Texas Crypto Tax: What Texans Owe and Who Can Help

Short answer: Texas does not tax crypto gains or crypto income for individuals. The Texas Constitution says the legislature may not impose a tax on the net incomes of individuals. Your crypto is still fully taxed on the federal return, so an Austin investor needs the same reconciled crypto report as anyone else in the US.

Living in Austin, Dallas, Houston or anywhere else in Texas removes one layer of crypto tax that most Americans pay: the state return. It does not remove the federal one, and the federal one is where nearly all the work sits. Every sale, swap, spend and reward still has to be priced, matched to its cost basis and reported to the IRS.

This guide is for a Texas resident, or someone about to become one, who wants to know what Texas changes about their crypto taxes and who should help with the part that remains. I am Chris Herbst, founder of CountDeFi. We are US crypto tax accountants: we reconcile crypto histories and produce the reports a client's own CPA or preparer files from. We are not a CPA firm and we do not file returns. I am a Chartered Business Accountant in Practice (CBAP) with the Chartered Institute for Business Accountants and a General Tax Practitioner (GTP) with the South African Institute of Taxation.

Does Texas Tax Crypto Gains or Crypto Income?

No, not for individuals. Texas has no individual income tax, and the prohibition sits in the state constitution rather than in ordinary legislation.

Where does the Texas rule come from?

House Joint Resolution 38 added Section 24-a to Article VIII of the Texas Constitution. Its text is short: The legislature may not impose a tax on the net incomes of individuals, including an individual's share of partnership and unincorporated association income. The resolution was put to voters at the election held November 5, 2019.

Does that cover crypto gains as well as staking income?

Yes. A capital gain on a bitcoin sale and a staking reward are both income of an individual, and Texas has no tax on either. There is no Texas personal return on which crypto would appear, so there is no state schedule, no state basis adjustment and no state loss carryover to track.

Does no state income tax mean no crypto tax at all?

No. This is the most common misunderstanding we hear from Texas residents. The federal income tax applies in every state. A Texas resident who sells crypto at a gain owes federal tax on it exactly as a resident of any other state would, and the IRS receives the same broker reporting about that sale.

What Still Applies: the Federal Return

Because Texas adds nothing, the federal rules are the whole picture for most Texas investors. That makes the quality of the federal crypto figures more important, not less: they are the only figures there are.

How does the IRS treat crypto?

The IRS says digital assets are considered property, not currency. Selling crypto for dollars, swapping one token for another and paying for something with crypto are all disposals of property. Each one produces a gain or loss measured against what you paid, and each one belongs on Form 8949, which feeds Schedule D. Our guide to Form 8949 and Schedule D for crypto walks through the forms line by line.

Does holding period still matter in Texas?

Yes, because it matters federally. The IRS explains that if you hold the asset for more than one year before you dispose of it, your capital gain or loss is long-term, and long-term gains are taxed at lower rates than short-term gains. The IRS also notes that for taxable years beginning in 2025, the tax rate on most net capital gain is no higher than 15% for most individuals. In California, by contrast, the state taxes all gains as ordinary income, which we cover in our California crypto tax guide. In Texas the federal holding period is the only one that counts.

How are staking, mining and airdrop rewards taxed for a Texan?

Federally, rewards that are income are taxed at their US dollar value when you receive them, and that value becomes their cost basis for a later sale. Texas adds no state tax on top. The work is the same as anywhere: every reward needs a date, a price and a basis, often across thousands of small receipts. Our staking rewards guide covers the federal treatment in detail.

Federal and Texas Crypto Tax Side by Side

The table shows where Texas leaves the federal result alone. For an individual, the answer is everywhere.

Crypto Businesses, LLCs and the Texas Franchise Tax

The constitutional ban covers individuals. Businesses are a different matter, and a Texan who trades or mines crypto through an entity should know where the line falls.

What is the Texas franchise tax?

The Comptroller describes it as a tax imposed on each taxable entity formed or organized in Texas or doing business in Texas. It is not an income tax on the owner. For the 2026 and 2027 report years the Comptroller lists a No Tax Due Threshold of $2,650,000 and a rate of 0.75% for businesses other than retail or wholesale. The annual report is due May 15.

Does a sole trader holding crypto owe franchise tax?

No. The Comptroller lists sole proprietorships (except for single member LLCs) among the entities that do not file or pay franchise tax, along with general partnerships owned directly by natural persons. A single member LLC is different: it can be a taxable entity for Texas even when it is disregarded federally, so the entity choice deserves a conversation with your preparer.

Who should advise on a crypto entity?

Entity structure, franchise tax filings and federal business returns are work for a CPA, an enrolled agent or a tax attorney. Our part is the reconciled book of transactions and the gain, loss and income figures the entity's return is built from.

Moving to Texas With Unrealised Crypto Gains

Many Texas residents arrived from a state that does tax income, and the timing of the move matters for crypto more than for most assets, because a single disposal can carry years of growth.

Does moving to Texas before a sale avoid your old state's tax?

It can, but only if you have actually changed residence before the sale, and your former state decides that question under its own rules. California, for example, says a resident is taxed on all income regardless of source, and it looks at the facts of the move rather than a single date. A sale made while you are still a resident of your former state is taxed there.

What records help if your former state asks?

Dated evidence of the move, and a crypto report that shows exactly when each disposal happened, in which wallet or exchange, and at what value. The report should be able to separate disposals before the move from disposals after it without anyone rebuilding it.

Choosing Crypto Tax Help as a Texas Resident

Austin has accountants who know crypto, and many more who do not. The useful question is not where the accountant sits but which part of the job they do. Our guide to whether location matters for a crypto tax accountant covers the general case; this section covers Texas.

Does a Texan need a Texas-based accountant for crypto?

Not for the crypto work. With no state return for individuals, there is no Texas-specific crypto calculation for a local accountant to add. The reconciliation is federal and can be done by a specialist anywhere in the US. A local CPA or preparer is still a good choice for signing the return and for knowing the rest of your financial picture.

How do you check a Texas CPA licence?

The Texas State Board of Public Accountancy runs a public License Lookup with an individual licensee search and a CPA firm search. Check the person and the firm before you sign an engagement letter. A firm that calls itself a CPA firm should appear in the firm search.

Who can represent you if the IRS writes?

The IRS says any tax professional with a preparer tax identification number may prepare a federal return, but only enrolled agents, certified public accountants, and attorneys have unlimited representation rights before the IRS. If representation matters to you, that narrows the list. Our guide to who can represent you before the IRS explains the difference.

What separates a crypto specialist from a general preparer?

Ask how they handle transfers between your own wallets, missing cost basis, DeFi positions, and exchanges that no longer exist. A general preparer will usually take a software export as given. A specialist reconciles it against the chain and the exchanges before any figure reaches the return. Our comparison of a crypto CPA and a crypto tax accountant sets out who does which part.

What To Prepare Before You Hire

Whoever you choose, the work goes faster and costs less when the inputs are complete.

What records does the IRS expect?

The IRS asks taxpayers to keep records that are sufficient to establish the positions taken on tax returns, including records of receipts, sales, exchanges and other disposals and the fair market value of the crypto. Our record keeping guide lists what that means in practice.

What should be on your list?

• Every exchange account you have used, including closed ones, with full transaction exports or API access.
• Every self-custody wallet address, on every chain.
• Any Forms 1099 you received, including Form 1099-DA.
• Prior returns, so the reconciliation starts from what was already filed.
• The date you became a Texas resident, if you moved during the years in question.

Where CountDeFi Fits

We do the reconciliation, not the filing. We import every exchange, wallet and chain, match transfers between your own accounts, fix missing cost basis, price every leg, and produce the reports a CPA or preparer files from. For a Texas resident that is the whole of the crypto work, because there is no state layer. Our guide to crypto tax reports for your CPA shows what the hand-off looks like, and the crypto tax accounting service page explains how an engagement runs.