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Thanks for your question! Texas and Delaware have separate tax frameworks so this response will provide general details on tax liabilities for limited liability corporations and then analyze each state’s tax structure separately.Limited Liability Corporations (LLCs) are not taxed on their profits directly. Instead, profits “pass through” the business and the LLCs members report the profits on their personal federal and state tax returns (if the state has a personal income tax). Assuming your business is not automatically classified as a corporation, the IRS will either treat your firm as a sole proprietorship if your LLC has one owner or a partnership if the LLC has more than one owner. If your LLC is a sole proprietorship, you will report its profits or losses on your personal income tax return. If your LLC is a partnership, you and your partners will report its profits or losses in proportion to your ownership shares in the firm.Delaware LLCs are classified as partnerships for state income tax purposes and must pay a franchise tax and registered agent tax. There is no sales tax on goods or services. And you will not pay state business income tax unless your firm does business in Delaware. If you provide more information, I can advise you on special taxes that you may have to pay should you incorporate within the state.On the other hand, limited liability corporations registered in Texas generally only have to pay franchise, property, and sales taxes. Texas does not have a personal income tax. Texas does, however, impose special taxes on firms operating in certain sectors. Here is an organized list that should help you assess whether your tax liability in the state would be too onerous:Automotive Businesseso Oil manufacturers, distributors, and importers that sell motor oil to the publico Firms that sell, store, or consume new or used lead-acid batterieso Purchase boats in Texas or import boats from another stateo Businesses that sell, lease, purchase or rent heavy duty diesel equipmento Companies that rent, sell, or purchase motor vehiclesPetroleum Productso Firms that manufacture, produce, or import cement into Texas and distribute or sell the cement in the stateo Companies that own control, or furnish the tools, instruments, equipment, or chemical, electrical, or mechanical process used in providing natural gas or crude oilo Businesses that purchase crude oil or supply / transfer gasoline and diesel fuelo Companies that produce natural gas or sell and deliver the gas into a vehicle’s supply tankEntertainment and Hospitality Businesseso Casinos and horse racetrackso Companies that sell alcohol, cigars, tobacco, cigarettes or provide sexually-oriented serviceso Stores that harvest, purchase, handle, or store oysterso Hotels, bed and breakfasts, condominiums, apartments, and houses that rent rooms at a rate higher than $15 a dayFinancial Institutions, Public Utilities, and Insurance Companieso Banks that charge an administrative fee for personal property loans and secondary mortgage loanso Utility companies that do business within an incorporated city with a population greater than 1,000o Foreign and alien insurers licensed to conduct business in Texaso Car, home, fire, and farm insurance companieso Insurance firms and HMOs licensed by the state of TexasNeed assistance with forming your company? LawTrades provides free initial consultation, affordable, transparent flat-fee pricing, flexible payment options, and start to finish project management. We've helped over 1000 startups and entrepreneurs.

Thanks for your question! Texas and Delaware have separate tax frameworks so this response will provide general details on tax liabilities for limited liability corporations and then analyze each state’s tax structure separately.Limited Liability Corporations (LLCs) are not taxed on their profits directly. Instead, profits “pass through” the business and the LLCs members report the profits on their personal federal and state tax returns (if the state has a personal income tax). Assuming your business is not automatically classified as a corporation for tax purposes (it is important to note that corporations are not LLCs), the IRS will either treat your firm as a sole proprietorship if your LLC has one owner or a partnership if the LLC has more than one owner. If your LLC is a sole proprietorship, you will report its profits or losses on your personal income tax return. If your LLC is a partnership, you and your partners will report its profits or losses in proportion to your ownership shares in the firm.Delaware LLCs are classified as partnerships for state income tax purposes and must pay a minimum $ 50 franchise tax (which may be higher depending on whether your company has stock), a registered agent tax, and hire out an agent to receive legal documents and notices directed to the company. There is no sales tax on goods or services. And you will not pay state business income tax unless your firm does business in Delaware. Also, you will be forced to pay the state more if your firm plans on distributing stock to shareholders. If you are planning on distributing stock, it is in your best interest to set the par value as low as possible. The minimum filing fee is $89. If you want expedited filing, though, the following options are available:· One-hour filing fee is $1,000.· Two-hour filing fee is $500.· Same-day filing fee is $100.· 24-hour filing fee is $50.If you provide more information, I can advise you on special taxes that you may have to pay should you form an LLC within the state.On the other hand, limited liability corporations registered in Texas generally only have to pay franchise, property, and sales taxes. To form a corporation in Texas, you will have to pay a $300 filing fee and a 1% annual franchise tax if the firm’s income is over $150,000.Texas does not have a personal income tax. Texas does, however, impose special taxes on firms operating in certain sectors. Here is an organized list that should help you assess whether your tax liability in the state would be too onerous:Speaking broadly, Texas imposes special taxes on businesses serving the automotive industry, oil companies, entertainment and hospitality businesses, and financial institutions, public utility companies, and insurance firms.If there is something that this response did not cover that you would like answered, please message me or direct another question to my attention. I hope this helps.Need assistance forming your LLC? LawTrades provides start to finish project management and can help you choose between forming an LLC in Texas or Delaware.

Absolutely. We would like to emulate the United States of America prior to our progressive presidents, or, more specifically, prior to ratification of the 16th Amendment in 1913.A graduated income tax is plank number two of Marx's Communist Manifesto of 1848. Das Kapital was first released in 1867, and the German Social Democrats (SPD) came along in 1873 with an agenda of hybridizing communism with free enterprise, making ol' Karl spitting mad.The interplay of the SPD with Chancellor Bismarck in Prussia during the following years represented new ideas of social organization and statecraft being implemented for the first time. It captivated world attention. Soon our intellectual pragmatist movement wished to be social democrats as well, and this spawned progressivism in the US, despite the fact that our founding in Enlightenment liberalism had been a high-water mark for mankind--citizens sovereign with inalienable rights and the government responsive to them. In fact, progressivism is not liberal at all but anti-liberal, a regression to the "kingcraft" we had fought the War of Independence to overthrow--government sovereign with subjects having privileges and duties according to the dictates of political elites.Meanwhile, Lincoln, in a monumental hypocrisy as he opposed "kingcraft" of all kinds, implemented an income tax on the wealthy to help finance the Civil War. It was cancelled in 1872. In 1894, Congress, under Grover Cleveland, passed an income tax on the top two percent of earners. The Supreme Court soon overturned it as a travesty of a large bloc voting itself the wealth of a small bloc. Justice Field, by then a thirty-year veteran of the court prophesied that a small progressive tax, "will be but the stepping stone to others, larger and more sweeping, till our political contests will become a war of the poor against the rich."The progressive presidents, first Teddy Roosevelt, then Howard Taft, set about making the graduated income tax constitutional. The 16th Amendment was proposed under Taft in 1909 and won ratification under our third progressive president, Woodrow Wilson, overturning our constitutional ideas of uniform taxation and equality under the law for all citizens.Our first federal income tax applied only to individuals making $3000 a year and couples making $4000 (or more than 80,000 in current dollars). It's top rate was 7 percent, and no small amount of the support for the tax came because it was "sticking it to the rich." Only, the very next progressive initiative down the pike was Prohibition, offered for ratification in 1917. Because excises on alcohol represented a major source of revenue for the federal government, the income tax was turned to to take up the slack from passage of the 18th Amendment.With these transgressions (along with disgust at the white supremacy and eugenics of progressives), the string of progressive presidents was broken with the election of Warren Harding, followed after his death in office by Calvin Coolidge. Coolidge's Secretary of Commerce, the much ridiculed by Coolidge Herbert Hoover, a progressive, won the ensuing election in 1928. Hoover used the depression as a pretext to ratchet the top income tax rate up from 24 percent to 63 percent. His successor, Franklin Roosevelt, another progressive, raised it from there to 79 and then 90 percent. In 1941, Roosevelt proposed a rate of 99.5 percent on income over $100,000. When an advisor asked how he could possibly propose that, FDR coolly answered, "Why not?"But 7 percent to 90 percent in a couple of generations is not the gravest reason to oppose such taxation. Senator Hiram Johnson of California, a Roosevelt supporter, told of his utter amazement in the 1936 election as FDR brazenly mobilized government agencies to dole out subsidies in return for votes. "He starts out with probably eight-million votes bought," calculated Johnson, "The other side has to buy them one-by-one and cannot hope to match his money." ["His money" referring actually to our money.] Roosevelt defeated Alf Landon by 523 electoral votes to 8.Michigan Senator James Couzens had bragged to Roosevelt before the election, "Give me control of the Bureau of the Internal Revenue and I will run the politics of the country." Sure enough, in the wake of the '36 election, Roosevelt's staunchest opponents, such as Huey Long, William Randolph Hearst and Moses Annenberg, received detailed tax audits and, in some cases prison time. When Nixon (another progressive) was being investigated for political abuse of the IRS, Roosevelt's own son, Elliot, conceded that his father "may have been the originator of the concept of employing the IRS as a weapon of political retribution."So, yes, the good old days of the United States, before we allowed the political class a club to beat us with.