Texas has no state income tax, no state nonresident-seller withholding, and no parallel state reduction-certificate process. For a foreign seller, federal FIRPTA at 15% of the gross is the only withholding to manage at closing — and the only return to file the following year.
Texas does not impose a state individual income tax. Article 8, §24 of the Texas Constitution requires statewide voter approval before a personal income tax could be enacted. As a structural matter, there is no nonresident-seller withholding analogous to California's Form 593 or Maryland's MW506NRS to layer on top of federal FIRPTA at a Texas closing.
For a foreign seller exiting a Houston, Dallas, Austin, San Antonio, or Fort Worth property, the only federal withholding obligation comes from IRC §1445 — the 15% federal FIRPTA regime. There is no parallel Texas filing. There is no Texas return for the seller to file the following year on the capital gain. The federal piece runs the entire show.
FIRPTA is federal. The rules that apply in Dallas also apply in Miami, Honolulu, and Cleveland:
A Canadian seller closes on an $850,000.00 East Austin house. Basis (purchase price plus capital improvements) is $480,000.00. Gain on sale is $370,000.00. Here is the cash mechanics at closing under the default 15% rule, with no reduction certificate:
The seller's actual federal U.S. tax on the $370,000.00 long-term capital gain is meaningfully lower than $127,500.00 — under the 2026 LTCG bracket structure, the federal tax on that gain is closer to $55,500.00 before any treaty modifications. The difference — roughly $72,000.00 — sits with the IRS until the seller files Form 1040-NR the following year and reconciles to actual liability. That refund cycle typically runs 6-9 months from filing.
The federal-only structure makes Form 8288-B the entire ballgame in Texas. The certificate, filed pre-closing with IRS Ogden, asks the IRS to authorize a reduced withholding amount based on the seller's actual expected federal tax on the gain. The IRS reviews the seller's basis, capital improvements, and gain calculation; issues a certificate; and the buyer at closing withholds the certified amount instead of the headline 15%.
On the $850,000.00 Austin example: a Form 8288-B filed 60-90 days before closing, supported by the basis documentation, can drop the closing-table withholding from $127,500.00 to roughly $55,500.00 (the actual expected federal tax on the gain). That's $72,000.00 the seller keeps at the closing table instead of waiting on a refund. When the gain is zero — a loss sale, a documented §1031 exchange, basis improvements bringing basis up to sales price, or a treaty exemption — Form 8288-B can authorize $0 federal withholding under Treas. Reg. §1.1445-3.
IRS processing of Form 8288-B typically runs 60-90 days from complete submission. The practical recommendation is to file 60+ days before the projected closing date. Texas closings are often quick — 30-45 day contracts are common — which means Form 8288-B work needs to start as soon as the property is listed, not at contract signing.
Texas closings are typically handled by title companies under the state's strong title-insurance regime. The title company does not file federal Form 8288 — that's the buyer's statutory obligation under IRC §1445. In practice, the firm handles the federal package directly with the buyer and seller (the title company stays out of the IRS-filing chain), and the title company applies the FIRPTA withholding amount as a reduction to the seller's net proceeds on the closing disclosure. This keeps the title company off the hook for federal tax liability and gives the seller a clean closing.
One Texas-specific note on documentary cost: Texas charges no real estate transfer tax (unlike Florida's documentary stamp tax). The buyer pays the title insurance premium; the seller pays standard commissions and prorations. There is no state revenue stamp on the deed. The closing is unusually low-friction by national standards.
For Texas foreign-seller engagements, the firm prepares the Form 8288-B certificate when there is sufficient pre-closing runway (60+ days), prepares the Form 8288 / 8288-A package within the 20-day federal deadline at closing, runs ITIN applications (Form W-7) in parallel when the seller doesn't already have one, and prepares the eventual Form 1040-NR the following filing season to claim the federal refund. Engagement is direct with the seller or buyer; no fee to the Texas title company. Texas-specific operational note: because there is no state filing, the entire engagement is federal — typically a faster turnaround than a stacking state like California or Maryland.
For the Texas state landing page and intake form, see FIRPTA Texas: Foreign-Seller Closings. For the federal mechanics in depth, see the Foreign Sellers Guide.
Have a Texas FIRPTA situation?
Start a case at the platform intake (~3 minutes). Same-day response from Steven.
Start a case → Or call 216-505-0717