No state income tax with strong Austin tech ecosystem. Lower cost alternative to Delaware with growing VC acceptance.
When Texas, USA is the right call, and when it is not.
Texas has no personal or corporate income tax. Only the Texas Franchise Tax (margin tax) at 0.375%-0.75% on revenue above $1.23M. For most early stage SaaS that means $0 state tax until scale, with Stripe and Mercury onboarding in 72 hours.
Texas remains the centre of US oil, gas and grid scale infrastructure. Permits route through state agencies that are faster and lighter than CA or NY equivalents, and the Texas Comptroller treats operating businesses with predictable rules.
Personal Texas residency removes 13.3% California state tax on salaries and exits. The Austin VC ecosystem is now real. Not Sand Hill Road, but credible enough that Texas C-corps no longer always need a Delaware flip for seed.
Tier-1 funds still default to Delaware case law for cap table protection and acquirer comfort. A Texas C-corp can flip later, but it's friction at the worst time.
Texas is excellent for US operations but lacks treaty network depth and EU access. For IP holdcos or cross border royalties, route through a treaty jurisdiction.
Working data for Texas, USA. Cite check each figure before use.
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Each rate, threshold, and deadline below is cited from an authoritative source.
Information is provided for general guidance and reflects tax year 2025 unless noted. Specific situations require advice from a local practitioner. Always confirm against the cited tax authority and registrar before relying on a figure.