Construction Business Books CleanupFor Texas owners

Klyde Warren Park is grass over Woodall Rodgers Freeway. People in Dallas know that lawn, the one that looks like a park and is actually a lid. We see a finished job the same way. The surface can look paid while ten percent is still unpaid underneath. The lawn is the feeling. The hold is the work.

Old warehouse shells in the Design District now show finishes instead of storing pipe. You see the new finish. We ask whether the remodel left money held back, and whether that money is still a receivable or was booked as if the glass had already cleared the bank.

White Rock Lake exists because White Rock Creek was dammed. Most of us in Dallas know a shore that water is holding back. We know that held back feeling on a job too. A retainage row holds cash the way that dam holds the creek. Without the row, the month is only a surface, and the next draw spends water that was never free.

The Dallas Marathon usually leaves downtown in December and loops White Rock Lake. Every person who has stood in that cold start knows the last weeks of the year. We know December's pressure on a crew too, and we ask whether the jobs closed before anyone lined up, and whether the hold was still a row when the office shut for the holiday.

The giant eyeball in front of the Joule, the sculpture called Eye, sits on a downtown sidewalk like a joke the block agreed to keep. People who pass that eyeball keep a private joke about it. You see a punch line. We see an asset a business might still be writing down, and we wonder whether anyone ever put it on a schedule. A schedule that still lists a compressor that was stolen, or a truck that was traded, is the same kind of joke, and the April rendition is where that joke stops being funny.

Bishop Arts is the block of independent shops and galleries in north Oak Cliff, around North Bishop Avenue and Davis Street. People who have walked that block can picture a storefront being opened up. You see the new front. We ask whether the remodel stated labor apart from materials, and whether the amount the owner kept back is still a receivable or was booked as if the glass was already paid for.

The lighted ball on the downtown skyline is Reunion Tower, standing in the district that still carries the old La Reunion name. People in Dallas know that ball. We do not guess its book value from the sidewalk. We ask a plainer question of a job. Is the retainage a receivable still, or has somebody already spent it in their head and in the operating account.

Fair Park fills for the State Fair, which usually opens on the last Friday of September and stays up for weeks. People in Dallas know that gate. We ask whether the jobs that built the booths, the temporary power, and the small remodels around the grounds were closed before the gates opened. A fair month is a feeling of the whole state. A closed month is a date you can point to.

Spring in Dallas is the season when cool air out of Canada meets humid air off the Gulf, and the hail lines are famous. People here know the sound of that ice on a roof. A roof after a declared disaster is still a job, with a request date and a hold, and the labor on that repair can be a different sales tax question if the bill states the labor apart from the materials. The weather is the feeling. The request date is the work.

If the job sits outside Dallas and Fort Worth, we are all Texans, and we still meet you by video from Dallas. Shared books, a calendar link, and the same close date, whichever county the slab is in. We do not claim a visit, and we do not claim an office in your town. The phone is +1 844-324-7273.

Texas Property Code section 53.101 tells an owner to reserve 10 percent of the contract price while work is in progress, and for 30 days after that work is completed, on an original contract where a mechanic's lien may be claimed. If there is no contract price, the reserve is 10 percent of the value of the work. The statute uses the words funds required to be reserved.

On the books that slice is neither profit nor spare cash you can spend on the next truck. When you are the owner holding it, the row is a liability until the work is done and the reserve is released. When you are the contractor waiting on it, the row is a receivable until a draw actually pays it. A job that feels done in the field can still be open on that row for those 30 days, and for as long after as the contract keeps the money back.

Nothing on this page prints your contract price. The shape is the point. If the file has the hold inside a cost code, or missing entirely, the first repair on a job in this state is to give the reserved funds a row and to tie that row to the draws that have and have not cleared. October is early enough to say the row is missing. A surety statement is a poor place to meet that hole for the first time.

Property Code section 28.002 says an owner who receives a written payment request, for an amount the contract allows and for work properly performed or materials suitably stored, pays the contractor less any amount the statute lets the owner withhold. The deadline is the 35th day after the owner receives the request. An owner who has a proper written request has 35 days. The books should show that request, the day it was received, and what was withheld on purpose. A hope that a check is coming is not a date. When the request is real and the 35 days are quiet, the open item is the owner's clock, and the job's cash story changes on that day whether or not anyone has updated a spreadsheet.

A contractor who receives payment pays its subcontractors the portion attributable to their work not later than the seventh day after the contractor receives the owner's payment. The next tier has the same seven day pass through. Once the owner pays, the share for a subcontractor moves within seven days. The pass through is a date, not a mood. If the deposit landed on Friday and the sub is still waiting the following Friday, the books should show the deposit, the portion that belongs to that sub, and the day the pass through was due.

That is why a deposit in this state can look like profit on a Tuesday and be spoken for by Thursday. Record the deposit as free cash and park the sub bills in a vague expense, and both the 7 day clock and the job cost disappear. We still date the deposit, name the subs it belongs to, and leave the remainder as the only amount that could be a draw. What we will not invent is a request that was never sent. A text that only says the draw is coming leaves the item open, and the 35 days do not start in our notes.

Withholding is the other half of the same clock. An owner who holds back for a reason the statute allows should see that reason on the row, rather than as a silent short pay. The contractor's receivable is then the unpaid allowed amount, rather than the whole application. Mixing those two is how a job in this state looks both underbilled and overpaid at once.

Reports originally due from 1 January 2026 through 31 December 2027 use a no tax due line of 2,650,000 dollars in annualized total revenue. Most entities are taxed at 0.75 percent. Qualifying wholesalers and retailers are taxed at 0.375 percent. File that franchise tax report by the fifteenth of May. The rate on the form is the rate for the year being filed, not the rate remembered from last spring. Open the linked instructions if you want the public print these three rates were copied from.

Franchise margin and the cash in the operating account answer different questions. The hold on a job is a third question. Owners get into trouble when one number is asked to answer all three. Each of those three gets its own line in the close notes. A company can sit under the no tax due line and still owe the report. Crossing that revenue line is what turns the report into a tax, or leaves it as a filing only. The filing itself stays. A quiet year in the bank is not the same thing as a year with no report.

The hold on an open job does not rewrite the revenue that report reads, and we will not move retainage into or out of that revenue to make the May number feel kinder. On the franchise reports for 2026 and 2027, annualized total revenue of 2,650,000 dollars is the line under which no tax is due. Wholesalers and retailers who qualify are charged 0.375 percent. Companies outside those two groups pay 0.75 percent on the same report. The usual filing day for that report is the fifteenth of May.

A construction company can be a corporation, a limited liability company, an S corporation, or a partnership, and those are taxable entities for the franchise report. A general partnership owned entirely by natural persons stays off that list. A limited liability partnership is on it. We say which shape the file is in before anyone talks about an election. The election is a conversation with the return, not a slogan on this page. Sales tax and the franchise margin rules have no private edition for one contractor. A fresher public print, dropped in the form, takes the stale sentence down.

Trucks and tools on a Texas file go on a business personal property rendition whose usual last day is 15 April, unless a written request pushes that day to 15 May. Trailers, forms, and the tools that live on the truck are the list people forget because the iron is still in the yard and therefore feels obvious. Business property renditions usually land on 15 April, with a written request able to push the day to 15 May.

Anyone who has owned a work truck knows the list is never quite the list. A truck that was traded in March can still be on the books in April. A compressor that was stolen and never written off can still be on the rendition. The question we ask is whether the rendition and the asset list still describe the same trucks. The day itself is printed on the Comptroller property tax deadline calendar, and the statute behind that calendar is Tax Code section 22.23.

Bonus depreciation on the federal return can flow into cost of goods sold on the Texas report for assets that qualify, beginning with the 2026 report. The adjustment is technical and it is easy to overclaim. We do not print a worksheet here. We name the question while the year can still be read, and we follow the instructions for the report actually being filed.

State sales tax is 6.25 percent. Local tax cannot push the combined rate above 8.25 percent. Publication 94 157 describes a lump sum contract as one price that does not state labor separately from incorporated materials. A separated contract divides the price into at least a charge for skill and labor and a charge for incorporated materials, or it requires the invoices to state those charges apart. Under the separated contract a homebuilder collects tax on the agreed price of the materials and may buy those materials with a resale certificate.

On residential repair and on new construction, that shape decides the sales tax. A lump sum contractor pays tax on supplies and materials when buying them, and does not charge the customer tax. A separated contractor may buy incorporated materials with a resale certificate, collects tax from the customer on the materials and on certain services stated apart, and does not collect tax on the construction labor. The charge for materials has to be at least what the contractor paid. That last test is a books test. A materials line thinner than the supplier bill is a story the drawer will not support.

On a separated residential or new construction contract, the jobsite is the contractor's place of business for local tax on the materials. On a lump sum contract the contractor is the consumer, and local tax follows the supplier's sale or the delivery into a local taxing jurisdiction. The two shapes are not the same payable. Coding every job the same way is how a file in this state gets them backwards.

Nonresidential repair, remodel, and restoration is taxable on the whole charge, labor and materials, whether the bill is lump sum or separated. Offices, restaurants, farms, hospitals, and parking lots sit on that side. A family dwelling does not. A single charge that both adds new square footage and remodels existing nonresidential space is presumed fully taxable if the remodeling portion is more than 5 percent of the total charge. The contractor can overcome that presumption at the time of the transaction by separately stating a reasonable charge for the taxable services. Later proof can be a written scope, bid sheets, a schedule of values, or drawings. Rebuilding the split after the fact is a weaker story, which is why the invoice has to be right when it is sent.

Scheduled, periodic maintenance on real property that is not broken is not a taxable repair, if the paperwork says the work is scheduled and periodic. The contractor still pays tax on taxable items bought to do the work. Repainting that is maintenance is not taxable labor. Reroofing that goes beyond maintenance is repair. We read the contract before anyone codes the whole invoice as one thing.

Labor to repair nonresidential property damaged in a declared disaster area is not taxable if the damage was caused by that event and the bill states labor separately from incorporated materials. Materials stay taxable. The paperwork is the whole exception. A bill that lumps everything together leaves the exception on the table. Hail on a roof in Dallas does not create the exception by itself. The separated labor line does.

Sales tax you collected is a payable of its own until the filing sends it on. That payable stays apart from the hold and apart from profit. Filing follows the 20th for the period the permit uses. We ask, during a cleanup, whether the payable and the filings agree, because a fat job and a thin payable is a specific kind of trouble. The rate on a public page is the rate repeated here, and it changes on this site only when that public page changes.

Texas does not tax a person's income, which is why this page says so out loud and why we never invent one. What the federal return reads is the months that have already closed. Income tax in some other state is a different page. The federal estimate days for a calendar year individual, 15 April, 15 June, 15 September, and 15 January, sit beside the franchise report. They do not replace the hold, and they do not replace the fifteenth of May.

Owners anywhere in Texas meet us by video, with the file shared, and the close still lands on the date we named even when the job is in another county. The same practice still picks up. Send the open jobs, the newest bank pages, and the draws that never landed on the right job. What we can see is the first answer. What is missing stays named as missing.