Texas Franchise Tax
Nearly every Texas entity has an annual franchise tax obligation — and since 2024 the most common mistake is assuming that owing nothing means filing nothing.
The change that catches people out. For reports originally due on or after 1 January 2024, an entity at or below the no-tax-due threshold is no longer required to file a No Tax Due Report — Form 05-163 was discontinued for those entities. But it must still file a Public Information Report (Form 05-102) or an Ownership Information Report (Form 05-167). Owners hear the first half, file nothing at all, and end up out of compliance.
What you owe, in plain terms
- Annualized total revenue at or below $2,470,000 — no franchise tax due, no No Tax Due Report, but a PIR or OIR is still required every year.
- Above the threshold — franchise tax is calculated and reported, on the EZ Computation Report or the Long Form, alongside the information report.
- New veteran-owned businesses in their first five years — neither the tax report nor the information report.
The annual report is due 15 May. Extensions are available and we file the request where it helps, but an extension of time to file also moves when the tax becomes payable — it is not a way to defer indefinitely.
Why missing it is worse than it sounds
Franchise tax is not just a bill. An entity that does not meet its franchise tax filing obligations can forfeit its right to transact business in Texas, which puts the liability protection you formed the LLC for at risk. Reinstatement is possible, but it is slower and more expensive than the filing you skipped.
What we do
- Determine which report your entity actually owes this year, based on annualized total revenue and entity type.
- Prepare and file the franchise tax report, the PIR or OIR, or both.
- File the extension request where it is useful.
- Catch up prior years where reports were missed — the most common reason people call us about franchise tax.
This runs alongside your federal business return and, where it applies, sales tax, so the whole Texas obligation is handled in one place.
Threshold, due date and report requirements per the Texas Comptroller: No Tax Due Report changes for 2024 and after and the franchise tax reports and payments FAQ. Verified September 2026; confirm current figures before relying on them.
Talk to us about your return
Tell us what you need filed and we will tell you what it involves and what it costs. New inquiries get a response within the week.
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