State Tax Compliance
State-level notices, penalties, and compliance education for Texas, California, and Florida. Educational content only — not tax or legal advice.
Texas Franchise Tax Issues
Texas imposes an annual franchise tax on most entities doing business in Texas. The tax is based on margin (revenue minus costs) and is due May 15 each year.
Entities that fail to file or pay franchise tax may lose their right to transact business in Texas (forfeiture). Forfeiture can result in personal liability for owners and loss of limited liability protections.
Texas also assesses late filing penalties (5–10%) and interest on unpaid franchise tax balances.
Key Takeaways
Texas Sales Tax Notices
The Texas Comptroller issues sales tax deficiency notices, audit assessments, and compliance letters to businesses that have underreported or failed to collect Texas sales tax.
Texas has economic nexus rules — businesses with more than $500,000 in Texas sales must collect and remit Texas sales tax even without a physical presence.
Responding to Comptroller notices promptly and with documentation is essential to avoid escalation.
Key Takeaways
California FTB Notices
The California Franchise Tax Board (FTB) issues various notices related to income tax, including demand notices, proposed assessments, and collection letters.
California has one of the most active state tax agencies in the country and aggressively pursues non-filers and businesses with nexus in California.
All California FTB notices have response deadlines. Missing a deadline can result in the FTB finalizing an assessment without your input.
Key Takeaways
California Sales Tax Compliance
California's California Department of Tax and Fee Administration (CDTFA) oversees sales and use tax. California has economic nexus for businesses with $500,000+ in California sales.
CDTFA audit periods typically cover 3 years, and auditors have access to third-party data including bank records and marketplace data.
Voluntary disclosure programs are available for businesses with unfiled California sales tax obligations.
Key Takeaways
Florida Sales Tax Compliance
Florida's Department of Revenue administers sales and use tax with a state rate of 6% plus local surtaxes. Florida has economic nexus rules for remote sellers with more than $100,000 in Florida sales.
Florida conducts active sales tax audits, particularly in service industries, construction, and e-commerce. Audit periods typically cover 3 years.
Florida voluntary disclosure allows businesses to come forward and pay back taxes with reduced penalties.
Key Takeaways
Florida Annual Report & Compliance
Florida businesses must file annual reports with the Florida Division of Corporations. Failure to file by May 1 results in a late fee, and failure to file by the third Friday in September results in administrative dissolution.
Reinstating a dissolved entity requires paying back fees and filing all outstanding annual reports. During dissolution, business owners may lose limited liability protections.
Florida does not have a franchise tax but enforces corporate income tax on C-corps and certain other entities.
Key Takeaways
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Frequently Asked Questions
Can a state tax agency collect in another state?
Yes. States can pursue collection through reciprocal agreements, federal offset programs, and by obtaining judgments that can be enforced in other states.
What is voluntary disclosure and how does it work?
Voluntary disclosure programs allow businesses to proactively come forward about unfiled state tax obligations in exchange for reduced penalties and a limited look-back period. Terms vary by state.
Related Resources
Educational content only. Not tax or legal advice.