2026 Texas State Tax Deadlines
Texas Individual income tax filing deadlines and extensions for 2026
Texas does not impose a state Individual income tax, making it one of the most tax-friendly states for Individuals. However, residents should be aware of federal tax obligations and certain business tax considerations that may apply to specific activities within the state.
Texas business tax deadlines for 2026
Franchise Tax deadlines and requirements
C Corporations and certain other business entities in Texas must file and pay Franchise Tax by May 15, 2027, following Texas's specific due date schedule.
Filing requirements include:
- Complete Form 05-163 (Franchise Tax Report)
- File via Webfile or mail
- Payment must be made by May 15, 2027
- Electronic filing is encouraged for most business entities
Extension to file taxes in Texas for 2026
The Extension Deadline for Texas franchise tax returns is November 15, 2027. Form 05-164 is required for extensions; payment is still due May 15, 2027.
Texas Franchise Tax Structure
Texas imposes a franchise tax (margin tax) based on:
- Margin tax based on revenue rather than net income
- Various deduction options are available
- Minimum tax amounts apply
- Different rates for different entity types
Pass-through entities
Texas does not impose a separate pass-through tax on most S Corporations and Partnerships. These entities file federal returns only, though certain larger entities may be subject to franchise tax.
Texas Individual tax considerations for 2026
No State Individual Income Tax
Texas Individuals enjoy the benefit of no state Individual income tax. However, Individuals should be aware of other tax considerations, including:
- Federal tax obligations remain unchanged
- Sales and use tax on purchases and transactions
- Local property taxes (administered locally)
- No local income taxes (prohibited by state law)
- Estate and gift tax considerations at the federal level
Sales & Use Tax Considerations
While there is no personal income tax, Texas imposes sales and use tax:
- Sales tax: 6.25% state rate plus local taxes
- Use tax: required on out-of-state purchases
- Local jurisdictions add additional sales tax
- Combined rates can exceed 8% in some areas
What Texas tax professionals need to know
Texas's unique tax environment presents specific planning opportunities and compliance considerations for tax professionals working with clients in the state.
Electronic filing requirements
Texas has implemented electronic filing systems for business taxpayers:
- C Corporations should file electronically through Texas Webfile
- Business tax returns can be processed more efficiently through electronic systems
- Professional preparers should use approved systems
- Electronic payment is encouraged for business taxes
Unique Texas tax features for 2026
Texas offers several distinctive tax features, including:
- No personal income tax—prohibited by state constitution
- Franchise tax (margin tax) based on revenue rather than net income
- No local income taxes—forbidden by state law
- Extensive oil and gas tax provisions for energy production
Business Tax Environment
Texas offers several advantages for business formation and operations:
- No state Corporate income tax (franchise tax instead)
- Business-friendly regulatory environment
- Various economic development incentives
- Right-to-work state benefits
Residency Planning Opportunities
Texas's lack of state income tax makes it an attractive state for tax planning purposes, particularly for:
- High-income Individuals considering residency changes
- Retirees seeking tax-friendly retirement locations
- Business owners evaluating state tax burdens
- Entrepreneurs and startup companies
Energy Industry Focus
Texas's significant energy production creates unique tax considerations:
Oil and Gas Industry
- Oil and gas severance taxes
- Production tax provisions
- Working interest considerations
- Enhanced recovery incentives
- Permian Basin and Eagle Ford considerations
Renewable Energy
- Wind energy development (leading wind producer)
- Solar energy initiatives
- Renewable energy equipment considerations
- Grid infrastructure development
Business Development and Incentives
Texas provides various business development programs:
- Texas Enterprise Fund
- Skills Development Fund
- Research and Development Tax Credit (federal)
- Various local economic development incentives
Manufacturing and Industrial Development
Texas emphasizes manufacturing and industrial development:
- Manufacturing equipment sales tax exemptions
- Industrial development programs
- Aerospace and defense industry
- Chemical and petrochemical industry
Technology and Innovation
Texas's growing technology sector:
- Austin technology corridor
- Dallas-Fort Worth technology development
- Houston energy technology
- Research institution Partnerships
Agriculture and Rural Development
Texas's extensive agricultural economy:
- Agricultural equipment sales tax exemptions
- Ranch and farm operation considerations
- Agricultural processing facilities
- Rural development programs
International Trade and Border Commerce
Texas's extensive border with Mexico and international trade:
- Maquiladora and border trade considerations
- International commerce facilitation
- Export development programs
- Cross-border business operations
Real Estate and Development
Texas's growing real estate market:
- Property tax considerations (significant revenue source)
- Real estate development incentives
- Commercial and residential construction
- Infrastructure development programs
Multi-State Tax Planning
Texas residents with income from other states must consider:
- Other states' tax filing requirements for nonresidents
- Credit calculations in other states (limited benefit due to no TX income tax)
- Potential state tax advantages of Texas residency
- Business income allocation issues
Business incentives and credits
Texas provides various business tax incentives:
- Enterprise Zone Program
- Job creation incentives
- Investment tax considerations
- Economic development zones
- Rural business development credits
Transportation and Logistics
Texas's central location and infrastructure create logistics advantages:
- Transportation and warehousing incentives
- Distribution center benefits
- Interstate commerce considerations
- S Corporations' logistics operations
Retirement income considerations
Texas provides favorable retirement income treatment:
- Military retirement pay may be exempt from Texas state income tax
- Social Security benefits are generally exempt from the Texas state income tax
- Pension income considerations for residents
- Senior citizen property tax benefits
Professional tax guidance
Even without state income tax, complex multi-state situations and business tax requirements may require professional attention. Consulting with qualified tax professionals through an accounting firm directory can help ensure compliance and identify available tax-saving opportunities.
Sources
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The material discussed on this page is meant for general illustration and/or informational purposes only and is not to be construed as investment, tax, or legal advice. You must exercise your own independent professional judgment, recognizing that advice should not be based on unreasonable factual or legal assumptions or unreasonably rely upon representations of the client or others. Further, any advice you provide in connection with tax return preparation must comply in full with the requirements of IRS Circular 230.
Please note that if any due date falls on a federal or state holiday or weekend, it may be adjusted to the next business day. Always verify current deadlines with the appropriate tax professional and authorities.
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