A foreign entity operating in the state of Texas must register with the secretary of state to transact business. An entity is not considered to be transacting business if it is engaged in the following:

1) maintaining or defending an action or suit or an administrative or arbitration proceeding, or effecting the settlement of:
A) such an action, suit, or proceeding; or
B) a claim or dispute to which the entity is a party;
2) holding a meeting of the entity’s managerial officials, owners, or members or carrying on another activity concerning the entity’s internal affairs;
3) maintaining a bank account;
4) maintaining an office or agency for:
A) transferring, exchanging, or registering securities the entity issues; or
B) appointing or maintaining a trustee or depositary related to the entity’s securities;
5) voting the interest of an entity the foreign entity has acquired;
6) effecting a sale through an independent contractor;
7) creating, as borrower or lender, or acquiring indebtedness or a mortgage or other security interest in real or personal property;
8) securing or collecting a debt due the entity or enforcing a right in property that secures a debt due the entity;
9) transacting business in interstate commerce;
10) conducting an isolated transaction that:
A) is completed within a period of 30 days; and
B) is not in the course of a number of repeated, similar transactions;
11) in a case that does not involve an activity that would constitute the transaction of business in this state if the activity were one of a foreign entity acting in its own right:
A) exercising a power of executor or administrator of the estate of a nonresident decedent under ancillary letters issued by a court of this state; or
B) exercising a power of a trustee under the will of a nonresident decedent, or under a trust created by one or more nonresidents of this state, or by one or more foreign entities;
12) regarding a debt secured by a mortgage or lien on real or personal property in this state:
A) acquiring the debt in a transaction outside this state or in interstate commerce;
B) collecting or adjusting a principal or interest payment on the debt;
C) enforcing or adjusting a right or property securing the debt;
D) taking an action necessary to preserve and protect the interest of the mortgagee in the security; or
E) engaging in any combination of transactions described by this subdivision;
13) investing in or acquiring, in a transaction outside of this state, a royalty or other nonoperating mineral interest;
14) executing a division order, contract of sale, or other instrument incidental to ownership of a nonoperating mineral interest;
15) owning, without more, real or personal property in this state; or
16) acting as a governing person of a domestic or foreign entity that is registered to transact business in this state.

Wayfair Nexus

Remote sellers with total Texas revenue of less than $500,000 in the preceding twelve calendar months are not required to obtain a tax permit or collect, report and remit state and local use tax. A foreign (i.e., out-of-state) taxable entity with annual gross receipts of $500,000 or more from business in Texas has economic nexus even if the entity has no physical presence in this state and must register and pay franchise taxes (where applicable).


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