Harris County, TX Local Taxes & Fees: Business Tax Classification (2026)
Key Facts
- Local biz tax
- None authorized in Texas
- Franchise tax
- TX Comptroller Ch. 171
- Sales tax
- TX Comptroller Ch. 151
- Property tax
- HCAD plus Tax Assessor
- Severity
- Permissive: no local license
Summary
Texas does not authorize counties or cities to levy a general local business license or gross-receipts tax. Harris County businesses pay the state Comptroller franchise tax and sales tax only. The county collects ad valorem property tax on business personal property and inventory under Tax Code Chapter 22.
Franchise Tax. [...] What is Franchise Tax? The Texas franchise tax is a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas. [...] Due Dates: Annual Franchise Tax Reports. The annual franchise tax report is due May 15. If May 15 falls on a weekend or holiday, the due date will be the next business day. [...] Tax Rates, Thresholds and Deduction Limits: 2026 and 2027 — No Tax Due Threshold $2,650,000; Tax Rate (retail or wholesale) 0.375%; Tax Rate (other than retail or wholesale) 0.75%; Compensation Deduction Limit $480,000; EZ Computation Total Revenue Threshold $20 million; EZ Computation Rate 0.331%. 2024 and 2025 — No Tax Due Threshold $2,470,000; Tax Rate (retail or wholesale) 0.375%; Tax Rate (other than retail or wholesale) 0.75%; Compensation Deduction Limit $450,000. [...] Penalties: A $50 penalty is assessed on each report filed after the due date. If tax is paid 1-30 days after the due date, a 5 percent penalty is assessed. If tax is paid over 30 days after the due date, a 10 percent penalty is assessed. Interest: Past due taxes are charged interest beginning 61 days after the due date. [...] Laws: Ch. 171, Franchise Tax; Ch. 172, Tax Credit for Certified Rehabilitation of Certified Historic Structures.
Full Breakdown
Unlike Los Angeles or Chicago, Texas counties cannot impose a general business license tax or gross-receipts tax. Harris County businesses register with the Texas Comptroller for sales tax and franchise tax under Tax Code Chapters 151 and 171. The state franchise tax applies to entities with revenue above the no-tax-due threshold, currently $2.47 million annually. Harris County Appraisal District values business personal property and inventory each year, and the Tax Assessor-Collector collects ad valorem tax on those rolls. Cities including Houston also collect property tax but no local gross-receipts tax. Specialty industry licenses, like alcoholic beverage permits or food handler cards, are state-issued and not Harris County classifications.
Violations & Fines
Failure to file Comptroller franchise tax returns triggers $50 per missed report plus 10 percent penalty plus interest. Unrendered business personal property to HCAD draws a 10 percent penalty under Tax Code 22.28, plus regular delinquency penalties.
Frequently Asked Questions
Does Harris County require a general business license?
What state taxes does a Harris County small business pay?
Sources & Official References
Other rules in Harris County
Texas rules heatmap·Compare Harris County to another location·View the Texas local taxes & fees overview
See something wrong?
Help us keep this page accurate. If you notice an error or outdated information, let us know.