LLC in Texas

I have a LLC registered in Wyoming, but it owns my properties in Texas. The properties were transferred this year, so I haven't filed any taxes there yet.
You may find some info here
http://www.window.state.tx.us/taxinfo/franchise/franfaq.html

Edited: 06/26/2010 at 10:40AM by Eddie Ziv

Uwe S.

Real Estate Investor · Chemnitz, Saxonia

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Nov 30 '09, 02:34 AM

Eddie,

Can a LLC in Wyoming hold income producing properties in other states without registering as foreign company in these states?

-Uwe

Edited: 06/26/2010 at 10:41AM

Eddie Ziv

Real Estate Investor · Studio City, California

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Nov 30 '09, 02:42 AM

Originally posted by Uwe Siegert

Eddie,

Can a LLC in Wyoming hold income producing properties in other states without registering as foreign company in these states?

-Uwe

Good question Uwe. I'm not really sure. LLC is not a corporation, by definition. LLC stands for Limited Liability Company. From tax perspective it is a pass-through entity. I will let you know at tax time... :)

Edited: 06/26/2010 at 10:41AM by Eddie Ziv

Brittany L.

Real Estate Investor · Austin, Texas

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Dec 03 '09, 10:30 AM

The law in texas is that foreign entities transacting business in texas must register in state. However, what constitues transacting is not technically defined, the state instead chose to define some of what is not considered transacting business. However, the criteria for triggering the franchise tax is lower so that more businesses are subject to it. (Texas wants it's share of your pie!)

Here is the exact wording from our SOS page:

Transacting Business in Texas: A foreign entity that is transacting business in Texas must file an application for registration with the Texas Secretary of State. Whether an activity constitutes "transacting business" in Texas is often difficult to answer. Texas statutes do not define "transacting business;" however, Texas Business Organizations Code (BOC) Â§ 9.251 lists activities that are not considered transacting business. Case law and Attorney General Opinions are useful in determining whether or not an entity is "transacting business" in Texas. The secretary of state cannot issue opinions on whether an entity is transacting business in Texas or needs to file an application for registration.

The level of a foreign entity's activity in Texas that subjects it to franchise taxes is lower than the level of activity that subjects it to registration requirements. An entity that is doing business in Texas for purposes of franchise taxes may not necessarily be "transacting business" in Texas for purposes of registration with the secretary of state. If you need assistance in determining whether a foreign entity is subject to franchise taxes, you can submit a "Texas nexus questionnaire" (Form AP-114) to the comptroller of public accounts. Based on the answers to the questionnaire, the comptroller will issue an opinion about whether the entity is doing business in Texas for franchise tax purposes. For more information, visit the comptroller's website or contact

Link to our Secretary of state section that talks about this: http://www.sos.state.tx.us/corp/foreign_outofstate.shtml

Edited: 06/26/2010 at 10:43AM

Eddie Ziv

Real Estate Investor · Studio City, California

1,803 posts
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Dec 03 '09, 12:44 PM

The definition of "transacting business" is seems wide open. For instance, my LLC is based in Wyoming. The properties owned by the LLC are located in Texas, however the rent is wired to a bank in California and the mortgage for those properties are paid from a bank in California. So, my interpretation is that there is no "business" conducted in Texas.

Edited: 06/26/2010 at 10:43AM

Uwe S.

Real Estate Investor · Chemnitz, Saxonia

1,241 posts
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Dec 03 '09, 11:04 PM

Originally posted by Brittany Lax

The law in texas is that foreign entities transacting business in texas must register in state.

This is what I mean Eddie, in OH its the same. All states will receive the fees from you :D .

Originally posted by Eddie Ziv

So, my interpretation is that there is no "business" conducted in Texas.

I mean a business is in operation after you receive any cash flow and have expenses in this state. I could be wrong.

-Uwe

Edited: 06/26/2010 at 10:43AM

Uwe S.

Real Estate Investor · Chemnitz, Saxonia

1,241 posts
12 awards
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May 03 '10, 09:22 PM

Originally posted by Eddie Ziv

Originally posted by Uwe Siegert
Eddie,

Can a LLC in Wyoming hold income producing properties in other states without registering as foreign company in these states?

-Uwe

Good question Uwe. I'm not really sure. LLC is not a corporation, by definition. LLC stands for Limited Liability Company. From tax perspective it is a pass-through entity. I will let you know at tax time... :)

Eddie,
Tax time is over what is your experience now? Eagerly interested.

-Uwe

Edited: 06/26/2010 at 12:42PM

Eddie Ziv

Real Estate Investor · Studio City, California

1,803 posts
9 awards
56 influence

May 04 '10, 02:26 AM

Sorry Uwe. Not yet since I filed for extension. I will know for sure by September...

Edited: 06/26/2010 at 12:42PM

Rich Weese

Real Estate Investor · sioux falls, South Dakota

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May 04 '10, 02:36 AM

Here is some info on this matter.

First- a foreign entity owning property in TX does NOT need to be registered. However, if someone screws you or you want to sue the tenant, you CAN"T unless you register. The late filing and penalty is MORE than the original registration. I learned this the hard way.

Second. Just yesterday I received my annual franchise tax form . It is very confusing, so I called the State. There are 4 items, and if you qualify under any of the 4, no franchise tax due. The easiest one is "total revenue". Most of you will have no problem with this. The old form says under 300K, no taxes owed. Their website now shows the amount as 1 million. They also ask you the same #'s from your ind tax return or LLC if you use that.
Hope that helps on those 2 items. Rich

Edited: 06/26/2010 at 12:43PM