Starting a service business in Texas comes down to four things: picking a structure, registering with the state, getting licensed for your trade, and setting up a way to bill customers. Filing an LLC in TX costs $300, ongoing reporting is franchise tax report (no fee if under threshold), sales tax is 6.25% + local, and personal income tax runs No income tax. Below is the full sequence, the fees you should budget for, the licenses most trades need, and the deadlines that catch new Texas owners off guard.
Most new registrations come out of Houston, San Antonio, Dallas and the rest of Texas — local business licenses are issued at the city or county level, so check yours after the state filing clears.
| Item | TX cost |
|---|---|
| LLC / entity filing (one-time) | $300 |
| Annual / periodic report | Franchise tax report (no fee if under threshold) |
| Federal EIN (IRS) | Free |
| Sales tax registration | Typically free |
| Trade / professional license | Varies by trade |
| Local business license | Set by city / county |
Fees change — confirm current amounts with the TX Secretary of State and the Texas Comptroller of Public Accounts.
Choose your structure and file with the TX Secretary of State ($300). Get your free EIN from the IRS the same day.
Register for Texas sales tax with the Texas Comptroller of Public Accounts, then open a business bank account under the registered name.
Apply for your trade license and local business license. This is usually the longest step: Sales tax permit (free); Professional license.
Get general liability insurance (and workers' comp before your first hire), then set up estimates and invoicing so you can bill the day you're cleared to work.
LLC Filing Fee
$300
Annual Report
Franchise tax report (no fee if under threshold)
Sales Tax
6.25% + local
Income Tax
No income tax
Choose your business structure
File with the Texas Secretary of State ($300 for LLC)
Get a federal EIN
Register for Texas sales tax with the Comptroller
Get local permits and licenses
File a franchise tax report annually
Open a business bank account
Get business insurance
No personal income tax — keep more of your earnings
File franchise tax report even if you owe $0 (under $2.47M revenue threshold)
Texas has no state-level business license requirement
Combined sales tax can reach 8.25% with local rates
No personal income tax. Businesses pay franchise (margin) tax only if revenue exceeds $2.47M.
$300 filing fee. No annual report fee if under the franchise tax threshold.
Online LLC filings with the TX Secretary of State are typically processed in a few business days, and an EIN from the IRS is issued immediately online. Trade licensing and local permits usually take longest — plan on two to six weeks before you're fully cleared to work, depending on your trade.
No — you can operate as a sole proprietor in Texas and still invoice customers legally. An LLC ($300 to file, franchise tax report (no fee if under threshold)) separates your personal assets from business liability, which matters most once you're on customer property, hiring help, or signing contracts.
Texas sales tax is 6.25% + local. Materials and goods are commonly taxable, while labor treatment depends on the type of work, so bill parts and labor as separate lines and register with the Texas Comptroller of Public Accounts before you start collecting.
Open a business bank account under the registered name, then invoice from a tool that applies TX tax per line item and accepts cards. Glo Invoice sends invoices by text with a one-tap pay link, and Tap to Pay lets you charge on site before you leave the job.