Summary:
Texas business owners often hear the same line every year. Texas has no state income tax, so taxes are simple here.
While Texas does not tax personal income, changes at the federal level and updates to Texas-specific taxes like franchise tax, sales tax, and property tax still affect how much you owe and how you plan.
If you run a plumbing or HVAC company, a real estate or insurance practice, or any service-based business, these new tax rules in Texas can influence cash flow, payroll decisions, and long-term planning.
Texas uses federal taxable income as a starting point for several calculations, including franchise tax. That means federal changes ripple into Texas compliance even without a state income tax.
On top of that, property taxes and sales taxes remain some of the largest tax costs for Texas businesses. Legislative adjustments and local rate changes can quietly increase or decrease what you owe if you are not paying attention.
Federal tax brackets, standard deductions, and payroll tax thresholds increase with inflation in 2026. This impacts how much income is taxed at each rate and how much payroll tax applies to wages.
For business owners, this means projected tax payments may shift slightly compared to prior years. It is a reminder to update estimated tax calculations instead of reusing last year’s numbers.
These updates are published annually by the Internal Revenue Service and affect all states, including Texas.
The federal lifetime estate and gift tax exemption increases again in 2026 to roughly $15 million per individual.
This matters more than many business owners realize. Trades businesses, real estate portfolios, and agency practices often build value quietly over time. Equipment, property, and goodwill can add up.
Owners who plan to transfer a business to family or sell in the future should revisit estate planning strategies now rather than waiting until a transaction is on the table.
Bonus depreciation continues to decline in 2026. Businesses can no longer write off as much equipment in the first year as they could a few years ago.
This directly affects contractors, HVAC companies, and other trades that invest heavily in vehicles, tools, and machinery.
The takeaway is simple. Timing matters more. Large purchases should be reviewed with your accountant before year-end so depreciation rules are applied in the most tax-efficient way.
Texas franchise tax calculations are tied closely to federal taxable income. As federal rules shift, franchise tax outcomes can change as well.
The calculation is tied closely to federal taxable income and uses Texas specific definitions that do not always line up with how businesses keep their books. Changes at the federal level in depreciation, expense treatment, and taxable income can quietly affect franchise tax even when revenue looks unchanged.
For many businesses, especially trades, real estate professionals, and service firms, franchise tax exposure depends on how income, compensation, and costs are classified. Two businesses with the same revenue can end up with very different franchise tax outcomes based on how those numbers flow through the calculation.
This is why franchise tax planning rarely works well with rules of thumb. Small changes in structure, payroll, or deductions can have unintended effects if they are not reviewed in context.
If your business files a Texas franchise tax report, 2026 is a good year to review it with your CPA to confirm that federal changes are not creating hidden exposure or missed opportunities.
Sales tax rates in Texas can change at the local level. Rates can vary depending on where a sale takes place, where a job is performed, or how a product or service is classified. For businesses that work across multiple cities or counties, it is easy to collect the wrong rate without realizing it.
This comes up frequently for contractors, trades businesses, and service companies that invoice for both labor and materials. What is taxable, what rate applies, and where the tax is owed is not always obvious.
In 2026, the risk is less about a new rule and more about accumulation. Small errors repeated across dozens or hundreds of invoices can turn into penalties, back taxes, and notices from the state.
If your business collects sales tax, this is an area worth reviewing periodically with your CPA to confirm that rates, classifications, and filing practices still match how your business actually operates.
Property tax is still one of the largest and least predictable tax costs for Texas business owners.
While recent legislation has focused on relief for homeowners, commercial property values and business personal property are still reassessed regularly. As values rise, tax bills often increase faster than revenue.
For business owners, this includes not only buildings and land, but also equipment, vehicles, and other taxable assets. Many owners do not realize how much of their balance sheet is subject to local property tax until a higher assessment shows up.
Property tax is also one of the few areas where inaction can be costly. If you miss an appeal window or do not review an assessment, the higher value usually sticks.
For 2026, the practical takeaway is not to assume stability. Property tax exposure should be reviewed alongside growth, new equipment purchases, and location changes. A short review with your CPA can help identify whether an appeal or adjustment makes sense.
Tax changes rarely hurt all at once. The impact is usually not one dramatic rule change, but a series of smaller adjustments that add up over time. Higher taxable income, different depreciation outcomes, franchise tax exposure, or overlooked sales and property taxes can quietly strain cash flow if they are not reviewed in context.
At Adam Traywick, CPA, we work with Fort Worth business owners to translate tax law changes into practical decisions. Whether you run a plumbing company, a real estate practice, or an insurance agency, the goal is the same. Pay what you owe, keep what you can, and avoid surprises.
If you have not taken a fresh look at your tax strategy for 2026, now is a good time to start the conversation.
