Business Returns in the Capital
Austin's businesses range from venture-funded software and semiconductor design companies to small studios, restaurants, consultancies and vendors that sell to state government. A start-up may have no revenue and a large loss, while a small consulting firm has steady profits and no employees. Both file a federal return and the Texas franchise tax report, with different choices to make. BOMCAS prepares those returns for Austin businesses remotely.
The Texas business tax page covers franchise tax methods and deadlines. This page applies them to Austin start-ups, software and creative firms.
Start-Ups and Venture Funding
Many Austin start-ups incorporate in Delaware as C corporations because investors prefer that structure, but they still register in Texas and file the franchise tax report here. Equity issued to employees, convertible notes, SAFEs and preferred share rounds all need to be recorded correctly, and the federal return must track net operating losses and credits from the earliest year. A company that changes ownership significantly in a funding round may have its old losses limited by Section 382, which is easier to track at the time than to reconstruct when it is finally profitable.
Research and Software Development
Federal law restored immediate deduction of domestic research and software development costs from 2025, ending the five-year amortisation required from 2022 through 2024. Qualifying small businesses can elect to apply the change retroactively to those years, and other taxpayers can accelerate the remaining deductions. Foreign research still has to be amortised over 15 years. The federal research credit remains available, and eligible small firms can elect to use it against payroll tax, useful for a pre-revenue company. Texas has also enhanced its own research credit for 2026.
SaaS and Digital Businesses
Software subscription companies have deferred revenue, stock compensation and costs of acquiring customers to consider. For franchise tax, many software businesses cannot claim cost of goods sold because they provide services, though some software sold as a product may qualify. Revenue from Texas customers is apportioned using the service sourcing rules, not just the billing address, so a review of where the work is performed matters.
Creative and Production Companies
Austin's film, music, game and design companies often work project by project, hire freelancers and buy equipment in bursts. Their returns involve contract income, royalty income, production costs and the treatment of equipment and rights. A band or production company that tours or shoots in other states can owe returns there as well.
State Vendors and Professional Firms
Consultants, lobbyists, engineering firms and suppliers selling to state agencies need to keep their Comptroller status current, because an entity that is not in good standing can be barred from state payments. Their franchise tax method is usually compensation or 70 percent of revenue. We review status before the annual report is due.
What We Review
- Capitalisation, equity awards and funding documents.
- Research cost elections and credits.
- Deferred revenue and stock compensation.
- Loss carryforwards and ownership changes.
- Franchise tax method and apportionment.
- Other state obligations.
Getting Started
Send the accounting file or trial balance, cap table and financing documents, research payroll and contractor details, fixed asset list and prior returns. We review them, send one list of questions and go through the drafts before filing.
Austin Business Tax Preparation Questions
Does a Delaware start-up in Austin file Texas franchise tax?
Yes, because it is doing business here, even if it has no revenue and no tax is due.
Can we deduct software development costs immediately?
Domestic development costs can again be deducted from 2025. Foreign costs remain subject to 15-year amortisation.
Can a pre-revenue start-up use the research credit?
Eligible small firms can elect to use part of the federal research credit against payroll tax.
Why track losses from the first year?
They can offset future income, but ownership changes in funding rounds may limit their use.
Talk to BOMCAS About Business Tax Preparation in Austin
A funding-ready return needs books that track research and revenue, payroll and equity reporting and correct tax on subscriptions. Founders report K-1s or share sales on personal returns, exits need advance planning, loss years never filed begin with catch-up work, and Canadian founders should read cross-border tax. The rest of our statewide coverage runs through personal filings, sales tax, bookkeeping, payroll services, planning ahead, back tax work and Canada–U.S. matters, with the Texas overview as a starting point.
Tell us what you are working on in Austin and BOMCAS will reply with the next steps and the records needed for a quote. Send a note from the contact page or the form below, call 780-667-5250 or write to info@bomcas.ca. The Austin overview covers every Austin service. This is general information, not advice for a particular taxpayer.