You’ve got a great idea and lots of enthusiasm. You’ve worked up a business plan and tapped into some funding to launch your passion project. Now what? Texas’ deputy comptroller shares your next steps.
By Chantal Rice, Illustration by Madison Weakley
So, you want to become an entrepreneur. You’ve got a great idea and lots of enthusiasm. You’ve worked up a business plan and tapped into some funding to launch your passion project. Now what? Becoming a successful entrepreneur in Texas requires more than a commitment to your trade and an eagerness to succeed; it also demands you are knowledgeable about and comply with the many correlating duties of business ownership, including staying current with tax filings and payments, ensuring you secure the appropriate permits and maintaining a basic understanding of the relevant statutes—and that’s just for starters. But understanding the responsibilities of business ownership doesn’t have to be overwhelming.
Luckily, the State of Texas is here to help. The office of the Texas Comptroller of Public Accounts, essentially serving as the accountant, treasurer, check writer, tax collector and bookkeeper for the state, is a treasure trove of resources, providing a variety of helpful tools and information for taxpayers and business owners at its many field offices throughout Texas, as well as through its call centers and on its extensive website, where entrepreneurs can learn everything from how to properly fill out tax forms to what services are taxable.
Lisa Craven is one of those knowledgeable experts who’s helping Texans become well-informed in their business pursuits, including the many women entrepreneurs who contribute to making the Lone Star State the pinnacle for women-owned businesses. And as the deputy comptroller, Craven certainly knows how to get down to business. In fact, she’s worked in state service for more than 30 years, beginning her career as a Texas Capitol tour guide before gaining extensive experience in two of the three branches of state government, even working in the Texas House of Representatives for a spell.
Here, Craven shares her top tips for women interested in opening a business in Texas.
OBTAIN A SALES-TAX PERMIT.
“The first thing you need to do is obtain a sales-tax permit. If you’re providing a taxable service or product, you need that permit. The application for that is available on our website, or you can visit one of our field offices to obtain it. We have 17 field offices throughout the state. ... Texas imposes a 6.25 percent sales-and-use tax and up to 2 percent local tax on all retail sales, leases and rentals of most goods, as well as most taxable services. We have a list of taxable services on our website.”
KNOW THE TAXABILITY OF THE PRODUCTS OR SERVICES YOU WILL PROVIDE.
“Read the applicable rules, statutes and publications available on our website. If you’re not certain if you need to apply...you can call us or visit our website. We have a ton of really good info there: forms, taxable-services publications, etc.”
OBTAIN ALL THE REQUIRED PERMITS.
“In addition to the sales-and-use-tax permit, you’ll need to obtain all permits required for your industry. ... For example, you need to get with the [Texas Alcoholic Beverage Commission] for a permit if you plan to sell alcohol. Also, contact your local government to see if you need any other local permits.”
PAY CLOSE ATTENTION TO TAX-FILING DUE DATES AND ACCOUNT FOR ALL SALES AND PURCHASES.
“Taxpayers are required to file monthly, quarterly or yearly. You will receive notification for a filing request once you receive that permit. ... If the due date falls on a Saturday, Sunday or a legal holiday, then the next working day is the due date. Some business owners think if they don’t have any sales in part of the period, they don’t have to file a return. This isn’t true. It’s important for business owners to understand once you’re set up with a tax responsibility, you need to file a report for every period for as long as you’re in business. ... If you start a new business and don’t get it off the ground right away, you still have to file a return. Or if [your business goes] dormant, you still have to file. You can have zero tax, but that lets us know what’s going on. ... It comes into play when you go into an audit. If you have periods where you didn’t make anything, we estimate based on that. Follow those due dates. Keep good records.”
KEEP YOUR CHARTER ACTIVE.
“Texas business entities, including limited partnerships, LLCs and corporations—and even non-Texas entities conducting business in Texas—may be required to file franchise-tax reports and pay franchise tax. You can determine your obligation by reviewing what’s subject to that online. Failure to file and pay those taxes can result in forfeiture of the business and business charter. We have a link on our website that can confirm that status. Or you can call us. You can also file zero on your franchise tax too; you just need to file it.”
KEEP AND MAINTAIN GOOD RECORDS.
“[Everything] goes easier if you have good records. That’s the most important thing. ... Keep and maintain good records of your sales, including any certificates documenting untaxed sales of taxable items, as well as records of tax paid on purchases made for use in your business. These records will make a sales-and- use-tax audit go well.”
