Restaurant Permits & Licenses in Austin, Texas

Must comply with Land Development Code Chapter 25-11.

Includes plan review ($405 additional for new). Requires certified food manager.

Multi-member LLCs file Form 1065 (informational return). Single-member LLCs report income on owner's Schedule C. Profits are taxed at individual rates. K-1s must be issued to members by March 15.

Required for all new or changed-use occupancies, including restaurants.

Confirms property is zoned for restaurant use (e.g., CS, GR zones typically allow).

Required for tenant improvements like kitchen installs or structural changes.

Required for all LLCs to register with the state. Online filing available via SOSDirect.

File with county clerk if operating in one county; statewide with SOS for multi-county.

Required for all restaurants as they sell taxable prepared food items.

Required for restaurants preparing/serving food. Plan review required prior to opening (separate fee ~$250).

Employer must use DSHS-approved training program. Applies statewide.

May not apply if contracting licensed third-party; self-performers need license.

Delegated to local health departments (Austin = Austin Public Health). Required before opening.

All Texas LLCs are subject to the franchise tax unless exempt. For 2024, businesses with annualized total revenue of $2.47 million or less are exempt from tax but must still file a 'No Tax Due' report. Restaurants must file Form 05-158 or 05-163 annually.

Texas does not have a state income tax, but employers must register to withhold federal income tax and FICA (Social Security and Medicare) through the IRS. However, this registration is for compliance tracking and reporting purposes in Texas. Employers must also report new hires to the Texas Attorney General.

Even single-member LLCs without employees may need an EIN to open a business bank account or if they elect corporate taxation. Obtained via IRS Form SS-4 or online application.

Texas employers receive a credit of up to 5.4% if they also pay state unemployment tax (SUTA), reducing the effective FUTA rate to 0.6%.

Employers must register with TWC using Form UI-2A. New employers typically pay 2.7% until an experience rating is established.

Austin imposes a 2% mixed beverage sales tax on top of the state and local sales tax. This is collected and remitted through the Texas Comptroller system as part of regular sales tax filings.

Not applicable to standard restaurants unless they operate lodging facilities. If applicable, a 15% tax is imposed on room rentals in Austin.

LLC members are subject to self-employment tax on their share of profits. Must file Schedule SE with Form 1040. Can be reduced by electing S-corp status and paying reasonable salary.

Required for assembly occupancies >50 occupants like restaurants.

ANSI-accredited course; manager needs separate certification.

Reviews parking, drainage, screening per Land Development Code Ch. 25-6.

May require valet plan or off-site parking agreement.

Not legally required for all employers in Texas, but highly encouraged. However, if you have employees, you must either provide workers' comp or file a non-subscriber notice (Form WC-05). Public employers and construction firms with >1 employee must carry coverage. Restaurants are non-construction; thus, mandatory only if employer chooses to participate or has 3+ employees in some interpretations (clarified via TDI guidance). Most restaurant owners elect coverage due to risk exposure.

Not legally required by Texas state law or city ordinance for restaurants, but strongly recommended and often required by landlords, lenders, or investors. Covers third-party injuries (e.g., slips and falls). While not a state mandate, local leases or financing agreements may require it.

Required for any vehicle registered under the LLC. Minimum liability limits: $30,000 bodily injury per person, $60,000 per accident, $25,000 property damage. Applies to delivery vehicles or any restaurant-owned autos.

While TABC does not directly mandate a specific insurance policy, it requires permit holders to comply with dram shop laws. Carrying liquor liability insurance is considered essential to protect against dram shop claims under Texas Civil Practice and Remedies Code § 2.01. Many insurers bundle this with general liability.

A surety bond is required for certain TABC permits (e.g., Mixed Beverage Permit). Bond amounts vary by permit type (e.g., $1,000–$10,000). The bond ensures compliance with state alcohol laws. Example: $1,000 bond for a standard mixed beverage permit.

Not legally required in Texas, but highly recommended for restaurants due to risk of foodborne illness or contamination claims. Often bundled with general liability coverage. No state mandate exists, but civil liability under Texas tort law applies regardless.

Not required for restaurants in Texas. Typically relevant for consultants or professionals giving advice. Restaurants generally do not need E&O unless offering dietary consulting or meal planning services with medical claims.

While single-member LLCs with no employees may not need an EIN (can use SSN), obtaining one is recommended for liability separation and banking purposes. All multi-member LLCs or those with employees must have an EIN.

A single-member LLC is disregarded for federal tax purposes and reports income on Schedule C of the owner’s Form 1040. Multi-member LLCs are treated as partnerships and must file Form 1065. LLCs electing corporate status must file Form 1120.

Employers must provide a safe workplace, display the OSHA poster (available at https://www.osha.gov/poster), report fatalities within 8 hours and hospitalizations within 24 hours, and maintain injury logs (Form 300) if over 10 employees. Specific hazards in restaurants include slips, burns, cuts, and ergonomics.

Requires accessible entrances, restrooms, seating, and menus. New construction or alterations must follow ADA Standards for Accessible Design. Existing facilities must remove barriers where "readily achievable.

While the FDA Food Code is not federal law, it is adopted by Texas and Austin as part of their health regulations. The FDA inspects interstate food suppliers and sets standards that state agencies enforce locally. Restaurants must follow current Good Manufacturing Practices (cGMPs) and maintain food safety plans.

Under the FDA Amendments Act of 2007, facilities must report food they have distributed that is likely to cause serious health issues. Most small restaurants are not required to register in the RFR unless they are involved in large-scale processing or distribution.

Federal Basic Permit (Form 5630.1) is required in addition to Texas Alcoholic Beverage Commission (TABC) licensing. Applies to all businesses manufacturing, importing, or selling alcohol at wholesale or retail.

Requires payment of federal minimum wage ($7.25/hour), overtime (1.5x regular rate after 40 hours), and proper tip credit compliance (if using tip credit, must pay at least $2.13/hour in direct wages). Applies to restaurants engaged in interstate commerce (which includes most with more than $500,000 annual revenue).

Requires eligible employees (worked 1,250 hours in past 12 months, employed 12 months, at site with 50+ employees within 75 miles) to be granted up to 12 weeks of unpaid, job-protected leave annually for qualifying reasons.

Employers must complete Form I-9 to verify identity and work authorization. E-Verify is not required federally for restaurants unless a state mandates it, but federal contractors must use it.

Restaurants must comply with local pretreatment programs under the Clean Water Act. Must install and maintain grease traps to prevent FOG from entering sewers. While enforced locally, the authority stems from federal EPA regulations under 40 CFR 403.

Requires truthful, non-deceptive advertising. Specific to restaurants: menu labeling (if part of chain with 20+ locations), calorie disclosure (under ACA Section 4205), and accurate claims about sourcing (e.g., "organic," "locally grown"). Applies to websites, social media, and printed materials.

Requires calorie counts on menus and menu boards, a statement about daily caloric intake, and availability of written nutrition information upon request. Does not apply to standalone or small chains (<20 locations).

All Texas LLCs must file the Combined Annual Franchise Tax Report and Public Information Report by May 15 each year. Even if no tax is due, the 'No Tax Due' form must be filed. Failure to file may result in administrative dissolution.

All restaurants in Austin must obtain and renew a Food Establishment Permit. Renewal is due annually. The permit must be visibly displayed on the premises. Inspections occur at least twice per year.

Inspections are conducted by Austin Public Health. Scores are posted publicly. Critical violations must be corrected immediately. Repeat violations may lead to permit suspension.

Required for commercial cooking hoods, suppression systems in restaurants.

Required under Austin City Code Chapter 10-1. The restaurant must pass fire safety inspection covering exits, fire extinguishers, suppression systems (e.g., hood), and flammable materials. Certificate of Inspection must be displayed.

Employers must display current federal and Texas labor law posters, including OSHA, FLSA, EEO, Workers' Compensation, and Unemployment Insurance. Posters must be visible to employees. Free downloads available from DOL and TWC websites.

LLCs taxed as corporations file Form 1120; LLCs with multiple members taxed as partnerships file Form 1065. Due April 15 or with extension. Even if no income, a return may be required.

Due with the Annual Franchise Tax Report. Restaurants with revenue below the threshold file 'No Tax Due' form. The tax is based on margin, not net income.

LLCs with pass-through income may require members to pay estimated taxes quarterly. The business itself does not pay federal income tax unless taxed as a C-corp.

Restaurants must collect and remit Texas sales tax on prepared food. Frequency of filing (monthly, quarterly) is assigned by the Comptroller based on average monthly tax collected.

Must keep invoices, receipts, tax returns, and records of taxable sales. Records must be available for audit upon request.

Under FLSA, employers must keep records of hours worked, wages paid, employee names, addresses, and birth dates. OSHA injury logs must be kept for 5 years.

Texas does not require workers' comp, but if elected, the certificate must be posted. If not carried, a 'Notice of Exemption' must be posted instead.

Austin may require periodic review of building occupancy and use permits to ensure compliance with zoning and safety codes. Triggered by inspection findings or complaints.

At least one employee per shift must have a valid Texas Food Handler Certificate. Training must be from an accredited provider. Certificate valid for 2 years.