Do I need to make a state S-corporation election in Texas?

No. There is nothing to elect into. Texas has no corporate income tax, so there is no state S-corporation election, recognition, or income-tax return. Your federal S election still governs your federal return.

Texas S-Corporation Election

By Edmond Hui · Facts verified July 29, 2026 against primary state sources

There is no Texas S-corporation election, because there is nothing to elect into: Texas has no corporate income tax. Your federal S election still governs your federal return, and it changes nothing at the state level here.

S corporation facts for Texas: the state has no corporate income tax, so there is no state S election to make. Incorporating costs $300 to file. The annual report fee is $0. — Texas has no corporate income tax, so there is no state S election to make; IRS Form 2553 governs the federal return only. Source: MyStateLLC 50-state S-corp election dataset, compiled from state filing offices and revenue departments, July 2026; any figure we could not confirm is labeled on the page.

State treatmentNo state election exists

Separate state formNot required

State corporate income taxNone

Does Texas recognize the federal S election?

State treatment of the S election

Follows the federal election	Not applicable, no corporate income tax
Separate state election form	None required

Texas is one of 5 states with no corporate income tax where the state S election simply does not exist. That is not the same as the state rejecting the election. There is no state income tax for it to apply to. Your federal S election is unaffected.

What an S corporation still owes Texas

Texas has no personal or corporate income tax, so there is no state-level S-corporation election or income-tax recognition. A federal S election does NOT exempt an entity from the Texas franchise (margin) tax. S corporations are taxable entities. They file the same Public Information Report as any other corporation, and the same franchise tax report when annualized total revenue is above the no-tax-due threshold.

Franchise or gross-receipts tax

Texas imposes a franchise (margin) tax on taxable entities in lieu of a corporate income tax. No-tax-due threshold, measured on annualized total revenue: $2,470,000 for report years 2024 and 2025 and $2,650,000 for report years 2026 and 2027 (a corporation at or below the threshold owes no tax but must still file a Public Information Report). Rates: 0.375% for entities primarily engaged in retail or wholesale trade, 0.75% for all other taxable entities; the optional EZ computation rate is 0.331% (available up to $20M annualized revenue). The franchise tax applies regardless of a federal S-corporation election.

Texas corporation vs Texas LLC

State filing charges only. Corporate income tax and franchise tax are excluded because both depend on income or net worth, so no flat figure exists for either entity.

	Corporation	LLC
Formation filing fee	$300	$300
Report cadence	Every year	Every year
Report fee	$0	$0
Entity-level tax on the LLC side	N/A	Franchise Tax

Both entities cost $300 to file in Texas, so the filing fee is not a reason to pick one over the other.

Full Texas LLC cost breakdown · LLC vs C-corp explained · LLC vs S-corp explained

How Texas compares

State treatment of the federal S election	States
Follows the federal election, no state form needed	42
No corporate income tax, so no state election exists	5
Has a corporate income tax and does not follow the election. The corporation is taxed like a C corporation	2
Follow the election but still impose some entity-level tax on the S corporation, California, Illinois, New York, Massachusetts and Delaware among them	N/A
Require a separate state election form as well	1

Compare all 50 states · LLC vs S-corp · S-corp salary and savings calculator

Frequently Asked Questions

: No. There is nothing to elect into. Texas has no corporate income tax, so there is no state S-corporation election, recognition, or income-tax return. Your federal S election still governs your federal return.
: Texas has no personal or corporate income tax, so there is no state-level S-corporation election or income-tax recognition. A federal S election does NOT exempt an entity from the Texas franchise (margin) tax. S corporations are taxable entities. They file the same Public Information Report as any other corporation, and the same franchise tax report when annualized total revenue is above the no-tax-due threshold.

Where these numbers come from

This page covers how Texas treats the federal S-corporation election and what an S corporation still owes the state. Every figure was checked against Texas's own published sources on July 29, 2026, the state business filing agency's fee schedule, the governing statute, and where a state tax applies, the state Department of Revenue. Commercial formation-service pages were used as leads only and are never cited. Anything the review could not confirm from an official source is left blank on this page rather than filled with an estimate.

Corporate income tax and franchise tax are quoted as the state publishes them, as rate schedules and thresholds, and are excluded from every dollar total here. They depend on income or net worth, so there is no flat figure that would be true for every corporation.

Primary sources:

This guide is general information, not legal or tax advice, and reading it does not create an attorney-client relationship. It describes rules that can differ from state to state, and fees, rates, forms and deadlines can change after we review them. It cannot tell you what applies to your own business: that turns on where the business is formed, where it operates and how it is taxed. Confirm anything you rely on with the state or federal agency concerned, or with a licensed attorney or CPA, before you act on it.

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Edmond Hui · Founder, MyStateLLC

Edmond Hui is a software engineer and serial entrepreneur based in New York who has founded multiple online businesses across e-commerce, media, and information publishing. Before transitioning into tech, he spent years as a commercial real estate professional closing deals totaling over 100,000 square feet, giving him firsthand experience with business formation and entity structuring. He built MyStateLLC to provide the free, state-specific LLC guidance he wished existed when forming his own companies.

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