TL;DR

Texas does not require a general state business license, but most online businesses still need local permits and a sales tax permit from the Texas Comptroller.
Forming an LLC in Texas costs $300 to file with the Secretary of State.
Texas has no state income tax, making it one of the best states to run an online business.
Austin entrepreneurs have access to local resources, co-working spaces, and small business programs.
License Me offers online courses to help you understand business licensing, structure, and growth strategy before you launch.

Introduction

Texas is one of the most business-friendly states in the country, and if you are wondering how to start an online business in Texas, you are already asking the right question. Whether you are launching a side hustle from your Austin apartment or building a full-scale ecommerce brand, Texas makes it surprisingly accessible — as long as you know the rules.

The good news is there is no single all-encompassing business license at the state level. The not-so-obvious news is that depending on what you sell and where you operate, there are still several steps you need to take before your first sale. This guide walks you through all of them, Texas-style.

entrepreneur starting an online business in Austin Texas

Texas Requirements and Rules

Texas does not issue a single general business license, but that does not mean you can skip the paperwork. Here is what most online business owners in Texas actually need.

Business Structure Registration

If you are operating as anything other than a sole proprietor using your legal name, you need to register your business. Sole proprietors using a trade name must file an Assumed Name Certificate (DBA) with their county clerk — in Austin, that is the Travis County Clerk. LLCs and corporations register through the Texas Secretary of State.

Sales Tax Permit

If you sell taxable goods or services online to customers in Texas, you are required to collect and remit sales tax. You need to register for a Sales and Use Tax Permit through the Texas Comptroller's office. The permit itself is free, but collecting and filing correctly is non-negotiable.

Industry-Specific Licenses

Some online businesses require additional licenses depending on what they do. Real estate, insurance, cosmetology education, financial advising, and healthcare-adjacent services all have their own regulatory bodies in Texas. Check the Texas Department of Licensing and Regulation to see if your field requires a specific credential.

texas business license requirements checklist for online entrepreneurs

Austin-Specific Permits

If you are based in Austin, the City of Austin requires a Home Occupation Permit if you are running a business from a residential address. You can apply through the Austin Development Services Department. It is a straightforward process but easy to overlook.

How Much It Costs in Texas

Starting an online business in Texas is relatively affordable compared to many other states. Here is a realistic breakdown of what to budget.

LLC Filing Fee: $300 (one-time, filed with Texas Secretary of State)
DBA / Assumed Name Filing: Approximately $15-$25 at the county level
Sales Tax Permit: Free
Registered Agent: $50-$150 per year if you use a service
Home Occupation Permit (Austin): Varies by project type, typically under $200
Business Bank Account: Many Texas banks offer free business checking accounts for new LLCs
Online Courses and Training: Platforms like License Me offer affordable courses to help you launch the right way

Texas has no state income tax, which is one of the biggest financial advantages for online business owners. That alone can save you thousands compared to running a business in states like California or New York.

Step-by-Step Process in Texas

Ready to get moving? Here is how to start an online business in Texas from scratch, in the right order.

step by step process to start an online business in Texas

Step 1 — Choose Your Business Structure

Decide whether you will operate as a sole proprietor, LLC, or corporation. Most online entrepreneurs in Texas choose an LLC for the liability protection and tax flexibility. If you want to understand the differences before committing, check out our guide to choosing a business structure.

Step 2 — Register Your Business

File your LLC Certificate of Formation through the Texas Secretary of State online portal. Sole proprietors using a trade name file their DBA with Travis County if they are in Austin. Keep copies of everything.

Step 3 — Get Your EIN

Apply for a free Employer Identification Number through the IRS. You will need this to open a business bank account, hire employees, and file taxes. It takes about 10 minutes online.

Step 4 — Register for Sales Tax

Head to the Texas Comptroller's website and register for your Sales and Use Tax Permit. You can do this entirely online. Once approved, you will collect sales tax from Texas customers and file returns on a schedule the Comptroller assigns you.

Step 5 — Get Any Industry Licenses

If your online business touches a regulated field, get licensed before you start selling. License Me has courses designed to help professionals understand professional licensing requirements so you do not skip anything important.

Step 6 — Set Up Your Online Presence

Register your domain, build your website, and set up payment processing. Make sure your site includes a privacy policy and terms of service — these matter legally, especially if you are collecting customer data.

Step 7 — Open a Business Bank Account

Keep your personal and business finances completely separate from day one. This protects your LLC status and makes tax time much less stressful.

Where to Learn in Texas

Austin has a strong small business ecosystem. The UT Austin Small Business Development Center offers free consulting and workshops for new entrepreneurs. SCORE Austin also provides free mentoring from experienced business owners.

For online learning that fits your schedule, License Me offers courses specifically designed for aspiring entrepreneurs who want to understand business licensing, legal structure, and growth strategy. You can learn at your own pace without sitting in a classroom.

online learning platform for Texas entrepreneurs starting a business

If you want to go deeper into building revenue after launch, our related post on how to grow your online business covers scaling strategies that work for Texas-based entrepreneurs. And if you are thinking about ecommerce specifically, our ecommerce business guide breaks down platforms, taxes, and fulfillment options in plain language.

For a broader overview of entrepreneurship fundamentals, visit our pillar guide on how to start a business, which covers the foundational steps every new owner should know.

You can also explore our Texas Business Compliance course and our Ecommerce Licensing course for more targeted training.

Frequently Asked Questions

Do I need a business license to sell online in Texas?

Texas does not have a general state business license, but you will likely still need a Sales and Use Tax Permit from the Texas Comptroller if you sell taxable products or services. Depending on your industry, you may also need a professional license from the Texas Department of Licensing and Regulation. And if you are in Austin, a Home Occupation Permit may apply if you work from home.

How much does it cost to start an LLC in Texas for an online business?

Filing an LLC in Texas costs $300 for the Certificate of Formation submitted to the Texas Secretary of State. Additional costs include a registered agent fee if you use a service, a county-level DBA filing if needed, and any industry-specific licensing fees. Overall, most Texas online business owners can get fully set up for under $600, making it one of the more affordable states to launch in.

Does Texas have a state income tax for online business owners?

No, Texas has no state income tax, which is a significant advantage for online business owners and self-employed entrepreneurs. You will still owe federal income taxes and may be subject to the Texas franchise tax if your business revenue exceeds a certain threshold. The Texas Comptroller's office publishes current franchise tax thresholds and rates, so check their site to know exactly where you stand.

Starting an online business in Texas does not have to be overwhelming. With the right structure, the right permits, and the right education, you can launch with confidence. Enroll Now in License Me's online business courses and get the knowledge you need to build something real in the Lone Star State.