What is The Franchise Tax?

The Texas franchise tax is a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas. All LLCs and Nonprofits that were formed in 2022 or earlier are required to file a Franchise Tax report. 

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• Corporations

• Limited liability companies (LLCs) including series LLCs

• State limited banking associations

• Savings and loan associations

• S corporations

• Professional corporations

• Partnerships (limited and limited liability)

• Trusts

• Professional associations

• Business associations

 

Annual Franchise Tax Reports

The annual franchise tax report is due May 15th, 2023. If May 15th falls on a weekend or holiday, the due date will be the next business day. 

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What are the penalty fees for a delinquent Texas Franchise Tax Report?

The TX Comptroller charges a $50 penalty when a report is filed late, plus a 5% penalty on the tax due. If you still have not filed within 30 days after the due date, an additional 5% penalty is added.

 

No Tax Due Report

The majority of LLCs in Texas fall under the no tax due threshold, which is currently $1,230,000 in annualized total revenue. Therefore, the type of Franchise Tax Report they file is the No Tax Due Report by May 15th, 2023. 

 

If you qualify for the no tax due threshold, it is very important that you complete the No Tax Due Report. Failing to do so will result in penalties).

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Franchise Tax Filing Extensions

The Comptroller’s office will grant an extension of time to file a franchise tax report upon receipt of a timely request. Timely means submitted or postmarked on or before the due date of the original report.

 

**This information is intended as a general guide and not as a comprehensive resource on the subjects covered. It is not a substitute for legal advice. Please contact or visit the Texas Comptroller’s website for more information.

 

Quick links to the Texas Comptroller’s Office

https://comptroller.texas.gov/taxes/franchise/

 

Prior to completing your Franchise Tax Report, you will need to create a Webfile account on the Texas Comptroller’s Website. 

https://security.app.cpa.state.tx.us/

 

For questions regarding Franchise Tax Filing contact the Texas Comptroller’s office and be sure to have your 11-digit taxpayer number ready when you call. 

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Texas Comptroller’s Office Franchise Tax Division: 1-800 -252-1381

 

Watch these Videos to Create a Webfile Account & File the Franchise Tax Report

 

Do you need help creating your Webfile Account OR filing your Franchise Tax (No Tax Due Report)?

 

These 2 videos will guide you. 

 

Step 1: How to Create a Webfile Account, Electronically File and Pay Franchise Taxes [Official] - YouTube

 

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Step 2: How to File a No Tax Due Information Report - YouTube

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