Tax Requirements
Understanding your tax obligations is crucial for business success. This comprehensive guide covers federal, state, and local tax requirements for El Paso businesses.
Essential Tax Obligations
Texas Sales and Use Tax
Required for businesses selling tangible goods or taxable services in Texas
Application Process
- Register online through Texas Comptroller's Webfile system
- Provide business information and ownership details
- Specify business activities and estimated monthly sales
- Receive your Texas Taxpayer Number within 2-3 business days
Tax Rates
- State sales tax rate: 6.25%
- El Paso local sales tax: 2.00%
- Combined rate: 8.25%
- Special districts may have additional rates
Filing Schedule
- Monthly: For businesses with tax liability over $1,500/month
- Quarterly: For businesses with tax liability under $1,500/month
- Annual: For businesses with tax liability under $1,000/year
- Due on the 20th of the month following the reporting period
Federal Tax Obligations
Federal taxes required by the IRS for all business entities
Income Tax
- Sole Proprietorship: Report on Schedule C of personal tax return
- Partnership: File Form 1065, partners receive K-1
- Corporation: File Form 1120 (C-Corp) or 1120-S (S-Corp)
- LLC: Taxed as sole proprietor, partnership, or corporation
Employment Taxes
- Federal Income Tax Withholding from employee wages
- Social Security and Medicare taxes (FICA)
- Federal Unemployment Tax (FUTA)
- File Form 941 quarterly for employment taxes
Self-Employment Tax
- Applies to sole proprietors and partners
- Covers Social Security and Medicare contributions
- Current rate: 15.3% on net earnings
- Pay quarterly estimated taxes using Form 1040-ES
Local Property Taxes
Property taxes for business real estate and personal property in El Paso
Property Tax Rates
- El Paso County: Approximately 2.5% of assessed value
- City of El Paso: Additional municipal rate
- School districts: Varies by location
- Total effective rate typically 2.8-3.2%
Assessment Process
- El Paso Central Appraisal District (EPCAD) assesses property values
- Business personal property must be rendered annually
- Rendition deadline: April 15th each year
- Property owners can protest assessed values
Payment Schedule
- Tax bills mailed in October
- Payment due by January 31st
- Penalty and interest apply after due date
- Installment payment plans available for qualifying businesses
Industry-Specific Tax Requirements
Different industries have unique tax obligations beyond the standard requirements.
Restaurants & Food Service
- Mixed Beverage Tax (if serving alcohol)
- Food and Beverage Tax reporting
- Tip reporting requirements
- Health permit fees
Retail Businesses
- Sales tax permit required
- Inventory tax considerations
- Use tax on out-of-state purchases
- Resale certificate management
Professional Services
- Franchise tax (if applicable)
- Professional license fees
- No sales tax on most services
- Quarterly estimated tax payments
Manufacturing
- Sales tax exemption on manufacturing equipment
- Inventory tax exemptions available
- Environmental compliance fees
- Special depreciation schedules
Construction
- Contractor license fees
- Sales tax on materials
- Workers compensation insurance
- Surety bond requirements
Healthcare
- Professional license renewal fees
- Medical waste disposal fees
- HIPAA compliance costs
- Malpractice insurance premiums
Important Tax Deadlines
Mark these critical dates on your calendar to avoid penalties and interest.
Property tax payment due
Annual sales tax return (if applicable)
S-Corp and Partnership tax returns due
Business personal property rendition due
C-Corp tax returns due
Q1 estimated tax payment
Q2 estimated tax payment
Q3 estimated tax payment
S-Corp extension deadline
Year-end tax planning deadline
Tax Incentives & Credits
Take advantage of these programs to reduce your tax burden and support business growth.
Foreign Trade Zone Benefits
El Paso's Foreign Trade Zone #68 offers duty deferral and reduction opportunities for international businesses.
- Duty elimination on re-exports
- Duty deferral on imports
- Inverted tariff relief
- Streamlined customs procedures
Texas Enterprise Zone Program
State sales and use tax refunds for businesses creating jobs in designated enterprise zones.
- Refund on qualified expenditures
- Job creation incentives
- Capital investment credits
- Up to $2,500 per job created
Research & Development Tax Credit
Federal and state credits for qualified research and development activities.
- Federal credit up to 20% of qualified expenses
- Texas franchise tax credit available
- Carryforward provisions
- Applies to various industries
Work Opportunity Tax Credit
Federal tax credit for hiring individuals from targeted groups facing employment barriers.
- Credit up to $9,600 per eligible employee
- Applies to veterans, ex-felons, and others
- Reduces federal income tax liability
- No limit on number of hires
Tax Resources & Contacts
Connect with these organizations for tax assistance and information.
Texas Comptroller of Public Accounts
State tax registration, filing, and information
IRS Small Business & Self-Employed
Federal tax information and resources
El Paso Central Appraisal District
Property tax assessments and information
SCORE El Paso
Free tax planning and business counseling
Need Help with Tax Planning?
Our team can connect you with tax professionals and resources to ensure your business stays compliant and maximizes available benefits.
Contact Us TodayRelated Resources
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Business Registration
Register your business and obtain your EIN before setting up tax accounts.
Tax Registration Guide
Step-by-step instructions for registering with federal, state, and local tax authorities.
Financial Projections Guide
Plan for tax obligations with accurate financial forecasting and budgeting.