Are you ready to start a church in Texas? Starting a church is a significant undertaking that requires more than a calling or a community. As in most places, the Lone Star State also has specific legal steps that must be followed to establish a church recognized by the state and eligible for tax-exempt status.
If you’re thinking about launching a religious organization in Texas, understanding the legal requirements is crucial to building a solid foundation.
This blog outlines the key steps and considerations involved in starting a church in Texas.
1. To Start a Church in Texas, You Will Need a Defined Religious Purpose
Before taking legal steps, clearly define your church’s purpose, beliefs, and organizational structure. A formal mission statement, statement of faith, and description of religious services will be important later when applying for tax exemptions.
Your church should:
- Hold regular worship services
- Have a recognized creed and form of worship
- Establish a distinct ecclesiastical government
- Have a formal congregation
- Operate as a nonprofit religious organization
Without these elements, your church may struggle to meet IRS and state guidelines for recognition.
2. Choose a Name For Your Church
Selecting a unique name for your church is important. Your name must not be the same or too similar to an existing entity registered with the Texas Secretary of State.
You can check name availability through the Texas Secretary of State’s website. It’s wise to choose a name that reflects your religious mission and is easy for people to remember and find online.
Helpful Links On Texas Church Name Registration:
3. Form a Nonprofit Corporation For Your Church
In Texas, most churches incorporate as nonprofit corporations. This offers legal protection for church leaders and members by limiting personal liability.
Steps to Incorporate:
- Prepare a Certificate of Formation — Nonprofit Corporation (Form 202). Include the church’s name, registered agent, and a clear religious purpose.
- File the Certificate with the Texas Secretary of State, either online or by mail.
- Pay the filing fee. As of 2025, the fee is $25.
Upon approval, your church becomes a recognized legal entity in Texas.
4. Create Bylaws and a Governing Body
Church bylaws are internal rules that govern the management of the church. They should cover:
- How church leadership is elected
- How meetings are conducted
- Membership requirements
- How financial decisions are made
- Procedures for amending church bylaws
State law requires nonprofit corporations in Texas to have a board of directors. Most churches call this group a board of elders, deacons, or trustees.
5. Obtain an Employer Identification Number (EIN)
You need an EIN, also known as a Federal Tax Identification Number, even if you don’t plan to hire employees immediately. You can apply for an EIN online through the IRS website. The EIN will be necessary for opening a bank account, applying for tax-exempt status, and handling payroll if you have staff.
6. Apply for Federal Tax-Exempt Status
Churches in Texas are automatically considered tax-exempt under Section 501(c)(3) of the Internal Revenue Code without applying –
However, filling out and submitting Texas tax forms, such as obtaining an official IRS determination letter by filing Form 1023 (Application for Recognition of Exemption) or Form 1023-EZ, can be beneficial.
Why Apply for Tax Exemptions Formally?
- Provides proof of exemption for donors
- Helps when applying for church grants
- Offers protection against audits
Helpful Links On Federal Tax Exemptions for Churches:
- A Guide on Filing & Submitting
- The Difference Between 1023 and 1023-EZ
- What is an IRS Determination Letter?
- Section 501(c)(3) of the Internal Revenue Code
Be prepared to provide detailed information about your church’s beliefs, organizational structure, sources of income, and planned activities.
7. Register for State & Local Tax Exemptions
While the IRS handles federal exemptions, the State of Texas offers its own religious organization exemptions:
Key Tax Exemptions for Churches in Texas:
- Franchise Tax Exemption: File Form AP-204 with the Texas Comptroller.
- Sales Tax Exemption: Apply using the filed AP-204 form.
- Property Tax Exemption: Apply through your local county appraisal district using Form 50-299.
Helpful Links On State/Local Tax Exemption for Texas Churches:
Each application requires proof of nonprofit status and detailed descriptions of religious activities.
8. Open a Bank Account For the Church
Open a bank account in the church’s name to manage donations and expenses transparently.
Most banks will require:
- A copy of your Certificate of Formation ( Form 202: Refer back to #3 )
- Your EIN (Employer Identification Number: Refer back to #5)
- Church Bylaws (Refer back to #4)
- A banking resolution from the board authorizing account signers
Keeping church finances separate from personal accounts is not just good practice — it’s a legal necessity.
9. Employment, Church Insurance, & Payroll Laws
If your church plans to hire staff, such as pastors, musicians, or administrative workers, you must comply with federal and state employment laws.
Key steps include:
- Classifying workers correctly as employees or independent contractors
- Withholding and remitting payroll taxes (unless exempt under specific IRS rules)
- Carrying workers’ compensation insurance, if required
Beyond employment compliance, your church must also consider church insurance protection. According to Lee Insurance Agency, comprehensive church insurance covers key risks that ministries face today. Essential coverage areas include general liability, pastoral counseling liability, property insurance for church buildings and contents, workers’ compensation, and auto insurance for church vehicles.
Texas church insurance agencies recommend that comprehensive policies should also include coverage for –
- Directors & officers
- Pastoral Counseling Liability
- General Liability
- Employment Practices Liability
- Sexual Misconduct Liability
Without proper coverage, a single lawsuit or accident could financially devastate a new church.
which are growing concerns among faith-based organizations. Working with a provider experienced in church insurance ensures your ministry’s operations, leadership, and congregation are fully protected from both common and unique exposures.
Consult both a payroll professional and an insurance expert familiar with church needs in Texas to build a strong, legally compliant foundation that protects your ministry’s future.
10. To Successfully Start a Church in Texas, You Must Maintain Compliance
Once established, your church must maintain good standing by:
- Filing any required annual reports with the Texas Secretary of State (rare for religious nonprofits, but always verify)
- Keeping detailed records of meetings and financial transactions
- Renewing property tax exemptions periodically
- Following bylaws and updating them when necessary
Regular compliance protects your tax-exempt status and fosters transparency and trust with your congregation.
Tips On How to Start a Church in Texas The Right Way
Starting a church in Texas involves more than gathering a congregation- It requires careful planning, filing the correct documents, and adhering to local and federal laws.
By understanding the legal requirements upfront — from forming a nonprofit corporation to applying for tax exemptions — you can lay a strong foundation for a thriving, legally compliant ministry. If you’re considering starting a church in Texas, consult with an attorney or legal expert experienced in nonprofit and religious organization law. Getting the right advice early can save you time, money, and legal headaches down the road.
Ready to Start A Church in Texas & Grow Your Congregation?
Every church has unique needs, and protecting your ministry with the right insurance is critical to long-term success. Whether it’s safeguarding your property, leadership, congregation, or finances, comprehensive coverage tailored to your specific risks can make all the difference.
At Lee Insurance Agency, we specialize in providing church insurance solutions that address today’s challenges and tomorrow’s uncertainties. Don’t leave your ministry vulnerable.
If you’re ready to start a church in Texas, contact our experienced church insurance agency today at 281-812-8400 to discuss your church’s insurance needs and find the right coverage to support your organization’s mission and growth.
