What State Taxes Does a Small Business Pay in Texas and Florida?
Neither Texas nor Florida has a personal income tax, but both tax businesses in other ways. Texas charges a franchise tax of 0.75% of taxable margin (0.375% for retailers and wholesalers) when revenue is above $2.65 million for 2026 reports, plus 6.25% state sales tax and up to 2% local; Florida charges 5.5% corporate income tax on a C corporation's net income above $50,000, plus 6% state sales tax and county surtax.
By SF Business Solutions · Our team includes one licensed CPA · 7 sources · Updated September 10, 2026
Side by side
As of September 2026:
| Tax | Texas | Florida |
|---|---|---|
| Personal income tax | None | None |
| Business income or franchise tax | Franchise tax on taxable margin: 0.75%, or 0.375% for retail and wholesale; no tax due at or below $2.65 million in revenue for 2026 reports | Corporate income tax: 5.5% of net income above the first $50,000, for C corporations and LLCs taxed as corporations |
| Annual filing | Franchise tax report due May 15; entities under the threshold still file a Public Information or Ownership Information Report | Florida corporate income tax return (Form F-1120) for corporations that owe or must file |
| State sales tax | 6.25%, plus up to 2% local (8.25% maximum) | 6%, plus a county discretionary surtax |
| Unemployment tax | On the first $9,000 of each employee's wages; 2.7% for new employers in 2026 | Reemployment tax on the first $7,000 of each employee's wages; 2.7% for new employers |
Texas franchise tax in practice
Most Texas LLCs, corporations and partnerships are taxable entities for franchise tax. For reports due in 2026, an entity with annualized total revenue at or below $2.65 million owes no tax and does not file the franchise tax report itself, but it must still file a Public Information Report or an Ownership Information Report.
Above the threshold, the rate is 0.75% of taxable margin, or 0.375% for retailers and wholesalers. Entities with total revenue of $20 million or less can use the EZ Computation at 0.331% of apportioned revenue. The report is due May 15, or the next business day when May 15 falls on a weekend or holiday.
Florida corporate income tax in practice
Florida's corporate income tax applies to C corporations and to LLCs that elect to be taxed as corporations. The rate is 5.5%, and the first $50,000 of net income is exempt, so a small C corporation with modest profit may owe little or nothing.
S corporations and LLCs taxed as partnerships generally don't pay Florida corporate income tax, though some still have Florida filing requirements. Check the specifics before assuming you have nothing to file.
Sales tax and payroll tax
Both states tax most retail sales of goods, and the combined rate depends on where the sale happens: Texas adds up to 2% of local tax to its 6.25% state rate, and Florida counties add a discretionary surtax to the 6% state rate. Sales tax you collect belongs to the state, so it should sit in a sales tax payable account, not in income.
Employers in both states pay state unemployment tax, which is paid by the employer and not withheld from wages. Texas applies it to the first $9,000 of each employee's wages and Florida to the first $7,000; new employers in both states start at 2.7%, and rates then move with the employer's claims history.
Keeping the records these filings need
Every one of these filings starts from the books: revenue for the Texas threshold, net income for Florida, taxable sales by location, and wages by employee. SF Business Solutions serves businesses across the United States, with business addresses in Gibsonton, Florida and Pflugerville, Texas. We keep the books in QuickBooks Online or Xero from $250 a month and prepare and file business tax returns.
- Texas Comptroller: Franchise tax
- Texas Comptroller: 2026 franchise tax forms and no tax due threshold
- Texas Comptroller: Sales and use tax
- Texas Workforce Commission: Your 2026 tax rates
- Florida Department of Revenue: Tax and interest rates
- Florida Department of Revenue: Corporate income tax
- Tax Foundation: Florida tax rates and rankings (2026)
Does a Texas LLC pay state income tax?
No, Texas has no income tax, but LLCs are subject to the franchise tax. For 2026 reports no tax is due at or below $2.65 million in annualized revenue, though a Public Information or Ownership Information Report is still required.
When is the Texas franchise tax report due?
May 15 each year, or the next business day if May 15 falls on a weekend or holiday.
Does a Florida S corporation pay Florida corporate income tax?
Generally not; the 5.5% tax applies to C corporations and LLCs taxed as corporations. Some S corporations still have Florida filing requirements, so check yours before assuming there is nothing to file.
What is the sales tax rate in Florida?
6% at the state level, plus a discretionary surtax that depends on the county.
Do Texas and Florida employers pay state unemployment tax?
Yes. Texas applies it to the first $9,000 of each employee's wages and Florida to the first $7,000, and new employers in both states start at 2.7%.
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