Texas does not allow municipal gross-receipts taxes, so Austin has no local business tax classification scheme; businesses owe only the Texas franchise tax through the Comptroller plus property tax on tangible personal property assessed by Travis Central Appraisal District.
Texas constitutional and statutory limits prohibit municipal gross-receipts business taxes. Austin therefore charges no general business tax, no head tax, and no local payroll tax. State revenue comes from the Texas franchise tax under Tax Code Chapter 171, calculated on margin for entities above the no-tax-due threshold (about $2.47 million in 2026), filed annually with the Comptroller. Austin businesses also pay property tax on tangible business personal property rendered to Travis Central Appraisal District (TCAD), and sales tax of 8.25 percent (6.25 state, 1 city, 1 capital metro). Specific industries owe additional state taxes: hotel occupancy, mixed-beverage gross receipts, motor vehicle, and oil/gas. Local fees apply only to industry-specific licenses (food, alarm, taxi) rather than general business activity.
Failure to file Texas franchise tax triggers a $50 late filing penalty, 5 percent late-payment penalty, plus interest and forfeiture of right to do business under Section 171.251. Failure to render personal property to TCAD adds a 10 percent penalty.
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See how Austin's business tax classification rules stack up against other locations.
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