Even Annotated Business and Commerce Code does not give any good answer as to what it means to "do business in Texas".  

@Shaun Weekes I was just thinking about something like this as an note type investment earlier today. 

I see a lot of 7 or 8 numbers as the threshold so I'm curious why it's 7/8 an not say 4/5?  

A secondary risk is screwing up your reputation because you have deals that keep blowing up an not working out.

There are good ones an not so good ones. 

Want organic value add with upside, but not a heavy lift an not something in a war zone

I an not a CPA or tax professional, but I agree with @Lane Kawaoka on this issue.  

How should I annotate that transfer? 

If you want to go right to the source and look up Texas law on security deposits -- or if you're writing a letter to your landlord or tenant and want to cite the applicable law -- the relevant statute(s) can be found at Texas Property Code Annotated §§ 92.101 to 92.109.

Annotate and make your notes in a notepad or other document as you read.