The recent business seizure of a beloved Houston pizza chain should serve as a reminder to other Texas small businesses that the Texas Comptroller doesn’t play around with nonpayment of state taxes. How can you avoid the same fate?
How Tax Issues Can Lead to a Business Seizure
Patrons of Dan’s Pizza Co.’s two Houston locations were greeted at the restaurant’s doors in February 2026 with a sign that declared “SEIZED: This Property Has Been Seized for the Nonpayment of Taxes Owned to the State of Texas.”
When you collect sales tax or payroll withholding, you are holding trust money for the government, not extra cash for your business. If you fall behind and don’t respond to notices, tax agencies can file liens, freeze accounts, and ultimately seize business assets.
While the news came as a surprise to its customers, there is no doubt that the pizza chain was given ample warning. Billing notices for each past-due reporting period, due upon receipt, arrive first. Escalation after that can include the involvement of a third-party collection service, calls and/or physical visits by a field representative, tax liens, and—after a hearing is conducted—a suspension or revocation of state permits and licenses.
As part of further escalation, the Texas Comptroller can perform a non‑exempt business seizure. If that includes a physical location, the owner and employees will be denied entry, and everything within the premises could be sold if the debt is not resolved. For Dan’s Pizza Co., that meant both locations were suddenly closed amid the failure to pay $240,000 in state tax, penalty, and interest spanning multiple reporting periods.
Further escalation may involve referring the case to the Attorney General’s Office, which may pursue severe civil or, in extreme cases, criminal action if warranted.
How Can a Business Seizure Be Avoided?
First, pay attention to your mail, phone calls, and other warnings. Missing a tax deadline here and there is human, but the utterly avoidable interest and penalties alone should keep you from doing so.
Then, take action. Once you start facing bills—any bills—that you cannot pay, sticking your head in the sand will not help. Your debts will multiply exponentially without a plan. If your phones are being disconnected, vendors are going unpaid, or you are skipping tax deposits to make payroll, you are already in the danger zone—even if customers still love your products or services.
A business seizure doesn’t always have to be the end of the story, but it is far better to act while your doors are still open. How else will you make the money to pay the back taxes? Once a seizure happens (or your assets are frozen or your license revoked), your negotiating leverage drops sharply, reopening becomes far more difficult, and your ability to pay becomes that much harder.
The good news is that the Texas Comptroller would rather Texas businesses stay in business. To that end, the agency seeks to avoid imposing undue hardship on taxpayers.
Of course, before a business seizure occurs, the best course of action is to pay all taxes, penalties, and interest due. If that’s not possible, there may be options that can be negotiated, such as setting up a payment plan or posting a security bond, a surety bond, or a Texas sales tax bond, which is either a policy through a bond company or another assurance of cash or a letter of credit. Then, roll up your sleeves and get to work.
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Shutterstock 2303744865|April 14, 2026