taxes

NO TAX DUE REPORTING FOR REPORT YEAR 2024 AND LATER

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In July 2023, the legislature passed Senate Bill 3, which increased the no tax due threshold and eliminated reporting requirements for certain entities. In response, the Comptroller's office has changed the way some entities have to report for franchise tax purposes.

No Tax Due Threshold Increased to $2.47 Million

For the 2024 and 2025 franchise tax reports, the no tax due threshold is $2.47 million.

Taxpayers Under the No Tax Due Threshold

For the 2024 and 2025 reports, a taxable entity whose annualized total revenue is less than or equal to $2.47 million is not required to file a No Tax Due Report. However, the entity is required to file Form 05-102, Public Information Report (PDF) or Form 05-167, Ownership Information Report (PDF).

A combined group must include all taxable entities in the combined group report even if any member, on a separate entity basis, has annualized total revenue at or below the no tax due threshold. If a combined group’s annualized total revenue is at or below the no tax due threshold, the combined group is no longer required to file a No Tax Due Report, an Affiliate Schedule, or a Common Owner Information Report for that report year. However, each individual member of the combined group that is organized in Texas or has nexus in Texas must file a Public Information Report or Ownership Information Report.

New Veteran-Owned Businesses

For reports originally due on or after Jan. 1, 2024, a qualifying new veteran-owned business is not required to file a No Tax Due Report during its initial five-year period.

The No Tax Due Information Report (Form 05-163) is Discontinued

Because taxable entities whose annualized total revenue is at or below the no tax due threshold and qualifying new veteran-owned businesses are not required to file a No Tax Due Report, we discontinued the No Tax Due Report for the 2024 report year and beyond. The form is not available for any new reporting periods.

There were five types of entities eligible to file a No Tax Due Report. Beginning in 2024, each of these entities report as follows:

Taxable Entities with Annualized Total Revenue At or Below the No Tax Due Threshold

A taxable entity with annualized total revenue at or below the no tax due threshold:

• Does not owe any tax.
• Is not required to file a No Tax Due Report.
• Is required to file a Public Information Report or Ownership Information Report.

Qualifying New Veteran-Owned Businesses

A new veteran-owned business:

• Is not required to file a No Tax Due Report for the initial five-year period that it qualifies as a new veteran-owned business.
• Is not required to file a Public Information Report or Ownership Information Report during this initial five-year period.

Qualifying Passive Entities

A qualifying passive entity:

• Must file either the EZ Computation Report or the Long Form.
• Must blacken the appropriate circle in the taxpayer information section at the top of the form.
• Must sign the report.
• Need not provide information in any other section of the report.
• Need not file a Public Information Report or Ownership Information Report.

Qualifying Real Estate Investment Trusts (REITs)

A qualifying REIT:

• Must file either the EZ Computation Report or the Long Form.
• Must blacken the appropriate circle in the taxpayer information section at the top of the form.
• Must sign the report.
• Need not provide information in any other section of the report.
• Must file a Public Information Report or Ownership Information Report.

Taxable Entities with Zero Texas Gross Receipts

A taxable entity with zero Texas gross receipts must:

• File either the EZ Computation Report or the Long Form.
• Complete specific line items on the form to compute the entity’s total revenue.
• Report zero on the Texas gross receipts line.
• File a Public Information Report or Ownership Information Report.