What is Texas Franchise Tax?
The Texas Franchise Tax is a state tax imposed on each taxable entity formed or doing business in Texas. It’s essentially a fee for the privilege of conducting business within the state. Please visit Franchise Tax Overview for more information, including how the tax is calculated.
Who has to file?
According to the Texas Comptroller, each taxable entity formed in Texas or doing business in Texas must file and pay a franchise tax. This includes:
- S corporations
- LLCs (including single member LLCs)
If you are a sole proprietor(except for single member LLC) and have not registered your business with the secretary of state, you do not need to pay franchise tax.
Exemptions
For reports originally due on or after Jan. 1, 2024, a taxable entity whose annualized total revenue is less than or equal to $2.47 million is no longer required to file a No Tax Due Report. However, the entity is still required to file Form 05-102, Public Information Report (PDF) or Form 05-167, Ownership Information Report (PDF).
When is it due?
Franchise tax reports are due on May 15 each year. If May 15 falls on a Saturday, Sunday, or legal holiday, the next business day becomes the due date.
You may request an extension by filing the appropriate form by the due date. See Franchise Tax Extensions of Time to File for more information. There is a $50 penalty for a franchise tax report filed after the due date, even if no tax is due with that report and even if the taxpayer subsequently files the report.
How to submit payment
To file, go to https://security.app.cpa.state.tx.us/
Please note: The NAICS code for Offices of Mental Health Practitioners (except Physicians) is 621330.
Does Heard file Franchise Taxes?
No, while Heard supports your filing of business and personal income tax, we do not support filing Franchise Tax or Excise Tax reports. See: What are Franchise and Excise Taxes?