Although Texas doesn’t collect personal income taxes, the state instead relies on other forms of tax, such as sales tax. The sale of personal property and taxable services is subject to sales tax, which the state collects from businesses.
Because businesses serve as some of the state’s biggest income sources, Texas’ tax evasion and fraud laws typically apply to them. It’s a serious offense for a business to avoid paying sales tax or tamper with its tax records, and violations can lead to criminal penalties.
Failure to pay taxes, false entry
According to Texas law, a person violates the law if they intentionally don’t pay taxes collected by the state comptroller. It’s also a crime for a person to knowingly conceal, alter, destroy or fail to make tax records, which is considered tax fraud.
Penalties for tax evasion, false entries
The following are the penalties for tax evasion and fraud:
Tax evasion:
- Tax not paid less than $50: The offense is a Class C misdemeanor, punishable by up to $500 in fines.
- Tax not paid is $50 or more, less than $500: The offense is a Class B misdemeanor, punishable by up to 180 days in jail and $2,000 in fines.
- Tax not paid is $500 or more, less than $1,500: The offense is a Class A misdemeanor, punishable by up to one year in prison and $4,000 in fines.
- Tax not paid is $1,500 or more, less than $20,000: The offense is a state jail felony, punishable by up to two years in prison and $10,000 in fines.
- Tax not paid is $20,000 or more, less than $100,000: The offense is a third-degree felony, punishable by up to 10 years in prison.
- Tax not paid is $100,000 or more, less than $200,000: The offense is a second-degree felony, punishable by up to 20 years in prison.
- Tax not paid is $200,000 or more: The offense is a first-degree felony, punishable by up to 99 years in prison.
Tax fraud: The offense is a felony of the third degree, punishable by up to 10 years in prison.
Tax evasion and fraud in Texas carry stringent penalties, including hefty fines and possible imprisonment. If you are under scrutiny for either offense, consider consulting a legal professional who can protect your rights in court.