licenses for General Business: The official government webpage for the state of Texas offers detailed information about licenses, registration requirements, and permits needed to conduct business legally. On the site, you'll see a series of helpful links and contact information where you can direct specific questions.
Also See: How to Get a Business License
3. Local Permits
There's a good chance that your local government will require different or additional licenses and specific permits. Every municipality runs with regulations that are different than the state of Texas. Here's a list of some common permits and licenses which you may need:
4. Incorporation Filing
If you're running a business as a partnership, nonprofit, limited liability corporation, or as a corporation, you'll have to register directly with the state. Each specific business type will have an associated application and form.
5. Doing Business As
By default, businesses will operate under your legal name. In order to create a fictitious name under which your business can run, you'll have to file directly with the state of Texas. This process is known as a DBA, or Doing Business As. If your business will be operating as a general partnership or sole proprietorship, a DBA form for each name the company will use has to be registered with your area's county clerk. This is where the files will be organized and maintained. If you're operating a professional corporation, limited liability company, corporation, limited liability partnership, professional association, or a nonprofit, you have to register directly with the Texas Secretary of State.
Also See: What is a DBA
6. Employer Requirements
As a business owner in the US, you're responsible for filing and maintaining tax records for current and past employees. The IRS encourages employees to keep these records for a minimum of four years. The IRS published an Employer's Tax Guide which outlines the responsibilities of employers in reference to the withholding of taxes.
Income Tax Withholding/Form W-4: Each employee is required to sign and complete an exemption certificate. This Form W-4 is to be turned in to the employer before or on the start date. Employers are then required to send this form to the IRS. Failure to send in this form can have consequences for any hiree.
Federal Tax and Wage Statement/Form W-2: Each employer has to send an annual report to the IRS regarding tax and wage information that was withheld for employees. This is completed by filling out a Form W-2, also known as a Wage and Tax Statement. A Form W-2 is due by the end of January of each year for every employee. Copy A of the form is sent to the SSA in order to report wages for the previous year. You can find specific information regarding the Form W-2 online.
State Taxes: The specific requirements regarding state tax withholding will vary depending on where business is being conducted. You can visit your state's tax agency to learn more. In the state of Texas, business owners have to apply for a Sales Tax Permit which can be found online.
Employee Eligibility Verification/Form I-9: According to federal law, all employers are required to prove the work eligibility for all employees that are hired after 1986. This proof of eligibility has to happen within three days of employment. This is accomplished by completing, signing, and mailing a Form I-9. The Form I-9 has to be completed for non-citizens and citizens. It's important that employees fill out the form and employers turn it into the relevant authorities in a timely manner.
New Hire Reporting: Each employer is required to report all new hires and re-hires. This declaration has to be made within the first few weeks after a hire has been made. Information regarding the hire is to be submitted using the New Hire Reporting Program established by the state of Texas.
Insurance Requirements: If you're operating a business in Texas, you'll be required to have certain types of insurance. The state's Unemployment Insurance is administered by the Workforce Commission. You can find a general overview of these insurance requirements by visiting the business page on the site of Texas' Department of Insurance.
Disability Insurance: Workers that fall ill or receive an injury due to non-work related issues can receive benefits through temporary disability insurance. Texas doesn't require companies to carry this type of insurance.
Unemployment Insurance Tax Companies that operate within the state of Texas are required to pay certain unemployment benefits to employees who are eligible recipients. You can find more information regarding this top by visiting the Workforce Commission's official website. The unemployment page will have some important information on the subject.
Running a business in Texas isn't so different from operating in other states. There are some state-specific requirements that need to be kept in mind, however. It's important to understand what forms and permits are needed.
Texas Business License FAQ
What kinds of licenses are available in Texas?
Texas does not have a general business license. However, the state has regulatory agencies that require permits and licensing. The type of business and the products or services you sell determine which license is required. Contact your local city or county government offices to find out if licensing is required for your business.
What kinds of occupational licensing are there?
Texas offers over 250 occupational, professional, and facility licenses that can be obtained through the State. You can find the State of Texas's website to determine which specialty license is required. You can search the site for permits and business licenses by looking through an alphabetical list of agencies. Every agency has its own requirements, and you must meet them before your business can be started.
What license do I need for my business?
A majority of Texas cities do not require a license for local businesses. You might need to obtain other permits or zoning approvals to conduct business within your city limits (e.g., taxi cab driver, food delivery, etc.). To find out what permits or zoning requirements are required, contact your city online, in person, and by phone.
What information is required to obtain a license?
First, register the chosen business name with your County Clerk's Office. There may be additional requirements depending on the type of business entity you have (sole proprietor, corporation, LLC). You may be required to apply for a Federal Tax Identification Number (FTIN) or your own Social Security Number.
Do you have to pay a fee?
There are different fees depending on what type of business you run and which permits you need.