Texas Franchise Tax

Q: When do I file the Texas franchise tax report?

The usual annual due date is May 15 , with adjustments for weekends and holidays. Always check the current Comptroller instructions and any applicable extension rules.

Understand what your Texas business may owe, what you need to file, and how to plan ahead.

For the 2026 and 2027 Texas franchise tax report years.

If you own a Texas LLC or corporation, you may have received a franchise tax notice or wondered whether your business needs to pay this tax. You do not need to know accounting terminology to get started. Here are the basics, what you may need to file, and how accurate bookkeeping can make tax season easier.

At Weidner CPA, we help business owners in San Antonio and throughout Texas with business tax preparation, year-round tax planning, and CPA-led monthly accounting. We believe you should understand the numbers behind your tax decisions.

The short answer: Will my Texas business owe franchise tax?

For the 2026 and 2027 Texas franchise tax report years, a business with $2,650,000 or less in annualized total revenue generally does not owe Texas franchise tax or need to file the franchise tax report. However, many LLCs and corporations still need to file a business information report even when the tax amount is $0.

What does annualized total revenue mean?

Think of it as the business's Texas-defined revenue for 12 months. If your report covers less than a year, Texas generally converts the amount to a full-year equivalent for this test.

The figure may not match your deposits, gross sales, or the revenue printed on your income statement.

Three things to remember:

$2.65 million: the no-tax-due annualized revenue threshold for the 2026 and 2027 report years.
May 15: the usual annual filing deadline, adjusted when necessary for weekends or holidays.
$0 tax does not always mean no paperwork: an annual information report may still be required.

Official source: Texas Comptroller — franchise tax rates and thresholds.

What is Texas franchise tax?

Texas franchise tax is a state tax that generally applies to certain businesses formed in Texas or doing business here. It is different from the federal income tax on your business's profit, and it is also different from Texas sales tax.

Texas looks at an amount called taxable margin, not simply the net profit at the bottom of your profit-and-loss report. Texas has special definitions of revenue and expenses that can affect the final calculation.

Does my LLC have to deal with franchise tax?

Many Texas LLCs must check the franchise tax filing rules, including one-owner LLCs that report income on the owner's federal tax return. Choosing S corporation tax treatment does not automatically remove Texas franchise tax obligations. Certain entity types and businesses qualify for exemptions or special treatment.

If my tax is $0, what might I still need to file?

This is one of the most important details for Texas business owners.

A business may have no franchise tax payment due but still need to submit one of these annual forms:

Public Information Report (PIR): commonly required for LLCs and corporations. This form reports certain business information, such as management details.
Ownership Information Report (OIR): required for certain other types of entities.

If your revenue is at or below the threshold, you generally do not file the old No Tax Due Report. Texas discontinued that report beginning with the 2024 report year. The PIR or OIR may still be due, depending on the entity and any exception.

If your revenue is above the threshold, you may need to file a franchise tax report even when your calculated tax is less than $1,000, and no payment is required. There are special rules for certain entities and related-company groups.

Official source: Texas Comptroller — reporting and payment requirements.

Why does monthly accounting matter for franchise tax?

Here are practical examples of what this looks like:

A contractor: correctly tracking job costs may help a CPA evaluate whether some costs qualify under Texas franchise tax rules.
A retailer: organized purchases and inventory records can help support a review of potentially eligible product costs.
A service business: consistent payroll and owner-pay records make it easier to review compensation rules.
A growing business: monthly revenue reports can show when the company is getting close to the no-tax-due threshold.
A business selling outside Texas: reliable sales records support a review of which sales count as Texas receipts.

This is why tax planning and monthly accounting work better together. Weidner CPA provides monthly bookkeeping oversight, account reconciliations, CPA review, and tax preparation and planning services based on your engagement. We connect the books to the business and tax decisions you need to make.

See our monthly accounting services, tax planning services, and pricing.

Common Texas Franchise Tax Questions

I have a one-person LLC. Do I still need to file?

Often, yes. Even if you do not owe franchise tax, your LLC may still need an annual Public Information Report. Check the entity's status and applicable exceptions.

Is the $2.65 million based on profit or sales?

Neither word is quite right. The state uses its own definition of total revenue, before applying the franchise tax calculation. The amount is generally closer to business revenue than profit, but it is not necessarily equal to your bank deposits or gross sales.

Does an S-corporation pay Texas franchise tax?

An S corporation election for federal tax purposes does not automatically exempt an LLC or corporation from Texas franchise tax. The legal entity, Texas revenue, and specific rules still matter.

What happens if my business makes more than $2.65 million but my tax calculates to less than $1,000?

A taxable entity above the revenue threshold generally still files an EZ or long-form franchise tax report, plus the applicable information report, even if the calculated tax is less than $1,000 and no payment is due.

When do I file the Texas franchise tax report?

The usual annual due date is May 15, with adjustments for weekends and holidays. Always check the current Comptroller instructions and any applicable extension rules.

Can Weidner CPA handle the franchise tax filing and my monthly accounting?

Yes. We help Texas businesses coordinate tax preparation, tax planning, and CPA-led monthly accounting under an agreed scope of services. You work with a local CPA team, and we do not outsource your accounting work.

Educational information and estimates. The calculator does not prepare or file a return. Entity exceptions, combined reporting, annualization, revenue exclusions, and Texas receipts sourcing can change your result. Review your business facts before filing.