The Texas franchise tax is a tax on the privilege of doing business in Texas, based on an entity's margin rather than on net income. It applies to most LLCs, corporations and partnerships formed in or doing business in Texas, and the report is filed with the Texas Comptroller of Public Accounts.
Many small entities owe no tax because their revenue is below the no-tax-due threshold. They generally still have to file the Public Information Report (or Ownership Information Report), because the separate No Tax Due Report has been discontinued. Missing the filing can lead to penalties and, over time, a loss of the entity's right to transact business in the state.
What the filing involves
- The annual franchise tax report, based on the entity's revenue and the way it computes its taxable margin, when the entity is above the no-tax-due threshold
- The Public Information Report (or Ownership Information Report), which lists officers, directors, managers or members and is required even when no tax is due
- Registration with the Comptroller if the entity does not yet have a franchise tax account
- Checking whether the entity qualifies for the no-tax-due filing
When the report is due
The annual report is generally due on May 15 each year, and moves to the next business day when that falls on a weekend or holiday. An extension is available in some cases; it extends the time to file, not the time to pay. Because the no-tax-due threshold and the forms are updated, we confirm the current rules each year before preparing your report.
Common problems
- Assuming a small or inactive entity does not have to file
- Forgetting the Public Information Report
- Filing late because the Comptroller's notice was sent to an old address or registered agent
- Losing good standing because a report was missed for more than one year
How it works
- 1
We check your entity and account
We confirm your entity's details and franchise tax account with the Comptroller.
- 2
We gather your revenue figures
We use your books or tax return to work out the revenue and margin the report needs.
- 3
We prepare the report
We prepare the annual report and the Public Information Report and tell you whether any tax is due.
- 4
We file and keep a copy
We file by the due date and keep the confirmation with your records.
What we need from you
- Entity name, EIN, Texas taxpayer number and the Comptroller's account details if you have them
- Annual revenue and the information in your tax return or profit and loss statement
- Names and addresses of officers, directors, managers or members
- Any notice you received from the Comptroller
Not sure what applies to you? Send what you have and we will tell you what is missing.
Why work with BUTA Tax
- Tax preparation, bookkeeping, payroll, business formation and IRS help in one firm, so your records line up.
- A secure client portal for your documents and messages, available whenever you need it.
- Starting prices shown on this site and the questions that set your final price asked before you pay.
- An office in Frisco, Texas, and online service for clients across the United States.
Frequently asked questions
Does my small LLC have to file a Texas franchise tax report?
Most do have a filing. Even when revenue is below the no-tax-due threshold and no tax is owed, the entity generally still has to file the Public Information Report (or Ownership Information Report). Check with us if you are unsure which applies to your entity.
What is the Public Information Report?
It is a filing that lists your entity's officers, directors, managers or members and is filed with the franchise tax report.
What happens if I miss the deadline?
Penalties and interest can apply, and an entity that stays out of compliance can lose its right to transact business in Texas. If you have missed a filing, act as soon as you can.
Do you handle franchise tax for entities in other states?
Other states have their own annual reports and franchise or privilege taxes. We can help with those too. Tell us which state.
How much does it cost?
The Comptroller's tax is billed by the state. Our fee covers preparation and filing, and we quote it before you start. The tax due, if any, is passed through at cost.