Texas Small Business Owner Regulatory
Exam Questions And Correct Answers
(Verified Answers) Plus Rationales
2025|2026 Q&A | Instant Download Pdf
1. Which Texas agency primarily oversees small business regulations and
resources?
A. Texas Department of Labor
B. Texas Workforce Commission
C. Texas Economic Development & Tourism Office
D. Texas Department of Insurance
The Texas Economic Development & Tourism Office helps small businesses
navigate regulations, permitting, and funding.
2. What is required before operating a business in Texas?
A. Business insurance
B. Business registration with the Texas Secretary of State
C. City council approval
D. Texas Workforce Commission approval
All businesses must register with the Texas Secretary of State or the county
clerk, depending on the business type.
3. Which of the following is a correct requirement for operating a sole
proprietorship in Texas?
,A. Forming a corporation
B. Applying for a federal charter
C. Filing an Assumed Name Certificate with the county clerk
D. Registering with the Texas Railroad Commission
Sole proprietors in Texas must file a Doing Business As (DBA) with the
county clerk if operating under a name other than their own.
4. What is the primary tax collected by the state of Texas on most
business transactions?
A. Excise tax
B. Income tax
C. Sales and Use Tax
D. Property tax
Texas does not have a state income tax; instead, it relies heavily on sales
and use taxes.
5. A Texas small business must collect sales tax if:
A. They sell only to wholesalers
B. They sell tangible personal property to consumers
C. They operate as a nonprofit
D. They only sell digital products
Businesses that sell tangible personal property or taxable services must
collect and remit sales tax.
6. Which number is required for hiring employees in Texas?
A. Federal Employer Identification Number (EIN)
B. State business license number
C. OSHA permit number
D. NAICS business classification code
An EIN is needed for payroll and IRS reporting when hiring employees.
, 7. Who administers the Texas Franchise Tax?
A. Texas Department of Licensing and Regulation
B. Texas Comptroller of Public Accounts
C. Texas Workforce Commission
D. IRS
The Texas Comptroller oversees the franchise tax, which most entities must
pay annually.
8. What is the deadline for filing the Texas Franchise Tax?
A. May 15
B. December 31
C. April 15
D. January 1
Franchise Tax Reports are due on May 15 each year.
9. What is a Certificate of Formation used for in Texas?
A. To legally create a corporation or LLC
B. To trademark a business name
C. To register for unemployment insurance
D. To apply for a state loan
The Certificate of Formation is filed with the Secretary of State to form an
LLC or corporation.
10. If a business sells food or beverages in Texas, which permit is
required?
A. City food handler certificate
B. Texas Sales and Use Tax Permit
C. State franchise permit
D. Texas Water Commission permit
Exam Questions And Correct Answers
(Verified Answers) Plus Rationales
2025|2026 Q&A | Instant Download Pdf
1. Which Texas agency primarily oversees small business regulations and
resources?
A. Texas Department of Labor
B. Texas Workforce Commission
C. Texas Economic Development & Tourism Office
D. Texas Department of Insurance
The Texas Economic Development & Tourism Office helps small businesses
navigate regulations, permitting, and funding.
2. What is required before operating a business in Texas?
A. Business insurance
B. Business registration with the Texas Secretary of State
C. City council approval
D. Texas Workforce Commission approval
All businesses must register with the Texas Secretary of State or the county
clerk, depending on the business type.
3. Which of the following is a correct requirement for operating a sole
proprietorship in Texas?
,A. Forming a corporation
B. Applying for a federal charter
C. Filing an Assumed Name Certificate with the county clerk
D. Registering with the Texas Railroad Commission
Sole proprietors in Texas must file a Doing Business As (DBA) with the
county clerk if operating under a name other than their own.
4. What is the primary tax collected by the state of Texas on most
business transactions?
A. Excise tax
B. Income tax
C. Sales and Use Tax
D. Property tax
Texas does not have a state income tax; instead, it relies heavily on sales
and use taxes.
5. A Texas small business must collect sales tax if:
A. They sell only to wholesalers
B. They sell tangible personal property to consumers
C. They operate as a nonprofit
D. They only sell digital products
Businesses that sell tangible personal property or taxable services must
collect and remit sales tax.
6. Which number is required for hiring employees in Texas?
A. Federal Employer Identification Number (EIN)
B. State business license number
C. OSHA permit number
D. NAICS business classification code
An EIN is needed for payroll and IRS reporting when hiring employees.
, 7. Who administers the Texas Franchise Tax?
A. Texas Department of Licensing and Regulation
B. Texas Comptroller of Public Accounts
C. Texas Workforce Commission
D. IRS
The Texas Comptroller oversees the franchise tax, which most entities must
pay annually.
8. What is the deadline for filing the Texas Franchise Tax?
A. May 15
B. December 31
C. April 15
D. January 1
Franchise Tax Reports are due on May 15 each year.
9. What is a Certificate of Formation used for in Texas?
A. To legally create a corporation or LLC
B. To trademark a business name
C. To register for unemployment insurance
D. To apply for a state loan
The Certificate of Formation is filed with the Secretary of State to form an
LLC or corporation.
10. If a business sells food or beverages in Texas, which permit is
required?
A. City food handler certificate
B. Texas Sales and Use Tax Permit
C. State franchise permit
D. Texas Water Commission permit
