If your Texas entity’s annualized total revenue is $2.65 million or less for the 2026 report year, you owe zero franchise tax and no longer file the old No Tax Due Report (Form 05-163). You do, however, still have to file an annual information report with the Comptroller to keep your entity in good standing. That is the practical shape of the Texas franchise tax no tax due report obligation today: the tax form went away for entities under the threshold, but the annual filing did not.1Texas Comptroller of Public Accounts. Texas Franchise Tax Report Forms2Texas Comptroller of Public Accounts. No Tax Due Reporting for Report Year 2024 and Later
Who This Applies To
The franchise tax reaches every taxable entity organized in Texas or doing business here: corporations, LLCs, limited partnerships, professional associations, banking corporations, business trusts, and joint-stock companies.3State of Texas. Texas Tax Code 171 – Franchise Tax Out-of-state entities doing business in Texas fall under the same rules and may need to register with the Secretary of State first.4Office of the Texas Secretary of State. Foreign or Out-of-State Entities
A true sole proprietorship, one that doesn’t limit the owner’s liability, is not a taxable entity and has no franchise tax filing at all. A single-member LLC that files a Schedule C for federal purposes is still a taxable entity in Texas, and it must file.5Texas Comptroller of Public Accounts. Taxable Entities – Franchise Tax Frequently Asked Questions Federal treatment doesn’t change Texas treatment.
The 2026 No Tax Due Threshold
For the 2026 report year, the threshold is $2.65 million in annualized total revenue.1Texas Comptroller of Public Accounts. Texas Franchise Tax Report Forms “Annualized” is the word that catches people out. If your entity existed for only part of the accounting period, the Comptroller projects your revenue over a full 12-month period before comparing it to the threshold. A business that earned $1.5 million over six months annualizes to $3 million and does not qualify.
The threshold was $2.47 million for the 2024 and 2025 report years after Senate Bill 3 passed in 2023. That same bill eliminated the requirement for entities under the threshold to file the standalone No Tax Due Report.6LegiScan. Bill Text: TX SB3 – 88th Legislature 2nd Special Session – Enrolled The number adjusts periodically under Tax Code Section 171.006, so verify the current figure on the Comptroller’s site each year.
What You File Instead of Form 05-163
Before the 2024 report year, an entity below the threshold filed Form 05-163 along with either a Public Information Report or an Ownership Information Report. SB 3 removed the Form 05-163 step. Now a qualifying entity simply files the appropriate information report.2Texas Comptroller of Public Accounts. No Tax Due Reporting for Report Year 2024 and Later
Public Information Report (Form 05-102)
Corporations, LLCs, limited partnerships, professional associations, and financial institutions file Form 05-102 every year. It updates officer, director, and manager names and addresses with the Secretary of State’s records and captures your 11-digit Texas Taxpayer Number and your Federal Employer Identification Number.7Texas Comptroller of Public Accounts. Texas Franchise Tax Public Information Report and Ownership Information Report
Ownership Information Report (Form 05-167)
Taxable entities that don’t fit the Form 05-102 categories, such as general partnerships and trusts, file Form 05-167 instead. It captures ownership structure and management details.7Texas Comptroller of Public Accounts. Texas Franchise Tax Public Information Report and Ownership Information Report
How and When to File
The annual report is due May 15. If May 15 falls on a weekend or holiday, the deadline shifts to the next business day.8Texas Comptroller of Public Accounts. Franchise Tax
Filing runs through the Comptroller’s Webfile system at eSystems. Log in, pick the report year, and enter the requested information. No tax due filings have to be submitted electronically; paper hasn’t been an option for these reports since 2016, and submissions must land by 11:59 p.m. Central Time on the due date.9Texas Comptroller of Public Accounts. File and Pay Save the confirmation number Webfile generates. That’s your proof of timely filing.
Need more time? Request an extension using Form 05-164 if you don’t owe tax and aren’t required to pay by electronic funds transfer. The request must be received or postmarked on or before May 15.10Texas Comptroller of Public Accounts. Franchise Tax Extensions of Time to File For entities under the threshold, the extension is straightforward because no payment is attached.
What Happens If You Don’t File
The Comptroller charges a $50 late-filing penalty for each delinquent report, whether or not any tax is owed.11Texas Comptroller of Public Accounts. Penalties for Past Due Taxes That’s the visible cost. The bigger risk is forfeiture.
Under Tax Code Section 171.251, the Comptroller will forfeit an entity’s right to transact business in Texas if it fails to file a required report or pay any tax or penalty within 45 days after a notice of forfeiture is mailed.12State of Texas. Texas Tax Code TAX 171.251 This isn’t limited to corporations; LLCs and other entity types are covered too.
A forfeited entity loses its legal authority to conduct business in Texas. It can’t sue to enforce its contracts, and officers or directors may face personal liability for debts the entity takes on while forfeited. The “we didn’t owe any tax anyway” reasoning is exactly how small businesses end up here.
To come back, you file every delinquent report, pay any taxes, penalties, and interest owed, and request a Tax Clearance Letter from the Comptroller. You can do this electronically through eSystems if you have your Webfile (XT) number and are registered with the Secretary of State.13Texas Comptroller of Public Accounts. Requesting Tax Certificates and Tax Clearance Letters Entities that are part of a combined group, registered as LLPs, or forfeited before January 1, 2000 have to submit Form 05-391 by mail instead.
Confirming Your Standing After You File
Once your report is in, you can check your entity’s standing through the Comptroller’s Franchise Tax Account Status search. It shows whether your entity has an active right to transact business in Texas, and it’s what banks, title companies, and business partners typically use to confirm compliance.14Texas Comptroller of Public Accounts. Franchise Tax Account Status
A formal Certificate of Account Status is a different document. It is legally required only when an entity is terminating its existence with the Secretary of State, not for loans or ordinary financial transactions, despite the common assumption otherwise.13Texas Comptroller of Public Accounts. Requesting Tax Certificates and Tax Clearance Letters For everyday proof that your entity is current, the online account status page is the tool you and anyone checking on you will actually use.