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Franchise Tax
News and Announcements
Beneficial Owner Information (BOI) Reports Under Federal Corporate Transparency Act
Don’t confuse BOI Reports with Public Information Reports (PIRs) or Ownership Information Reports (OIRs).
Beginning Jan. 1, 2024, the U.S. Department of the Treasury began accepting Beneficial Ownership Information (BOI) reports as required under the Corporate Transparency Act. A BOI report contains information about individuals who own or control companies doing business in the United States. BOI reports should be filed with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) through its online Beneficial Ownership Secure System (BOSS). The reports cannot be filed through the Comptroller’s office or the Texas Secretary of State, and do not serve as a substitute for PIRs or OIRs. For more information on BOI Reports go to the Treasury Department’s website.
Franchise Tax Notices – January 2025
Form 05-211, Texas Notice of Intent to Forfeit Right to Transact Business
If you receive this notice, you failed to meet franchise tax filing and/or payment requirements. Learn how to resolve this issue and ensure your franchise tax account is current. If your entity’s annualized total revenue for the 2024 report year is at or below the no tax due threshold of $2,470,000, you are not required to file a report, but you still must file either a Public Information Report or an Ownership Information Report. See Changes to No Tax Due Reporting for 2024.
High Call Volume
Shorter wait times occur from 8-10 a.m. and 4-5 p.m. CST. Please have your 11-digit taxpayer number ready when you call. For more information, see our Call Tips and Peak Schedule.
What is 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. For general information, see the Franchise Tax Overview.
File and Pay Franchise Tax
- Approved Tax Preparation Software Providers
- Filing and Payment Requirements
- Request an Extension
- Report Common Owner Information
Due Dates
Annual Franchise Tax Reports
The annual franchise tax report is due May 15. If May 15 falls on a weekend or holiday, the due date will be the next business day.
Update an Account
- Tax Notices and Resolving Problems With Your Account
- Making Your Franchise Tax Account Current - 2024 Report Year
- Look Up Account Status
- Change a Business Address or Contact Information
- Close or Reinstate a Business
- Request a Tax Certificate or Tax Clearance Letter
- Complete the Franchise Tax Accountability Questionnaire
Tax Rates, Thresholds and Deduction Limits
Franchise tax rates, thresholds and deduction limits vary by report year. Use the rate that corresponds to the year for which you are filing.
| Item | Amount |
|---|---|
| No Tax Due Threshold | $2,470,000 |
| Tax Rate (retail or wholesale) | 0.375% |
| Tax Rate (other than retail or wholesale) | 0.75% |
| Compensation Deduction Limit | $450,000 |
| EZ Computation Total Revenue Threshold | $20 million |
| EZ Computation Rate | 0.331% |
Tax Rates, Thresholds and Deduction Limits for Prior Years
| Item | Amount |
|---|---|
| No Tax Due Threshold | $1,230,000 |
| Tax Rate (retail or wholesale) | 0.375% |
| Tax Rate (other than retail or wholesale) | 0.75% |
| Compensation Deduction Limit | $400,000 |
| EZ Computation Total Revenue Threshold | $20 million |
| EZ Computation Rate | 0.331% |
| Item | Amount |
|---|---|
| No Tax Due Threshold | $1,180,000 |
| Tax Rate (retail or wholesale) | 0.375% |
| Tax Rate (other than retail or wholesale) | 0.75% |
| Compensation Deduction Limit | $390,000 |
| EZ Computation Total Revenue Threshold | $20 million |
| EZ Computation Rate | 0.331% |
| Item | Amount |
|---|---|
| No Tax Due Threshold | $1,130,000 |
| Tax Rate (retail or wholesale) | 0.375% |
| Tax Rate (other than retail or wholesale) | 0.75% |
| Compensation Deduction Limit | $370,000 |
| EZ Computation Total Revenue Threshold | $20 million |
| EZ Computation Rate | 0.331% |
| Item | Amount |
|---|---|
| No Tax Due Threshold | $1,110,000 |
| Tax Rate (retail or wholesale) | 0.375% |
| Tax Rate (other than retail or wholesale) | 0.75% |
| Compensation Deduction Limit | $360,000 |
| EZ Computation Total Revenue Threshold | $20 million |
| EZ Computation Rate | 0.331% |
| Item | Amount |
|---|---|
| No Tax Due Threshold | $1,080,000 |
| Tax Rate (retail or wholesale) | 0.475% |
| Tax Rate (other than retail or wholesale) | 0.95% |
| Compensation Deduction Limit | $350,000 |
| EZ Computation Total Revenue Threshold | $10 million |
| EZ Computation Rate | 0.575% |
| Item | Amount |
|---|---|
| No Tax Due Threshold | $1,080,000 |
| Tax Rate (retail or wholesale) | 0.4875% |
| Tax Rate (other than retail or wholesale) | 0.975% |
| Compensation Deduction Limit | $350,000 |
| EZ Computation Total Revenue Threshold | $10 million |
| EZ Computation Rate | 0.575% |
| Item | Amount |
|---|---|
| No Tax Due Threshold | $1,030,000 |
| Tax Rate (retail or wholesale) | 0.5% |
| Tax Rate (other than retail or wholesale) | 1.0% |
| Compensation Deduction Limit | $330,000 |
| EZ Computation Total Revenue Threshold | $10 million |
| EZ Computation Rate | 0.575% |
| Item | Amount |
|---|---|
| No Tax Due Threshold | $1,000,000 |
| Tax Rate (retail or wholesale) | 0.5% |
| Tax Rate (other than retail or wholesale) | 1.0% |
| Compensation Deduction Limit | $320,000 |
| EZ Computation Total Revenue Threshold | $10 million |
| EZ Computation Rate | 0.575% |
| Item | Amount |
|---|---|
| No Tax Due Threshold | $300,000 |
| Tax Rate (retail or wholesale) | 0.5% |
| Tax Rate (other than retail or wholesale) | 1.0% |
| Compensation Deduction Limit | $300,000 |
| EZ Computation Total Revenue Threshold | $10 million |
| EZ Computation Rate | 0.575% |
Final Franchise Tax Reports
Before getting a Certificate of Account Status to terminate, convert, merge or withdraw registration with the Texas Secretary of State:
- A Texas entity, terminating, converting or merging, must file its final tax report and pay any amount due in the year it plans to terminate, convert or merge.
- An out-of-state entity, ending its nexus in Texas, must file its final report and pay any amount due within 60 days of ceasing to have nexus.
Penalties and Interest
Penalties
- A $50 penalty is assessed on each report filed after the due date.
- If tax is paid 1-30 days after the due date, a 5 percent penalty is assessed.
- If tax is paid over 30 days after the due date, a 10 percent penalty is assessed.
Interest
- Past due taxes are charged interest beginning 61 days after the due date.
- To calculate interest on past due taxes, visit Interest Owed and Earned.