Austin Novates

Rev A ยท Austin, Texas

Starting a company in Austin takes a few filings with the state, a free number from the IRS and a look at Texas taxes before the first sale. None of it is hard, but the order matters. A local business attorney or CPA can handle your specific case; these guides explain each step in plain words.

Every guide is built from official sources: the Texas Secretary of State, the Comptroller, the City of Austin, the IRS, the SBA and the USPTO. Start with local resources such as the city’s free small business classes and coaching, and confirm each fee with the agency before you file.

The board

Every Part of a New Business

Three buses: start-up basics, taxes and permits, support and growth. The LED on each chip lights up once you have read the guide.

BUS 1Start-Up BasicsChoosing a structure, forming an LLC with the Secretary of State, filing an assumed name and getting an EIN from the IRS, in the right order.
U01Choosing a Business Structure in Texas: Sole Proprietorship, LLC or CorporationThe first legal decision for an Austin founder is the form of the business. How a sole proprietorship, partnership, LLC and corporation differ in filing, liability and taxes, what the Texas Secretary of State and IRS say about each, and the Texas franchise tax that applies to LLCs and corporations but not to sole proprietors.4 min readDoneU02Forming an LLC in Texas: Form 205 Step by StepA Texas LLC is created by filing a certificate of formation, Form 205, with the Secretary of State for a $300 fee. What each article of the form asks for, choosing a registered agent and office, member- vs. manager-managed, who can be the organizer, and what to do after the LLC exists.4 min readDoneU03Assumed Names (DBAs) in Texas: When and Where to FileDoing business under any name other than your legal one requires an assumed name certificate under chapter 71 of the Texas Business and Commerce Code. Where sole proprietors and entities file, what the certificate must say, how long it lasts, what it does not protect, and the consequences of skipping it.4 min readDoneU04Getting an EIN for Your Austin Business: Free, Online and in the Right OrderAn employer identification number is your business’s federal tax ID. Who needs one, why to form your Texas entity first, how to apply free through the IRS in minutes, who counts as the responsible party, when a change requires a new EIN and when it doesn’t, and how to avoid paying for something that is free.4 min readDone
BUS 2Taxes and PermitsThe Texas franchise tax and sales tax permit, City of Austin permits for a storefront or office, and the new state rules for home-based businesses.
U05The Texas Franchise Tax for Startups: Who Files, Who Pays and WhenTexas has no personal income tax, but LLCs and corporations owe the franchise tax on their margin above a revenue threshold. Who is subject, the $2,650,000 no-tax-due threshold for 2026 and 2027 reports, the 0.375 and 0.75 percent rates, the four ways to compute margin, the May 15 deadline and the information report everyone must file.4 min readDoneU06Texas Sales Tax Permits for New Businesses: Who Needs One and How It WorksSelling goods, leasing equipment or providing taxable services in Texas requires a free sales and use tax permit from the Comptroller. Who must register, why some tech services like data processing are taxable, the 6.25 percent state rate plus local taxes, filing schedules, the 0.5 percent timely-filing discount and when you need a new permit.4 min readDoneU07Austin Business Permits and Zoning: Opening a Storefront, Office or StudioLeasing a space in Austin brings city rules: a certificate of occupancy for your use, possibly a change of use review, building and sign permits, and special permits for food, alcohol, hazardous materials or mobile retail. What Austin Development Services lists, the faster change-of-use review since October 2025 and how to ask the city questions early.4 min readDoneU08Running a Home-Based Business in Austin Under Texas’s New RulesA 2025 Texas law, HB 2464, limits how cities can regulate businesses run from a home. What counts as a “no-impact” home-based business, what Austin can and cannot require, the health, safety and compatibility rules that still apply, HOA and lease restrictions, and the state and federal steps every home business still needs.4 min readDone
BUS 3Support and GrowthFree city help, SBA loans and SBIR awards, patents and trademarks, and the federal and Texas checklist for your first employee.
U09Free and Low-Cost Help for Austin Founders: City, County and Library ResourcesBefore paying for an incubator or consultant, Austin founders can use public resources: the city’s free BizAid orientation and one-on-one coaching, 0 percent crowdfunded microloans through the Austin Kiva Hub, MBE and WBE certification, the library’s business databases, and free process help from Development Services.4 min readDoneU10SBA Loans and SBIR/STTR Awards: Federal Funding Options for Austin StartupsTwo federal programs matter most to small companies: SBA-guaranteed loans made by private lenders, from microloans up to $50,000 to 7(a) loans up to $5 million, and the SBIR and STTR programs, which award non-dilutive R&D funding through 11 federal agencies. How each works, who qualifies and how to start.4 min readDoneU11Patents, Trademarks and Copyrights for Startups: What Protects WhatA startup’s name, invention and code are protected by different tools. How the USPTO explains trademarks, patents and copyrights, the benefits of federal trademark registration, how a provisional patent application buys 12 months of “patent pending,” and why a Texas assumed name is not a trademark.4 min readDoneU12Hiring Your First Employee in Texas: The Federal and State ChecklistYour first hire turns a founder into an employer, with new forms and taxes. The federal paperwork (EIN, Form I-9, Form W-4, W-2), when Texas unemployment tax applies, the initial contribution rate and $9,000 wage base in the Labor Code, new-hire reporting to the state directory, and the difference between an employee and a contractor.4 min readDone

Filing check

What Does Your Business Need to File?

Pick a structure and switch on what applies. The list updates as you go, with the agency, the known fee and the guide for each item.

1. Structure

2. What applies

Bill of materials0 items · known state fees $0
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Fees from the Texas Secretary of State fee schedule; franchise tax threshold for 2026 and 2027 reports. General information, not legal or tax advice.

Issues

Questions Founders Ask

Short answers from state, city and federal sources, each with the guide that goes further.

#01How much does it cost to form an LLC in Texas?answered

The Secretary of State charges $300 to file the certificate of formation, Form 205. It must be signed by the organizer but does not need to be notarized, and the LLC must keep a registered agent and registered office in Texas. See Forming an LLC in Texas: Form 205 Step by Step.

#02Do I need an EIN?answered

The IRS says you generally need one to hire employees or to operate a partnership or corporation. It is free and issued online, usually in minutes; if you are forming an LLC or corporation, file with the state first. You never need to pay a third party for one. See Getting an EIN for Your Austin Business: Free, Online and in the Right Order.

#03Does Texas tax my startup’s income?answered

Texas has no personal income tax. LLCs and corporations are subject to the franchise tax, but for 2026 and 2027 reports no tax is due at or below $2,650,000 in annualized revenue; those entities still file a Public Information Report or Ownership Information Report. See The Texas Franchise Tax for Startups: Who Files, Who Pays and When.

#04When do I need an assumed name (DBA)?answered

Whenever you do business under a name other than your legal name or your entity’s. Sole proprietors file with the county clerk, in Austin the Travis County Clerk; LLCs and corporations file with the Secretary of State. A certificate lasts no more than 10 years. See Assumed Names (DBAs) in Texas: When and Where to File.

#05Are tech services subject to Texas sales tax?answered

Some are. The Comptroller treats data processing as a taxable service, with 20 percent of the charge exempt, so tax applies to the rest. A sales tax permit is free, though the Comptroller may require a security bond. See Texas Sales Tax Permits for New Businesses: Who Needs One and How It Works.

#06Can I run my startup from home in Austin?answered

Usually yes. Under Local Government Code 229.902, added in 2025, a city may not prohibit or require a permit for a no-impact home-based business. A homeowners association can still enforce its own rules and deed restrictions. See Running a Home-Based Business in Austin Under Texas’s New Rules.

#07What free help does the City of Austin offer?answered

The city’s BizAid Business Orientation is a free virtual class and the first step to confidential one-on-one coaching on business plans, marketing and financial readiness. Austin is also an official Kiva Hub for 0 percent crowdfunded microloans. See Free and Low-Cost Help for Austin Founders: City, County and Library Resources.

#08What federal funding can a startup apply for?answered

SBA-guaranteed loans run from microloans of up to $50,000 to 7(a) loans of up to $5 million. For research and development, SBIR and STTR awards are non-dilutive funding from 11 federal agencies. See SBA Loans and SBIR/STTR Awards: Federal Funding Options for Austin Startups.

Changelog

Five Releases of a New Austin Business

The order most founders go through, from an idea to a company with a name, a tax ID and its first employee.

  1. v0.1

    Pick a structure

    A sole proprietorship needs no state filing, and a general partnership can be created by an oral or written agreement. LLCs, corporations and limited partnerships come into being only when you file with the Texas Secretary of State, and the state says each of them shields its owners from personal liability for the entity’s debts. The IRS adds that your form of business decides which income tax return you file. See Choosing a Business Structure in Texas: Sole Proprietorship, LLC or Corporation.

  2. v0.2

    File with the state, then the IRS

    A Texas LLC is created by filing a certificate of formation, Form 205, for a $300 fee. It must keep a registered agent and a registered office at a Texas street address where legal papers can be served in person. Once the state has filed it, apply for an employer identification number: the IRS issues it free, online, usually in minutes. See Forming an LLC in Texas: Form 205 Step by Step and Getting an EIN for Your Austin Business: Free, Online and in the Right Order.

  3. v0.3

    Register the name you trade under

    Doing business under any name other than your legal one needs an assumed name certificate. A sole proprietor files with the county clerk in each county where the business has premises, which in Austin means Travis County; LLCs and corporations file with the Secretary of State. A certificate lasts up to 10 years and is not a trademark: federal registration with the USPTO is a separate step. See Assumed Names (DBAs) in Texas: When and Where to File.

  4. v0.4

    Set up Texas taxes

    Texas has no personal income tax, but LLCs and corporations are subject to the franchise tax. For 2026 and 2027 reports no tax is due at or below $2,650,000 in annualized revenue, though an information report is still filed by May 15. If you sell goods or taxable services, get a free sales and use tax permit from the Comptroller; the state rate is 6.25 percent, and local taxes can add up to 2 percent. See The Texas Franchise Tax for Startups: Who Files, Who Pays and When and Texas Sales Tax Permits for New Businesses: Who Needs One and How It Works.

  5. v0.5

    Find a place to work, then hire

    Since a 2025 state law, Austin may not prohibit or require a permit for a no-impact business run from home. Leasing a space brings a certificate of occupancy for your use, and the city’s change-of-use review has taken about two weeks instead of two months since October 1, 2025. Your first employee means Forms I-9 and W-4, and Texas unemployment tax once you pay $1,500 in wages in a quarter. See Running a Home-Based Business in Austin Under Texas’s New Rules and Hiring Your First Employee in Texas: The Federal and State Checklist.