Starting a service business in Texas

Form your business in Texas

A Texas LLC is created by filing a Certificate of Formation for a Limited Liability Company (Form 205) with the Secretary of State, online through SOSDirect or by mail to the office in Austin. The filing fee is $300, as printed on Form 205 in October 2026. Your LLC name must include "limited liability company," "limited company" or an abbreviation of one of them, and you must name a registered agent and registered office in Texas.

Ongoing state filings

The yearly filing that keeps a Texas LLC in good standing goes to the Comptroller: the franchise tax report is due May 15. For 2026 and 2027 reports, the Comptroller lists a no tax due threshold of $2,650,000 in annualized revenue. Starting with 2024 reports, the Comptroller says an entity at or below that threshold files its Public Information Report or Ownership Information Report instead of a no tax due report. Skip it and the Comptroller can forfeit your LLC's right to do business in Texas.

Using a business name (DBA)

If your LLC operates under any other name, file an Assumed Name Certificate (Form 503) with the Secretary of State. The fee is $25, as printed on Form 503 in October 2026, and the default period is 10 years from filing. A sole proprietor files the assumed name certificate with the county clerk in each county where the business keeps premises, or where it works if it has no premises, under Business and Commerce Code section 71.054.

Not sure whether you need an LLC at all? Read LLC vs sole proprietor for contractors, then get your free EIN from the IRS.

Licensing for service trades

Texas licenses specific trades rather than general contractors. The Texas Department of Licensing and Regulation (TDLR) says anyone who performs non-exempt electrical work must be licensed and work through a licensed electrical contractor, and it licenses contractors who install, repair or maintain air conditioning, refrigeration or heating systems, with a licensed contractor required at each permanent business location. Plumbers are licensed by the Texas State Board of Plumbing Examiners. The Texas Department of Agriculture licenses structural pest control applicators who apply pesticides in and around structures, and its agricultural pesticide program covers applicators who treat lawns and ornamentals, which matters for any lawn company that sprays weeds or insects. Roofing, remodeling, painting, cleaning and handyman work are not on these agencies' lists, but Texas cities set their own registration and permit rules, so check with the building department in each city you serve.

• Texas Department of Licensing and Regulation: Electricians: Electrical contractors, master, journeyman and apprentice electricians
• Texas Department of Licensing and Regulation: Air conditioning and refrigeration: ACR contractor licenses and technician registration and certification
• Texas State Board of Plumbing Examiners: Master, journeyman and tradesman plumbers, plumbing inspectors and apprentices
• Texas Department of Agriculture: Pesticide programs: Structural pest control and lawn and ornamental pesticide applicators

Workers' compensation

The Texas Department of Insurance says private employers in Texas can choose to carry workers' compensation, and that it is not required in most cases. Employers who go without it are called nonsubscribers, and they have duties. TDI says a nonsubscriber should file a notice of no coverage with its Division of Workers' Compensation between February 1 and April 30 each year, after hiring its first employee, and after ending a Texas workers' comp policy. Nonsubscribers must also post a notice of no coverage in English and Spanish where employees see it regularly and give written notice to each new hire. One exception catches contractors: under Texas Labor Code section 406.096, a government entity that signs a building or construction contract must require the contractor to certify that it covers every employee on the public project.

More on coverage: business insurance for contractors.

Sales tax on services

The Texas Comptroller treats many home services as taxable, and it says so trade by trade. Landscaping and lawn care, including mowing, trimming, edging, planting, pruning and fertilizing, is taxable at the state rate plus local tax on the total charge. Maid, janitorial and custodial service is taxable, including cleaning homes, washing windows and cleaning chimneys or air ducts. Pressure washing buildings, sidewalks and parking lots is taxable as building or grounds cleaning, and swimming pool maintenance is taxable on residential and commercial property alike. Repair, remodeling and restoration of nonresidential buildings is taxable too. There is one exemption that fits a new solo operator: lawn care by a self-employed person with no employees or helpers and no more than $5,000 in receipts from the service over the last four calendar quarters is not taxable; once you pass $5,000, you start collecting the next quarter. Apply for a sales tax permit with the Comptroller before your first taxable job.

Recording business calls in Texas

Texas follows one-party consent. Texas Penal Code section 16.02(c)(4) is a defense to the interception offense when the person recording is a party to the call or one party gave prior consent, unless the recording is made to commit an unlawful act. You can record calls you are on; many Texas contractors take calls from out of state, so add a short recording notice. Our guide to recording business calls covers how.

See our guide to recording business calls before you turn on call recording or an AI receptionist.

How the seasons shape the work

Texas is big enough to hold several climates. Long, hot summers stretch the lawn, pool and HVAC seasons across most of the state, and air conditioning work peaks during summer heat waves. Spring hail in North Texas and the Panhandle drives roofing, gutter and window work, while the Gulf Coast plans around hurricane season from June through November, with storm cleanup, tree and water damage calls after landfall. Hard freezes are rare but serious when they come, as burst-pipe calls after winter storms have shown.

Separate taxable and nontaxable charges on every invoice

The Comptroller says that if you mix a nontaxable service with a taxable one and do not state them separately, the whole charge is presumed taxable when the taxable part is more than 5%. A landscape designer's planning fee, for example, is not taxable, but it must be broken out from the taxable planting work. Set up your quote and invoice templates with separate lines from day one.

Then set up the back end that gets you hired

The paperwork makes you legal. Customers still have to find you, reach you and pay you. Before your first job, set up a business phone number, email on your own domain, a Google Business Profile, a simple website, and a way to send quotes and take card payments. The launch checklist lays out the order.

Texas questions