A Texas Certificate of Account Status is an official document from the Texas Comptroller of Public Accounts confirming that a business entity has met its franchise tax obligations, and you’ll need one before the Secretary of State will accept a filing to terminate, withdraw, merge, or convert your entity. You request it using Comptroller Form 05-359 or through the Comptroller’s Webfile portal, and the Comptroller will only issue it if every franchise tax report has been filed and every balance paid.1Texas Comptroller of Public Accounts. Requesting Tax Certificates and Tax Clearance Letters
When You Need a Certificate
Terminating or Withdrawing an Entity
Any registered entity that wants to formally end its existence in Texas must include a Certificate of Account Status with its certificate of termination filed at the Secretary of State’s office. The Texas Business Organizations Code requires this as proof that all state taxes have been paid before the state will let a business close.1Texas Comptroller of Public Accounts. Requesting Tax Certificates and Tax Clearance Letters Out-of-state entities withdrawing their Texas registration face the same requirement.
Mergers and Conversions
When businesses merge or convert from one entity type to another, the filing instrument submitted to the Secretary of State must either include a Certificate of Account Status from the Comptroller or state that the surviving or converted entity will be liable for the required franchise taxes.2Texas Secretary of State. Mergers and Conversions FAQs That second option is available when time is tight, but submitting the certificate avoids complications later.
Lender and Buyer Due Diligence
Lenders and buyers frequently request a Certificate of Account Status during loan applications or business acquisitions. It signals that the business isn’t carrying hidden state tax liabilities. No statute mandates the certificate in these situations, but a business that can’t produce one raises obvious questions about its compliance history.
Reinstatement Is a Different Document
If your business had its charter forfeited for unpaid franchise taxes and you’re trying to reinstate it, you don’t want a Certificate of Account Status. You want a Tax Clearance Letter, requested on Comptroller Form 05-391, and the letter must be valid through the date of filing with the Secretary of State. Nonprofit corporations are the one exception and don’t need tax clearance for reinstatement.3Office of the Texas Secretary of State. Form 811 – Instructions for Certificate of Reinstatement
Clear Your Account Before You Apply
The Comptroller will not issue a certificate if any franchise tax reports are missing or any balance remains on the account. Before requesting the document, confirm that every annual report is filed and every dollar paid, including penalties and interest.
Penalties stack quickly. A $50 penalty applies to every report filed after its due date, regardless of whether any tax was owed for that period. Late tax payments carry a 5% penalty if paid within the first 30 days, 10% after 30 days, and up to 20% after a formal notice of tax due.4Texas Comptroller of Public Accounts. Penalties and Interest Interest begins accruing on the 61st day after the report due date. For 2026, the rate is 7.75%, calculated as the prime rate plus one percent.5Texas Comptroller of Public Accounts. Interest Owed and Earned
One trap catches small businesses often. Entities with total revenue at or below $2,650,000 owe no franchise tax, but they still must file their reports.6Texas Comptroller of Public Accounts. Franchise Tax Rates, Thresholds and Deduction Limits Owners who assume they have nothing to file end up with a string of delinquent reports blocking their certificate request.
How to Request the Certificate Online
The fastest route is the Comptroller’s Webfile portal. Logging in requires your Webfile number, a two-letter, six-number code printed on franchise tax reports mailed by the Comptroller. If you’ve lost it, the Comptroller’s automated phone system at (800) 442-3453 can provide it once you verify confidential information from a previously filed report.7Texas Comptroller of Public Accounts. Create a Webfile Account Step-by-Step
You also need two identification numbers: the 11-digit Texas Taxpayer Number assigned by the Comptroller, and the Secretary of State file number from your original formation documents.8Texas Comptroller of Public Accounts. Identify Taxpayer – Qualified Research Exemption If you don’t have the SOS file number, you can look it up through the Secretary of State’s online entity search.
Once logged in, navigate to your franchise tax account and follow the prompts to submit the request. If the account is in good standing, the system generates the certificate immediately as a printable digital file.1Texas Comptroller of Public Accounts. Requesting Tax Certificates and Tax Clearance Letters
How to Request by Mail
For a paper request, download Form 05-359 from the Comptroller’s website and mail the completed form to:
Comptroller of Public Accounts
P.O. Box 149348
Austin, TX 78714-93489Texas Comptroller of Public Accounts. Form 05-359 – Request for Certificate of Account Status to Terminate a Taxable Entity’s Existence in Texas
The Comptroller processes requests in the order received regardless of format, so mailed applications take significantly longer than online requests. Plan ahead if you’re working toward a filing deadline at the Secretary of State.
Validity Dates and Filing Timing
Every certificate carries a “valid through” date, and the Secretary of State will reject any filing accompanied by an expired certificate. The certificate must be valid through the effective date of your filing, not just the date you submit it. A certificate valid through May 15 won’t work for a termination filed on May 16, and one valid through December 15 won’t cover a filing with a delayed effective date of December 31.10Texas Secretary of State. Terminations and Reinstatements FAQs
If your certificate expires before the Secretary of State processes your filing, you’ll need to go back to the Comptroller and request a new one. Building in a buffer of several weeks between obtaining the certificate and submitting the filing helps avoid that loop.
Quick Status Checks Without a Formal Certificate
You can check any entity’s franchise tax account status at any time through the Comptroller’s online search tool without filing a request. The results reflect the Comptroller’s records at the time of the query and can be printed, which is useful for quick due-diligence checks during business transactions.11Texas Comptroller of Public Accounts. Franchise Tax Account Status The printout is not a substitute for the official certificate the Secretary of State requires for formal filings.