Texas franchise tax, sales tax and payroll deposits: a finance calendar for Dallas firms

No state income tax does not mean no Texas tax calendar

A growing Dallas company should build at least three recurring obligations into its finance calendar: the Texas franchise tax report due each May 15, sales and use tax returns on the schedule the Texas Comptroller assigns, and federal payroll tax deposits on every pay cycle. Texas has no personal income tax, which owners rightly value, but the franchise tax and sales tax still require planning, and both affect cash. The goal is simple: no deadline should ever be a surprise, and every payment should already be in the cash forecast.

I am a partner at ECFO and work with companies in Dallas and elsewhere as a fractional and interim CFO, and tax oversight is part of that role. I am not your tax preparer, and nothing here replaces advice from a CPA or tax attorney who knows your facts. What I can explain is how these obligations fit into the way a well-run finance function plans its year, and where I see growing companies get caught out.

The Texas franchise tax in plain terms

The Texas Comptroller describes the franchise tax as a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas. For most growing companies the key facts are when it is due, whether any tax is owed, and which rate applies. The annual report is due May 15, moving to the next business day if that date falls on a weekend or holiday.

For the 2026 and 2027 report years, the Comptroller lists a no-tax-due threshold of $2.65 million, up from $2.47 million for 2024 and 2025. Entities at or below the threshold still file, typically a Public Information Report or an Ownership Information Report rather than paying tax. Above it, the Comptroller lists rates of 0.375 percent for retail or wholesale businesses and 0.75 percent for other businesses for those report years, with an EZ computation option at 0.331 percent for entities with total revenue at or below $20 million. How taxable margin is calculated, and which method is most favorable, is a question for your tax advisor.

• Confirm which entities in your group have a Texas franchise tax filing obligation.
• Put May 15 on the calendar, with internal deadlines several weeks earlier.
• Track revenue against the no-tax-due threshold as the company grows.
• Ask your CPA which computation method fits your business each year.
• Remember that thresholds and rates vary by report year.

Why growth changes the franchise tax picture

Many young companies spend years below the no-tax-due threshold and treat the franchise report as paperwork. Then a strong year pushes revenue over the line, and a tax that was never in the budget appears. Because the report is filed after the year has ended, the bill arrives months after the revenue that created it, often when cash is already committed to growth.

The fix is to estimate the franchise tax each quarter once revenue is approaching the threshold, accrue it in the monthly statements and include the payment in the cash forecast. It is a small discipline, but it removes a predictable surprise. The same logic applies when you add entities or acquire a company: each one may carry its own filing obligation, and someone has to own the list.

Sales and use tax: cash that is never yours

If your company sells taxable goods or services in Texas, the sales tax you collect belongs to the state from the moment you collect it. The Comptroller lists a state rate of 6.25 percent on retail sales, leases and rentals of most goods, and says cities, counties, special purpose districts and transit authorities can add up to 2 percent, for a maximum combined rate of 8.25 percent. Whether a given product or service is taxable, and which local rate applies, depends on the details, so confirm your position with your CPA.

From a finance point of view, the risk is treating collected tax as operating cash. The Comptroller assigns filers a monthly, quarterly or yearly schedule. Monthly returns are due on the 20th of the month after the reporting month, and quarterly returns on April 20, July 20, October 20 and January 20. I recommend that companies with meaningful sales tax collections either sweep the amount into a separate account or at least show it as a committed outflow in the weekly forecast, so it is never spent by accident.

Use tax: the purchase side companies forget

Use tax is the companion to sales tax. Broadly, when a business buys taxable items for its own use and the seller did not charge Texas sales tax, the business may owe use tax instead. This comes up with out-of-state vendors, online purchases and imported equipment or supplies. It is easy to miss because nobody sends an invoice for it.

I mention it because it tends to surface during an audit or a buyer's due diligence, when it is most expensive to discover. A simple control helps: have whoever approves purchases flag items bought without Texas tax so the accounting team can review them before each return. Your CPA can tell you which purchases matter for your business.

Imports deserve a separate note. Companies that buy equipment or inventory from overseas suppliers deal with customs duties as well as any state tax questions, and both need to be in the landed cost of goods so that margins are measured correctly.

Payroll deposits: the federal obligation with personal stakes

Texas does not have a state income tax to withhold, but federal income tax withholding and payroll taxes still apply on every pay cycle. The IRS treats the income tax and employee share of payroll taxes withheld from wages as money held in trust for employees until it is deposited. Under the Trust Fund Recovery Penalty, a person with the duty and power to direct the collecting and paying of those taxes can be held personally liable for the unpaid amount.

That is why payroll deposits sit at the top of every cash plan I build. When a company is under pressure, the temptation is to pay a loud supplier first and the IRS a few days later. My guide on the early warning signs of a cash crisis explains why that choice is so dangerous. If deposits are already behind, speak with a tax professional immediately.

A year at a glance: the finance calendar I set up

Every company's calendar differs, but the structure is similar. Recurring items sit in a shared calendar with an owner and an internal deadline ahead of the official one, and each payment is mirrored in the cash forecast. The point is not to memorize dates; it is to make sure each obligation has a name next to it.

Once the calendar exists, review it in a short monthly finance meeting alongside the cash forecast. Ten minutes is usually enough to confirm what was filed and paid last month, what is due next month and whether anything has changed, such as a new entity, a new product line that may be taxable or a change in your assigned sales tax filing schedule. That routine is what keeps the calendar accurate as the company grows, rather than drifting out of date the first time a responsible person goes on vacation or leaves.

• Every pay cycle: federal payroll tax deposits, confirmed by someone other than the person who ran payroll.
• Monthly or quarterly: Texas sales and use tax returns on the assigned schedule, due on the 20th.
• Quarterly: estimated franchise tax accrual once revenue nears the threshold, and federal payroll filings.
• Year-end: closing the books promptly so returns and the franchise report can be prepared on time.
• May 15: Texas franchise tax report, prepared and reviewed weeks earlier.
• Ongoing: an updated list of every entity and its filing obligations.

Where companies get caught out

The problems I see are rarely about not knowing a rule exists. They are about ownership and timing. A deadline belongs to someone who left. A new entity was formed and nobody registered it for the right taxes. Books close so late that the CPA prepares returns in a rush. Collected sales tax sits in the operating account and gets spent during a slow month. If your books are already well behind, a local CPA's guide on catching up a year of books before tax season is a practical starting point.

Each of these is a process failure, which makes each one fixable. A clear calendar, named owners, a timely monthly close and a cash forecast that includes every tax payment remove most of the risk. The controls that support this are covered in my guide to internal controls for a growing company.

Building tax oversight into your finance function

In my engagements, tax oversight means making sure the calendar exists, the obligations are owned, the books are ready on time for your CPA, and every payment is planned in the forecast. It also means coordinating with your tax advisor on bigger questions, such as entity structure, acquisitions or operations outside Texas or outside the United States, where I have handled cross-border tax and transfer pricing matters for many years.

If your company is growing and the tax calendar lives in one person's head, that is worth fixing before the next deadline. I work with companies across the Dallas–Fort Worth area and remotely, and I am glad to look at how your finance calendar runs today.

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