Texas
Business Brokers in Texas
Texas does one thing for a seller that no state in the Northeast can: it takes nothing from your gain. There is no state personal income tax, so the proceeds of your sale are taxed once, federally. On a seven figure sale that difference is frequently larger than the entire cost of running a professional process. What Texas does have is a Comptroller who can make your buyer personally liable for your unpaid state taxes, and that rule, not the price, is usually what sets your closing date.
Areas served in Texas
Austin · Houston · Dallas · Fort Worth · San Antonio · El Paso · Corpus Christi · The Woodlands
No state tax on the gain, and what that is actually worth
Texas levies no personal income tax. A seller in New Jersey or New York pays the federal rate on the gain and then several more points to the state on top. A Texas seller pays the federal rate and stops. Same business, same price, materially different money in the bank.
Two things decide whether you actually get that treatment, and neither is automatic. Where you are resident at the time of the sale, and how the business is held. An owner who moved to Texas recently, or who holds the company through an entity organised and taxed somewhere else, can find part of the gain still reaching back to the old state. Confirm your position with a CPA before you sign a letter of intent, not after.
Texas also does nothing to protect you from a bad allocation. The purchase price gets split across asset classes in the agreement, and the split drives your federal bill: goodwill is taxed as capital gain, equipment can trigger depreciation recapture at ordinary rates. Two deals at the same headline price can differ by six figures on the allocation alone. It is negotiable, and most sellers never negotiate it.
The trade for no income tax is property tax, which is among the highest in the country. If real estate is part of your transaction, the buyer is modelling that annual bill for the next ten years, and it will show up as a lower number on the property even when the business itself prices well.
Texas has no bulk sales act, and something that bites harder
Texas repealed its bulk sales article years ago. Sellers who have done a deal in New Jersey or New York hear that and assume the escrow problem goes away. It does not, it moved.
Under Texas tax law, a buyer purchasing a business is required to withhold enough of the purchase price to cover the seller's outstanding state taxes until the seller produces a certificate from the Comptroller confirming nothing is owed. A buyer who skips that step can be held personally liable for the seller's tax bill up to the amount of the purchase price. No competent buyer's attorney lets that happen, so the money sits in escrow until the certificate lands.
That makes the certificate a scheduling item, not a paperwork item. Request it at the letter of intent. Sellers who wait until the closing checklist discover the delay at the worst possible moment, when the buyer's financing commitment has an expiry date on it.
What stalls the certificate is almost never money owed. It is a filing that was never made: one unfiled franchise tax report, one missing sales tax return, sometimes a zero return for a quarter with no activity. The Comptroller will not certify a taxpayer who is not current. Get every filing current before you go to market, while the delay costs you nothing.
Franchise tax standing, and the filing buyers check first
Texas charges a franchise tax on most business entities, and many owner-operated businesses fall under the revenue threshold where no tax is actually due. That threshold moves, so confirm the current figure, but the important part is that owing nothing does not excuse you from filing. The report is still required.
Miss enough of them and the state forfeits the entity's right to transact business. A forfeited charter is not a small problem at closing: the company cannot convey what it is selling, the lender will not fund, and reinstatement runs on the state's calendar rather than yours. This is discoverable in a public lookup, which means the buyer's attorney will find it in the first week of diligence.
Pull your own Certificate of Account Status before you list. It takes minutes and it is the same document the other side will pull. If it does not come back active, that is your first job and it has nothing to do with selling.
Sales tax deserves its own look, because Texas taxes a wider set of services than owners expect, including data processing, security services and certain repair and remodelling work. An owner who has been selling a taxable service line for six years without collecting on it is carrying an exposure that a buyer will find, quantify, and take out of the price with interest.
Licences, and the one that kills Texas trade deals
Anything holding a liquor licence runs on the state alcohol regulator's timeline for a change of ownership, and that timeline belongs in the deal calendar from the letter of intent rather than the closing checklist.
If real property or a lease assignment forms part of the transaction, Texas real estate licensing comes into the picture. Ask any broker you interview what licence they hold and exactly how the real property side is handled. It is a fair question and the answer should be immediate.
Here is the one that actually kills deals. In the licensed trades, electrical, air conditioning and refrigeration, plumbing, the licence that lets the company work is attached to a qualified individual, and in most owner-operated businesses that individual is you. It does not transfer with the assets. The day after closing, a buyer without a qualifying licence holder owns a company that cannot legally perform its own work.
There are three fixes and all of them take time: the buyer holds the licence themselves, the buyer hires or retains the person who does, or you stay on as the qualifying individual through a defined transition. Decide which one before you go to market. Discovering it during diligence hands the buyer a reason to retrade the price, and they will use it.
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