Contact UsWe are seriously considering moving our city out of California and into Texas. My business partner wants to move to Texas and I would like to keep some presence in California. If we generate about 3M a year in Sales Revenue what would be the tax advantage of moving to Texas? Also, if we keep an office here and one primary one in Texas what type of tax situation would this place us in? We want to be compliant and need to know what we must do to be so.
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Tax Professional Answers
Sherry German
Texas has no income tax. It does have a Franchise tax. If you maintain an office or other significant presence in CA you will end up paying taxes to both States. This will not necessarily cause you to pay more tax. It will cause you to be required to maintain additional paperwork and file additional reports. If you are subject to Texas Sales Tax or Business property tax, you need to know that these rates vary by county and are quite high. If you are service or professional type business this will not be a problem but if you are Sales or inventory related you need to know the rate beforehand. You should also know that there are differences in business practices among the different regions of Texas. Houston, Dallas, San Antonio, El Paso, all have differences. Look Before you leap and have an attorney on board from the start.
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566 weeks ago