I run the books for owners all over town, and the questions I get on a Tuesday morning are rarely the ones the national blogs answer. So instead of one more generic explainer, this is my field guide to small business bookkeeping Austin owners can actually use. People here want to know about the franchise tax letter from the Comptroller, why they collect 8.25% on a sale, and whether the appraisal district notice that landed in April is real. I'm answering the actual questions Austin owners ask me — in their words, with concrete answers you can act on this week. Talk to your CPA or attorney before you file anything specific, but this will tell you what to track and why.
"There's no state income tax in Texas, so what am I actually filing?"
This is the first myth I unwind. It's true that Texas has no personal or corporate income tax — that's a real advantage, and it's part of why so many businesses moved here. But "no income tax" does not mean "no state filings." The big one is the Texas franchise tax, administered by the Texas Comptroller of Public Accounts, and it's due May 15 every year for almost every LLC, corporation, and partnership formed or doing business in the state.
Here's the part that catches people: the franchise tax is calculated on your margin, not your net profit. You can lose money for the year and still owe franchise tax, because margin starts from total revenue and then subtracts one of a few allowed deductions (cost of goods sold, compensation, 30% of revenue, or a flat $1 million). For an Austin owner, the practical takeaway is that your books need a clean, defensible total-revenue figure and clean COGS and payroll figures — those are the numbers the franchise calculation pulls from. If your bookkeeping is sloppy, you can't pick the deduction method that legitimately lowers your bill.
"My revenue is small. Do I still have to do anything by May 15?"
Probably yes — and this is where Austin owners get burned. For reports due in 2024 and 2025, the franchise tax "no tax due" threshold is $2.47 million in annualized total revenue. If you're under that, you owe zero franchise tax. Good news.
But owing zero tax is not the same as filing nothing. Most entity types still have to file a Public Information Report (PIR) or Ownership Information Report by May 15, even at $50,000 in revenue. Texas streamlined this so that businesses under the threshold no longer file a separate "No Tax Due Report," but the information report still has to go in. Miss it and the Comptroller can move your entity to "not in good standing," which is the kind of thing you discover at the worst possible moment — when you're trying to close a sale, sign a lease, or get a loan. The fix is simple bookkeeping hygiene: know your entity type, calendar the May 15 deadline, and have your year-end numbers ready well before then.
"Why am I collecting 8.25% sales tax, and is that the same everywhere in Austin?"
The combined rate inside Austin is 8.25%, and it breaks down like this:
- 6.25% — Texas state sales tax
- 1% — City of Austin
- 1% — Capital Metro (the transit authority)
Texas caps the local add-on at 2%, so most Austin addresses land at exactly 8.25%. The trap is the edges of town. A customer's address in a suburb, an ETJ pocket, or an unincorporated part of Travis County can carry a different local combination, and as an Austin business you owe tax based on where the sale is sourced. If you sell online or deliver, this matters. The Comptroller publishes a sales tax rate locator for exactly this reason.
For bookkeeping, the rule is non-negotiable: sales tax you collect is not your money. It's the state's money you're holding. I set up a separate liability account for sales tax payable in every Austin client's books so it never gets counted as revenue and never gets spent. When the filing comes due — monthly, quarterly, or annually depending on your volume, all through the Comptroller's Webfile system — the cash is already set aside. If you want the broader mechanics of keeping clean books behind this, our owner's playbook on how to do bookkeeping for a small business walks through the account structure I use.
"What is this April notice from the appraisal district? I don't own the building."
This one is pure Austin (and pure Texas) and almost nobody outside the state expects it. Even if you lease your space, you likely owe a Business Personal Property (BPP) rendition to the Travis Central Appraisal District (TCAD), generally due April 15. You're reporting the tangible stuff your business owns — equipment, furniture, computers, tools, inventory — so the county can assess property tax on it.
Because Texas leans on property tax instead of income tax, this is how a lot of local revenue gets collected, and the appraisal districts take it seriously. The bookkeeping connection is your fixed asset list. If your books track every equipment purchase with a date and cost, completing the rendition is a thirty-minute job. If they don't, you're digging through a shoebox of receipts in early April while everything else is also due. I keep a running fixed-asset schedule for clients precisely so April is boring.
"I run a food truck / bar / restaurant. What's different for me here?"
Austin's food-and-beverage scene is enormous, and the tax layering is heavier than people realize. If you serve alcohol, you're not just collecting regular sales tax. Texas imposes a 6.7% mixed beverage gross receipts tax on your alcohol sales and an 8.25% mixed beverage sales tax on top — two separate liabilities, both reported to the Comptroller, both distinct from the sales tax on your food. Your books have to split alcohol revenue from food revenue cleanly, or you can't file accurately.
Food trucks have their own rhythm: permitting through Austin Public Health, commissary costs, and a heavy cash-and-card mix that makes daily sales reconciliation essential. The single most useful habit I give mobile-food owners is reconciling the POS deposit batch to the bank every day, so card processing fees and skipped deposits never hide. Hospitality is also brutally seasonal in this town — SXSW, ACL, and the legislative session swing revenue hard — which is why I push restaurant and bar clients toward disciplined cash flow management rather than gut-feel spending.
"Half my crew is 1099. Is that a problem?"
Austin's construction boom and gig-heavy economy mean I see a lot of contractor-heavy payrolls, and worker classification is where I see real money risk. Texas doesn't change the federal rules here — the IRS and the Texas Workforce Commission both care whether someone is genuinely an independent contractor or really a W-2 employee. Misclassify, and the back taxes, penalties, and potential workers' comp exposure dwarf whatever you saved.
From a books standpoint: every 1099 contractor needs a signed W-9 before you pay them, and you need accurate vendor totals so January 1099-NEC filing is a non-event. If you're not sure your crew is classified right — and in trades and cleaning, it's often murkier than owners assume — read our breakdown of how to classify 1099 vs. W-2 workers correctly before your next hire. We also keep industry-specific notes for construction bookkeeping and cleaning company bookkeeping, since both run heavy on subcontractors and job costing.
"What does it actually cost me to ignore all this?"
Not in fees you pay a bookkeeper — in consequences. An Austin owner who lets the franchise PIR lapse can lose good standing and stall a deal. Sales tax collected but spent becomes a personal liability the Comptroller will chase, and Texas can hold responsible individuals personally accountable for unremitted sales tax. A missed BPP rendition can trigger a 10% penalty on the assessed property tax. Misclassified workers can mean years of back assessment. None of these are abstract — they're letters that show up at the address on file, and they cost real cash and real time to unwind.
Clean books are what make all of it routine instead of frightening. When revenue, COGS, payroll, sales tax liability, and your fixed-asset list are accurate and current, every Austin and Texas deadline becomes a data-entry task instead of a fire drill. That's the whole point of bookkeeping done right: not pretty reports, but a business that's never surprised by its own obligations. For the full month-by-month system, our complete guide to small business bookkeeping ties it all together.
Frequently asked questions
Do I have to pay Texas franchise tax if my LLC made no money?
You may still have to file. If annualized revenue is under the $2.47 million no-tax-due threshold (2024–2025 reports), you owe no franchise tax, but most entities must still file a Public Information Report by May 15. Franchise tax is based on margin, not profit. Confirm your situation with your CPA.
When are Texas business tax deadlines I should put on the calendar?
The franchise tax report and Public Information Report on May 15, the Business Personal Property rendition to TCAD around April 15, and your sales tax filing on the frequency the Comptroller assigned (monthly, quarterly, or annually). 1099-NEC forms to contractors are due in late January.
Is Austin sales tax always 8.25%?
Inside the City of Austin, yes — 6.25% state, 1% city, and 1% Capital Metro. But addresses in surrounding suburbs, ETJs, or unincorporated Travis County can carry a different local mix. Source the rate by the sale's location and use the Comptroller's rate locator when in doubt.
Do I owe property tax on my business if I rent my space?
Often yes, on your business personal property — equipment, furniture, inventory, and similar tangible assets — even when you lease the building. That's what the TCAD rendition reports. Keep a current fixed-asset list and the filing stays simple.
Cash or accrual accounting for an Austin small business?
Most small Austin service businesses run cash-basis books day to day because it's simpler and matches how money moves. But your franchise tax revenue figure and any lender reporting may need accrual-adjusted numbers. Keep clean cash-basis books and let your CPA make adjustments at year-end.