Buy and hold in Texas

[David Fawcett]

Hello everyone!

I'm a newbie from California.  I have been reading a lot of books and listening to a lot of different podcast.  I'm looking to buy single family properties in Texas.  My thought is to buy and hold these properties for a long period of time.  

Does anyone know if Texas has an investor tax for out of state investors?  If anyone knows the answer or can point me in the right direction to find it myself that would be great?  Thank you in advance. 

[Basit Siddiqi]

Hi @David Fawcett

Welcome to Biggerpockets!

Texas is one of the states that does not impose an income tax.

However, the IRS and States tax residents on world-wide income.

As a California resident you would include the income/loss earned from your rental property in Texas.

Furthermore, if you operate as a separate entity(LLC Corp etc) you may be subject to Texas' franchise tax.

More information of the Franchise tax can be found on the website below

https://comptroller.texas.gov/taxes/franchise

What area of Texas are you looking at?